Do you use sales funnels in your fundraising?

I asked a prospective nonprofit client that question.  She replied "what's that?"

In its simplest traditional business sense a sales funnel is a parameter for identifying the customer or target market that is most likely to be interested in what you are selling.

The value of using it is that it produces more sales for less initial investment in marketing.

Here's an example of what happens when you waste time and money on a campaign that doesn't adequately define a market.

Bill, a very well-to-do businessman, was approached by a nonprofit as a part of their major donor development after he was mentioned in an article as being interested in helping to provide food for needy people in his town.

The nonprofit's mission was to send food to starving people in Africa.

He responded politely to the letter by indicating that he had no interest whatsoever in feeding people in Africa while children, the disabled and the elderly in the United States are going hungry every night.

That should have been the end of it. They tried, he refused, end of story.

Instead he began to get letters and even phone calls asking for his support. After a year or so of that, he hopped on his jet, went to their headquarters and deposited a stack of mail and phone messages on the receptionists desk, with a not-so-polite note to take him off their mailing and call lists or face the consequences.

The problem was that the nonprofit qualified him simply because he was, well, rich and had an interest in feeding the needy.

All that did was to cost them a lot of money and time and made an enemy out of him.

The sales funnel, i.e. their parameters for qualifying major donors for further development was both overly broad and poorly maintained.

It doesn't matter if you are selling cars or a mission proposal…it behooves you to target your efforts to people who are likely to buy what you are selling.

In general, if you are sending out general appeals, monitoring your response ratio for both quality AND quantity and distilling your mailing list or media campaigns down to the essentials will serve you far better than just buying a mailing list. It also helps if your staff takes the time to really read any personal responses they get.

Cross referencing the donations against your contact or mailing lists can save you a lot of money and time, not to mention improving your response ratio from the customary 1 to 3% up to 20% or more.

Grants that are meant to produce tangible outcomes

Those who follow me, both here and on my other blog know that I am a supporter of a diversified educational strategy.  STEM is great, but someone has to build and run the machinery and use the stuff engineers dream up!

It won't do a lot of good to get more manufacturing and assembly jobs back into this country if  we don't have anyone trained to do them. Not to mention the fact that working with your hands as well as your brain is good for the economy, good for your personal financial situation, and may give workers a reason to pursue other education to progress up the career ladder.

Today's manufacturing jobs are not those of the mid-20th century, and often blend in well with more formal STEM educational goals.

Personally, I find that payng for a kid to go to college to "find themselves and their life work" is both fiscally and socially irresponsible, particularly given the dismal report of the emotional readiness of students to enter college.

If I had my way, every person would have to work for two years before they even considered college.

That's just me, but hey...I'm entitled to my opinion too.

To that end, I highlight grant opportunities that fall into that arena, and here is one that fits. To give credit where is is due, this came to my attention through Grant Gopher, and the lead paragraph reads like this:

"Nuts, Bolts & Thingamajigs awards grants annually to trade schools and community or technical colleges capable of hosting a summer camp program for girls and/or boys ages 12-16. Summer camps have been a successful way of introducing middle- and high-school students to the fascinating, high-tech career choices available to them in today's automated manufacturing industry."

The website is http://www.nutsandboltsfoundation.org.  It doesn't offer tons of money, but it could be a good fit for their target partner demographic. The closing date is November 15, 2015. You can visit their grants page at: http://www.nutsandboltsfoundation.org/camps/grants/

Is your grants dept.ready for the election?

OK.   I can hear it now.

OMG!  Enough about the cotton-picking election already!

Seriously though, if your nonprofit depends on government grants, and even if it doesn't, now might be the time to put some "what-if" scenarios in place.

In case you are new to the world of grants, an awful lot of the funding tends to follow what's hot politically and tails off when it comes to what's not.

For instance, if the Democrats retain the White House, you can expect that all of the current funding for STEM, social justice issues and the like will continue and even accelerate.

Conversely, if the Republicans win, their pet projects will receive the bulk of the funding.

If you're saying "Well, we get all of our money through private funding" you still need to look ahead.

While it's unlikely that Dems would immediately get a 90% income tax rate in place, there is little doubt that the wealthiest Americans are going to take a hit in the pocketbook.

Who funds private foundations? The wealthiest Americans.

Of course all the politicians would love to have us believe that all of the "new" revenue streams they are cultivating will be immediately returned to the people in the form of better jobs, or free college, or a host of other voter-friendly  programs.

The truth is, it just never works out that way.

For one thing, there's that little thing called the national debt, currently headed north of 18 Trillion dollars.

 

It's a funny thing, but when people (or governments) lend money they usually expect to be paid back.

Interest payments on that money are forecast to eat up ONE TRILLION dollars in just five more years.

That's up nearly 5 times from $220 Billion reported for  2012. If we do in fact add all of the free stuff envisioned by the Democrats, the debt amount could double again in just ten years.

Not paying that amount isn't an option. Given that many of the current and proposed entitlement programs are forecast to grow exponentially simply due to having more users, it stands to reason that discretionary spending will suffer at every level.

No matter which party wins out in 2016, the funding landscape is sure to change in the next decade.

The nonprofits and small businesses that weather the storm will be the ones that plan for it now.

If you are just thinking of starting a nonprofit, it might behoove you to either wait a year or so, or at least run two opposing SWOT analyses before jumping in with both feet.

If you are an existing organization, you may want to factor in significantly higher costs and lower revenue projections when evaluating old programs and before launching new ones.

Another trend may be that local governments will be looking for revenue of their own to replace any missing Federal dollars.  That could lead to the repeal of many of the traditional nonprofit perks, including tax breaks for property used for charitable purposes.

In spite of the handwriting on the wall, many nonprofits will choose to wait to plan until it is too late.

 

Don't let your organization be one of those wringing your hands and holding "going out of business" sales.   

Don't be guilt-tripped into changing your mission.

In an article posted to their website today, Philanthropy News Digest passes on the information that a report has found that family foundations lag behind in social justice funding.

Reports like this abound in every sector. In general they tend to reflect the bias or mission of the agency or organization that commissioned and compiled the report.

Most people and organizations know that and just will shrug this off and move on, but inevitably some will react by deciding that they are somehow in the wrong.

A few years ago, a client was profiled in a newsletter as being "unsympathetic" to minorities because they chose to focus on developing job skills and teaching low-income folks the value of having marketable workplace skills. The gist of the original article was that their programs didn't reflect  the national ratios regarding racial distribution.

Their programs were not defined by race or gender. The only qualifier to participate in the training was to be un- or under-employed and have an annual income below the poverty level.

Unfortunately for the NPO, the majority of the people that responded were white females. Not too surprising, since females are normally the caregivers in single parent homes and the minority population in their area was low, but it gave the group that published the newsletter ammunition for the presses.

After several weeks of heated social media back-and-forth, the board of the targeted NPO  met and decided to develop a minority-only program within the main program. They reasoned that would not only get the critics off their back, but open up new and perhaps better sources of funding.

It didn't work out very well.

First, they had trouble attracting minority participants. Since that had been a problem from the start, a disproportionate amount of time was spent to reach out to that segment of the population, and the main program outreach suffered accordingly.

Second, when they had to provide racial breakdown information for their program participants and graduates, i.e. their outcome results, they remained weighted toward white females. Hardly surprising, since the total minority population, i.e. all other races, of their service area was under 27%.

After struggling with the problem for three years and watching their funding fall by 35%, the board voted to resume operations as they had been prior to the bad press

The moral to this tale?  Do what you do and do it well. You can't please all of the people all of the time.

Political winds change constantly. If your programs are sound, needed and most of all effective, the money will be there.

Reading grant announcements

A nice lady called and wanted to know if I could write up an application for $500K for her small, one year old organization. Here is the entire announcement as it was forwarded to me:

Blackstone Charitable Foundation

Website:    www.blackstone.com

Program(s):  Employment, Economic Development, Job Related and Business Grants

State(s):  National

Maximum Grant Amount: $5,000,000 Total Funding Available

Deadline:  October 12, 2015

The Blackstone Charitable Foundation is accepting applications for the 2016 Blackstone Innovation Grants program, an annual program that awards a series of targeted grants to innovative organizations focused on entrepreneurship and job growth. Now in the fourth year of the program, the Foundation will award up to $5 million in grants to organizations that are tackling the big challenges facing entrepreneurs and entrepreneurial ecosystems.

Eligible organizations and programs may apply for one of two funding tracks:

BIG Program/Project Grants - Organizations with an existing track record of success may apply for funding for a specific program/project (new or existing) that addresses a major systemic challenge facing an entrepreneurial ecosystem and has the potential to be scaled and replicated.

BIG Event Grants - Established organizations may apply for funding for a specific event or convening that accelerates the conversation around entrepreneurship on a regional, national and/or global scale.

Organizations will be evaluated and selected by a committee and subsequently approved by the Board of the Blackstone Charitable Foundation.

To be eligible to apply, organizations must be at least three years old and have an annual operating budget greater than $1,000,000. (Italics are mine).

__________________________________________________________

Obviously, the lady's brand-new organization doesn't qualify. Now don't get me wrong. There is nothing wrong with shooting for the stars. But hiring someone to write a grant you can't possibly qualify for is just plain bad business.

Moral:  read the whole grant announcement.  The lady got as far as the first 2-3 paragraphs and quit reading at "(new or existing)".  The good news is, I have been able to find her a grantor that does match her organization well, although the amount is certainly not as large as she wanted.

Big grants normally require substantial organizational strength. That's normally why I don't write Federal grants or large foundation grants for new organizations.

Yes, it would be nice if these grant announcements would lead with the eligibility guidelines first. Federal grants are historically notoriously bad for being ambiguous or at least indefinite about what level of nonprofit they are written to attract.  Just saying you have to be a 501(c)(3) to apply  leads to a lot of wasted time, money and ink.

Still, if you read the whole announcement, at some point you can probably get a clue that your organization can't complete the requirements.

The good news is, there are almost always grantors out there that will match up well with your level of development.

In fact, one largely overlooked area is in development grants. For some reason, people just aren't  looking for grants specifically designed to improve their overall organizational capability or provide board or staff training.

It's true that only about one in ten grant applications are funded. You can improve your chances by making sure that your organization and the grantor match up well and that includes reading the entire announcement. 

If you have a question about applying for a grant, feel free to contact me at rightwords@ida.net.

Are donors and nonprofits contributing to income inequality?

A  lot has been said recently about the shrinking middle class, the stagnation or even decline in middle class wages, and the job nonparticipation rate.

Meanwhile, businesses are complaining that the skills they really need are being ignored or even denigrated by both politicians and educators.

Case in point. During one area development group's public meeting they asked existing and prospective business owners what they needed to consider relocating or expanding their businesses to the area.

They responded with answers that largely followed this vein.

                                               

They need people that are willing, able  and trained to do hands-on "blue-collar" tasks. They need mechanics, welders, manufacturing assembly line workers, and even freight handlers. As one business owner commented "It doesn't do any good to design a better mousetrap if there is no one to build, box and deliver it."

Salary.com reports that an entry-level welder with 0-2 years experience can expect a starting salary of over $ 27,000/yr. or $13.24/hr and a top salary of just under $48K, which is not exactly minimum wage. 

One area college responded by sending out a press release touting their current and future  increases in STEM classes. One of the clips played was that of someone saying that they were in business to train "the labor force of the future, and the future is not in a field or a factory."

This single incident illustrates the disconnect between the realities of day-to-day business needs and a certain intellectual naiveté about the future.

   

Nonprofits offer a funding avenue for some low-income students. Since they don't produce a revenue stream of their own, they are totally dependent on the largesse of both the government and private donors. These gifts and grants (or contracts) are the source of some truly big funding pools, such as the $20 million dollar scholarship fund established at Notre Dame.

That money tends to follow what's trending at the moment and that trend isn't money for trade or vocational schools.

While no one would argue that the future does indeed indicate a need for a well-educated workforce with different skills than those of the 20^th century,  the yardstick that we use to define "well-educated" needs to reflect an awareness of functional reality.

When education-based nonprofits set their program goals, and donors at every level write their checks or set up their trusts, it would behoove us all if they could keep that perspective in mind.

Philanthropy without relevancy is as counterproductive as no philanthropy at all. 

Grant information - Animal Shelters and rescues

Rescue Bank is accepting applications from qualified 501(c)(3) rescues and shelters for their pet food distribution and assistance program.

The group has an ongoing application period.  To view the eligibility requirements see:

http://www.rescuebank.org/eligible-recipient-groups/

Please note that there is a phone number given that you can use to see if your organization qualifies as to geographical and organizational status.