Need grants? Collaborate and conquer!

Is your charity solving problems or just spending money? Many funders are asking that question, and sometimes just that bluntly.

The question of whether there are too many ineffective nonprofits competing for too few non-government dollars has been an ongoing discussion for quite some time. The advent of the 1023EZ is onceagain creating interest not just in answering that question, but solving the problem.

There are two polarizing reasons why nonprofit funding woes continue to proliferate. One,  nonprofit founders feel that they are serving a need not otherwise addressed in their local area, and two, funders have hit the wall in terms of how many small organizations they can fund while still achieving their own missions.

One bone, many dogs

Obviously, some nonprofits are all chasing the same dollars for the same causes.

One of the first things I do when a prospective nonprofit founder contacts me for help starting a new venture is to see how many other groups are tackling the same problem in a relatively tight (say within a fifty mile radius) geographic area.  I also check to see how many national groups have chapters or members in that area.

You know what?  Grantors do exactly the same thing and woe be onto you if you are just one face in a crowd.  

One very popular type of charitable focus, and a crowded one,  is on alleviating hunger. Quite frankly, one or two national groups pretty much have that arena sewed up tight, speaking strictly from a funding standpoint. You can become one of their network members, but striking out totally on your own may not result in success.

Sure, your new food pantry might be the only one in its area, but where is the money going to come from to sustain it? Taking in a few thousand dollars a year might have a positive local outcome, but is it sustainably resulting in fewer hungry people?

Generally, when nonprofits think about mergers they think of other similar agencies. For instance a soup kitchen might collaborate with a larger food pantry or food bank.

That could be the wrong approach.

A new look at an old problem

What about partnering with organizations that remove the root cause of hunger, which is generally considered to be poverty?

Consider forming a sort of local or regional alliance that addresses all the causative factors that result in hunger.

A local food bank could seek out another local group that provides help in getting GED's. Those two could enlist the aid of a group that provides specific technical training or scholarships. Those three could work with a local economic development group seeking to bring in more jobs to the area. Those four could work with a group providing childcare for working parents.

Each of those groups has their own particular expertise, but together, they could actually offer grantors the chance to end the need for supplemental feeding programs.

That's the kind of impact that impresses grantors.

By forming a regional or even local community improvement collaboration, each agency could pool their manpower, marketing and yes, their dollars to create complete outcomes.

Make no mistake, this type of organization is no picnic to form, and even less easy to manage. This definitely a time when you want expert legal and financial advice.

Too many egos, too many pet projects and too little money dooms more than a few collaborations. If one organization gets money from a major donor restricted to say, just purchasing food, and another gets nothing for  school supplies, all hell breaks loose.

I have intimate knowledge of how that works, having written a successful five-year grant for several million dollars, only to have the partners start fighting over the funds when they were awarded. Within less than a year, the cornerstone charity backed out, leaving four smaller agencies incapable of meeting the renewal terms of the grant in the second year. In the end, no one got the rest of the money, and no one benefited.

This "collaboration" was strictly a gentleman's agreement, and when issues arose there was no contract or formal agreement to prevent the largest participant nonprofit from bolting.

Funders currently hold all the aces

If nonprofits don't find better ways to fix problems, funders will do it for them. The reason the big-money, high-profile charities get all the money is because they are perceived as being more effective.

As I look for funding for smaller organizations, I'm seeing more and more foundations closing their public application processes. Others are starting to set minimum revenue qualifiers in the hundreds of thousands and even millions of dollars for consideration of proposals.

Still, some funders do recognize that size isn't necessarily an indicator of effectiveness, and they are looking for innovative proposals.

A relatively small collaborative venture might well be more effective than a huge national organization that is strangled by its own size. Many large nonprofits have been plagued by scandal that resulted primarily because the national organization was far too insulated from accountability by its sheer size.

Nevertheless,  faced with the inevitable reality that there just isn't enough money to go around, funders are attacking the problem by prioritizing in favor of larger or at least potentially more effective organizations.

Community collaborations could be the answer to being shut out all together. 

What impact statements say about your nonprofit

What do the people you help think of your nonprofit?  How about your partners?

That's a question I ask when I am working on impact reports. You'd be astounded at how many people can't provide the answer.

Impact statements are an important part of getting grants at any level. 

If you operate a nonprofit, you obviously get something concrete out of it. Whether it's emotional satisfaction or a feeling of being part of a larger cause, there has to be something in it besides a monetary return.

The problem is, no grant maker wants to know what good you derive from your organization.

To some extent most impact statements are about statistics, but numbers don't tell the whole story.

Take the case of a nutrition-focused nonprofit. Their mission was to provide not just more food, but better food to the low-income population in their area. To that end, they held what you might call healthy eating food drives, gave cooking classes and were looking for support to purchase more healthy foods like raw vegetables and fruit.

They had all the numerical data documenting how many meals they had provided, nutrition tables and comparisons of calorie substitutes. They were very proud that they "introduced people to foods they might not have considered previously." They were also trying to start urban gardens.

What I noticed was that they didn't seem to be serving near as many people as the statistics would indicate that they should. Some months, they actually threw away food that had aged past it's safe shelf life.

When I asked the opening questions above they had no answers, because they had never asked them of their clients.

After a lot of prodding, they agreed to collect some data, and the results shocked them.

People didn't like their approach. It was described variously as preachy, stuck up, and out of touch with the community members they wanted to help.

For instance, one respondent shared that she couldn't keep a lot of fresh food on hand, because her refrigerator was 40 years old and had a very tiny freezer. She used a lot of boxed and canned foods, because that's what she could store.

Another said that her "stove" was a hot plate, so she couldn't fix anything that needed an oven.

Still another lady wrote back and said "My kids aren't going to eat brussel sprouts or alfalfa shoots, so why should I waste the gas to go get them?"

And one that typified why their mission wasn't working in the community…"I work two jobs now. When would I have time to do all that canning, and why would I when I can buy the same thing in a can at the store?"

No matter how noble your cause, or how great it makes you feel, if you can't prove to grantors that it benefits others, they aren't going to support you.

Ask for honest feedback. Your impact statement will benefit, and so will your clients or beneficiaries.

The R.E.A.L. Formula for attracting grantors

There are approximately 1.5 million nonprofits vying for funding from approximate 100,000 foundations every year.  Standing out in that crowd requires a strong survival strategy.

There are a few core criteria that every funding source adheres to when sifting through grant applications. Those criteria can be summed up in the R.E.A.L. formula, as follows:

• Relevancy.  Does your organization's application match up well with the donor's mission, vision and geographic limitations?
• Efficacy – If the funder gives you money, will their mission get the most bang for the buck from your organization, or will it just enable you to keep the lights on a little longer?  Various sources have reported that between 30 and 60 thousand nonprofits disappear from the IRS database each year, prompting grantors to confine their support to those organizations that can deliver benefits well into the future.
• Accountability – Does your organization have a strong track record of transparency relative to your previous operations, outcomes  and funding partnerships? Can you provide concrete examples to prove your successes and verify your financial data?
• Legitimacy – are you a legally recognized nonprofit with good references and strong outcomes?

Increasingly, as detailed in an article by Rick Cohen in the Nonprofit Quarterly, foundations are simply refusing to accept unsolicited applications. While some of that reluctance is due to recent economic factors, it is also due to simply receiving too many applications from organizations that obviously can't accomplish their mission.

Other foundations are adding restrictions to application requirements, such as not funding startups, or those whose current revenues are under a preset amount. Most have always required that you provide copies of the long form 990, indicating that your revenues are above six figures.

All prospective grantors use some sort of rubric, either written or implied, to separate the wheat from the chaff. Failing to deliver on funder expectations in any of the above areas can and probably will kill your application.

Some  shortcomings I see often are a lack of data and an unprofessional public persona.

For instance, let's look at legitimacy. The first thing I do when approached by a new nonprofit client seeking grants is to look for them online. I'm looking for a website that actually tells me something about the organization and its key personnel and programs. I want to see some sort of evidence of positive outcomes. There should be a link to the financials and  a copy of their determination letter, or at least the ability to request them.

I am also going to check all the databases for verification of their nonprofit status, including the IRS website, if necessary. While I also check out social media, the most important thing for me is to see if they present well on first impression, since I know that any funding source will be doing the same.

Grantors that ask for a website URL are going to click on the link. Even if they don't ask, they may well include your online presence as a scoring metric.

Master the R.E.A.L. formula and your funding success rate is going to go up dramatically.

Don't know if you will fit the formula?  Drop me a line at rightwords@ida.net for a review.   

Does your grant proposal have a bad "I"?

When you are presenting your charity to a prospective supporter, particularly if that first contact is an online application, establishing the credibility and effectiveness of the organization is vital.

When reviewing grant proposals for clients, many of them are written in the first person. "I started XYZ Charities"  "I contacted so-and-so", I did this  and I did that. Almost as bad is a constant string of third-person references to the founder.

There is always one person behind the formation of a charity.  Someone has to get the ball rolling, and that founder is very important.  If the charity achieves longevity, it will always be tied to its founder.  The Red Cross will always owe its existence to Clara Barton as the founder.  Any history of a charity will include a nod to its founder, but there does come a time when that same founder has to be part of a team.

Grantors are interested in supporting an organization because it effectively advances its mission, and that requires the efforts of more than one person.

If your grant application reads more like a political campaign speech than a mission narrative, it might give grantors the idea that the charity can't survive without you, or worse, that there are no other active team members.

When the grant asks for a history of your organization, it's fine to say it was founded by so-and-so, and if that person is still active, a brief biographical sketch of that persons contributions and qualifications. The transition to a team philosophy should be introduced as soon as possible after that initial introduction.

 

Try something like this.  XYZ Charities was founded in 2005 by Mary Doe, and now operates with a team that includes Joe Doe, Nancy Roe and Frank Moe, adding the titles and qualifications after each name. That tells grantors immediately that you are no longer a one-man show.  If you should get hit by a bus, the charity can continue to function, and the money the grantor is investing will not be lost or wasted.

The old cliché "You only get one chance to make a first impression" applies in spades here.  Be sure that impression is about your organization, and not just you.