Does your small nonprofit need more cash?

The number one complaint Cloudlancer Writing Services receives from new and smaller nonprofits is that they are largely left out of the grant funding loop.

Either the grantmakers want several years in business, a revenue average of from $100K to $1 million, they aren't taking applications, or all of the above.

News flash…you don't need their grants to stay afloat and even grow.

The second largest source of funding for all nonprofits (after fees paid for services) is funding by individuals.

You say you have a donation button but no one clicks on it?

    

To increase donations you need to think like a marketer.

Good marketing doesn't initially focus on the product. It focuses on the needs of the audience for the product or service, and maintains a consistent message across all platforms.

In the case of nonprofits, when you need donations, ask yourself what your typical donor wants to see or hear.

To understand that connection, think about the sudden uptick in ads for those copper/ceramic coated cooking pans.

The infomercials don't start out telling you why their skillet or pan is the greatest.

Instead the ad spends well over half the time reminding you why you hate your Teflon™ coated cooking utensils.

The ad overtly capitalizes on your desire for a better cooking experience, while covertly appealing to your interest in new and healthier eating trends.

Learn the difference between grant proposals and donor marketing

Unlike grant applications, which tend to be program-specific, your core mission can work as your product when marketing to individual donors.

   

Individual donors are far easier to sway to your cause than the grant making institutions, there are a lot more of them and they are a lot easier to reach.

To market to them, think about why they donate. (Hint:  It's not because your organization can't pay the utilities this month.)

What do they get out of donating?

For some it might be personal because they are, or know someone who is, affected by the problem your programs seek to solve.

For others it might be a general sense of responsibility to society or perhaps it just makes them feel good to help.

This can  take a little detective work.  In the business world, it's called market research, in the nonprofit world it's donor outreach research.

Because everyone's circumstances change,  it's something you have to stay on top of to be successful over the long haul.

It's a bit more complicated than having me or anyone else write a boilerplate program narrative, but customization and attention to detail will pay off.

There are a number of approaches that will work under different circumstances. It can be a blog, Facebook, Twitter, YouTube, snail mail, a really well-designed website, or a combination of all of those.

Whatever you use, be sure that your message, your brand if you will, is consistent. That might be a common tagline, the name of your organization, or a visual, but it needs to become something uniquely identified with you.

Speaking of your audience, it pays to know who they are demographically. That allows you to tailor your appeals to their income comfort level.

Conventional wisdom says you should keep your smallest donation request above $25 or even $35 dollars.

I don't agree. One urban agriculture-centered nonprofit found that by starting with a very low minimum donation of five dollars, they were able to grow their donor base and increase their online donation traffic  by 350% the first year. The next year they dropped the $5 category, and 89% of their donors just switched to $10 without a second thought. Another seven percent actually moved up to the $15 level.

The secret for that campaign was the money was tied to what it would buy; seed packets, a hand trowel, a bag of fertilizer and so on. This image-heavy strategy didn't need 1000 words to explain where the money would go…just a picture and maybe five or ten words.

The idea there is that you want to build up a habit of supporting your nonprofit first and work to increase the average donation amount as you go along.   

Need help?  Drop me a line at rightwords@ida.net. Let's talk about making your "donate here" button really pay off.

What kind of help do you need?

Does your nonprofit need help? More important, do you know what kind of help you need?

Hint - It might not be a grant.

A quick confession.  I backed into being a consultant/startup adviser from being primarily a grant writer that specialized in newer nonprofits.

Why?

Because too many of my clients were so unprepared to ask anyone for money.

I found myself spending a lot more of my time getting clients to the point that they could meet the grantor's requirements than actually writing the proposal.

These were clients that had been in business for a while (the minimum time in business for me to consider a grant writing client is two years) but just weren't moving forward.

Some of them had no coherent program strategy. Some had no overarching fundraising strategy.

Some didn't even have budgets, organizational or program.  Without a budget, you can't define a fundraising goal. And those are just three of a long list of problems that had to be solved or managed before I could even look for grantors that matched up with my clients.

I even wrote a nice little free handout called "Why you can't survive on grants."  Lots of people requested it, few agreed with it.

I remember one person who got the handout and then wrote me a scathing email that read in part,  "Listen, nonprofits CAN'T survive without grants. Why do you think they started anyway?  It was to get people with money to stop being so selfish and put their money to work for good."

With all due respect, if that's your reason for starting a nonprofit, I can't help you.

Another problem is what I call the "someone else has to do the dirty work" philosophy.

Some clients don't want the tools to succeed. They want to order a ready-made nonprofit and have it shipped to their door.

For instance there was the client that had no budgets of any kind because they had no idea what anything cost to produce. When a grant asked for the cost per meal of their supplemental feeding program, they told me to "figure it out and let us know."

Uh, that's not how it works. Those are figures you should already have on hand for any grant writer. I offered to show them how to arrive at the figures and they terminated the grant writing contract because I "refused to compile requested information."

I think they had me confused with their chief operating officer.

Incidentally, neither of these two are still in business.

Only you know what areas aren't working for you. Is it volunteer and/or employee retention? Funding insufficient to accomplish your mission? Perhaps the board and the CEO/ED aren't on the same page? Has increased need outstripped your level of development? Applying for lots of grants but seldom or never landing any?

Whatever it is, it's usually not because you are having trouble getting or need a grant. That's ordinarily a symptom, not a cause.

Think of it like a broken down car. You know the car isn't running, but someone has to lift the hood and replace the right part to fix it.

The nice thing is, most of the time the real problems can be remedied. In terms of your time, commitment and yes, money, the solutions aren't free,  but they do exist.

What isn't working for you?

Drop me a line and let me know.  Let's see if we can fix it. 

Why didn't you get the grant?

You've poured your heart and soul and maybe money into creating the perfect grant proposal.

After waiting weeks or maybe even months, you either get a Dear John letter saying thanks for applying, or you go to the grantor's website and you are definitely not on their list of funded proposals.

Even worse, you may not get any feedback at all

Your first (printable) reaction is "what did I (we) do wrong?"

Maybe nothing. Statistics show that there are often as many as 100 applications for each round of funding awarded, and that brings the laws of supply and demand into play.

In that case, your carefully crafted proposal just got lost in the crowd.

That's not to say that your proposal is always perfect.  I get a few requests to review and/or "punch up" proposals every month and some of them …well, let's just say some of them need a lot of help. Perhaps they don't have any tangible results to report, or there are grammatical or logic errors, or their program didn't really fit the grantor's mission very well.

But some are stellar. No, really, there is absolutely nothing to fix.

That's the most frustrating part of proposal submissions.  Perfect isn't always good enough.

In that case, it really isn't you, it's them.  Here is a short list that explains how that happens.

1.  The grantee was pre-selected. They already knew who was going to win before you ever wrote the first line.  That happens when the grantor's bylaws or guidelines require a minimum number of applicants.

2.  They ran out of money.  I actually know of a foundation that had so many good proposals that they assigned each a number and picked the winners out of a hat.

3. They were looking for an intangible quality that they didn't include in the guidelines. I call that the "I'll know the perfect house when I see it" effect.

4.  Too many applications, and they just didn't have the time or inclination to evaluate every proposal thoroughly.

5. Fear of the unknown.  Grantors may have had a long-standing relationship with just a few nonprofits and the award committee might be afraid to try something new.

In some cases, you may get a letter that invites you to try again. I always suggest that you update the necessary areas (results, other supporters, etc.) and give it another chance. The next time you may be top-of-mind because of your previous submissions.

If the grantor is located close to you, do a little more in-depth research.  Check out the principals to see what sort of organizations they belong to or whether they may circulate in the same social circles that you frequent.

In fact, I usually recommend that you try at least three times. Things and people change and it would be a shame to fail to even try.

Also, it never hurts to check out the competition, assuming you know who got the grant. Sometimes there are subtle (and they can be very subtle) clues you can use to tweak your proposal next time.

In one case,  I noticed that all the grantees selected were within just a few miles of the grantor's headquarters. My client was over 50 miles away, although still within the geographical zone of the guidelines. The next time they applied they addressed the distance factor in a positive manner and were awarded a piece of the pie.

Although it seldom bears fruit, it can't hurt to ask why you were not successful.  Sometimes you will get an answer. Bear in mind, some grantors will say right in the guidelines that they don't give feedback.  In that case, save your breath and time.

You should always write the best grant application possible, but if it doesn't work out, don't get so discouraged that you quit trying.

If you would like a review of or assistance with a proposal, you can reach me here.

When something isn't working…

Stop doing it.

Some of may have noticed this blog has been on hiatus for the past six months. That's right, I took down a reasonably successful blog and just stopped, cold turkey.

Part of that was due to a long-term contract, but to be truthful part of it was due to a need to re-assess why I write it.

I've always thought that if your advice is worth anything, you should be able to take it yourself.

I started this blog to provide insight for you into the world of start-ups, which I define as any time between the day you think of starting a nonprofit or small business and when it first becomes self-sustaining.

The less altruistic motive was to generate serious clients that truly wanted to provide a service or product and make or attract money while doing it.

 

The blog did generate client interest, but not from the type of serious entrepreneurs and social-preneuers I wanted to help.

Instead, I was seeing a lot of people looking for a get-rich-quick scheme. Maybe that's a result of the hustler world we live in, but part of it was me.

You see, I honestly believed that there were a lot of people out there who wanted to experience the satisfaction of having built something with their own two hands, nurturing it and watching it grow.

I would provide the knowledge via consulting services and the nuts-and-bolts tools like grant writing, planning documents, and web and print content, and they would use them to move forward.

All right, all right, so that was naïve.  In other words, I misidentified the target market.

I just had no idea how naïve until I started the afore-mentioned contract. Without giving away any secrets, it was designed to monitor large societal shifts in attitudes. 

Suffice it to say, this blog was always for people that really want to do the work to succeed. But now it will ask you to demonstrate that commitment.

Here's where this blog is going from here.

Just how serious are you about succeeding?  We're about to find out.

The main content will only be available to readers that ask for it.  It will offer new content on a semi-weekly schedule on a subscription basis.  The topic will be teased before publishing, so you'll know what to expect. 

I still think there are people out there that fit my target audience, but I could be wrong. If, after 3 months, i.e. by September 30 , 2016,  it isn't proving to be viable, the blog goes away forever.

You don't need a grant writer to start a non-profit

Fully 50% of the calls or emails I get regarding my services involve a desire to hire me to help acquire funding for someone to start a non-profit venture or fund one that has just received a determination letter.

I'm flattered, but you don't need me to find you money, because neither I nor any other grant writer can "get" you a grant at that point in time.

The cold hard truth is there are zero grants available from either foundations or government agencies to start a nonprofit.

That's because true grants (money with no repayment required) have to be made to existing nonprofits. Legally, private grantmakers are prohibited by statute from advancing funds they receive or administer for charitable purposes to a for-profit or an individual.

In the case of  newly approved organizations, while it is technically possible for grantmakers to fund you, in practice that seldom happens.

Here's why.

Typically, every grantmaker will require  that you furnish them with a long-form 990 (the nonprofit equivalent of a 1040 or 1120) for at least the prior two taxable years. Some will even go back five years. They may also require audited financials or have a minimum revenue requirement that you must meet before you can even apply for funding.

Additionally, very few foundations or government agencies have rolling grant open application periods.  Thus, you typically can only apply at specific times, and the awards are actually funded as much as a year later. That means that you never have grant funds available at a moment's notice.

Grantmakers do not fund organizations. They fund programs that align with their interests and produce their desired outcomes. For that reason, they are very picky about what organizations they fund, and look for partners with a proven track record. Only about 1 in 10 grant applications submitted are funded.

Grants should never comprise more than 30-35% of your revenue stream, since they seldom if ever provide unrestricted funding, and almost never fund your normal costs of doing business, like utilities or rent.

In this 2012 report, on page 3,the National Center for Charitable Statistics (NCCS) reports that nearly 75% of all nonprofit income originated as fees for services paid by government and private businesses. 

In other words, you must find another way to fund your operations and programs 100% for a minimum of the first two years, and you must maintain varied income streams for the life of your nonprofit.

How do you do that?

The normal funding development progression happens like this:

·         Self funding – the board members either personally contribute the start-up funding or use their contacts to solicit funds from their business or social networks. BTW – don't state that donations may be tax deductible until you receive your determination letter.

·         Community events –think along the lines of auctions, car washes, bake sales, galas, sponsorships etc.

·         Social impact investors – although this option has not taken off the way the nonprofit industry hoped, there are still investor groups that are active in this field. Note that the funds received have to be paid back with interest, just like a traditional business loan or any other sort of angel financing. The investor's ROI expectations are typically within periods ranging from 90 days to three years.

·         Online appeals – Platforms such as GoFundMe don't require that you have nonprofit status to solicit funds. Other online fundraising options may or may not ask you to provide proof of status. There are fees and commissions involved so don't budget for gross donations. As an aside, the "Donate Here" button on your website will only generate a small portion of your needed funds until you have a track record and good outcomes to share.

·         Fees for services – for most nonprofits this is the largest single source of funds. Studies such as the one refernced above have concluded that from 60 to 75 percent of all nonprofit funding comes from contractual arrangements with government agencies or for-profit businesses.

What a grant professional CAN do to help.

Many grant writers, myself included, can and do provide research and development services to start-up organizations.

For instance I provide a feasibility service for would-be nonprofit founders. Think of it as a preliminary SWOT analysis as found in a business or more properly, a strategic plan. It evaluates such things as your mission goals, monetary support available for your mission and any other competitors working in your field, both for- and non-profit.

I can't possibly stress enough that you need to have at least a basic plan before you even apply for your nonprofit validation from the Internal Revenue Service.

In essence and assuming that you are just in the planning stages, a well researched and prepared strategic plan provides a step-by-step organizational development roadmap, as well as a series of benchmarks that allow you to evaluate your progress.

When I produce (with your input) a full strategic plan, it will cover such things as setting up your initial budget, based on operational and program costs for the first two to three years, whether to apply using the 1023EZ or the full 1023 application form, board development, what type of state corporation you need to form (a step required in advance of your 1023 application) and a brief overview of solicitation law affecting your fundraising. If desired, it may also have a mission development section that defines not just what your mission will be, but what programs and how much money, property  and manpower will be needed to produce your desired outcomes.

I hope this gives you a brief glimpse into world of non-profit financing.  Feel free to contact me at 208-525-2071, or email me at rightwords@ida.net if you have further questions.

Long-form thinking in today's short-form world

I've written a lot about having a cogent strategy when you start a new nonprofit or small business. I'm beginning to think that the market for that advice is as dead as a fossilized woolly mammoth.

  

I get that in the age of information overload, you have about 7 seconds to capture your target's attention. I've written my share of SEO-friendly 50 character action posts and catchy sales pages.

All that's fine, well, and good, as long as there is some actual thought behind your hastily thumbed tweet.

The problem is that it seems as though our brains are now in permanent short-form mode.

Recently a twenty-something wanna-be nonprofit founder/entrepreneur asked me to come up with some content for their Twitter feed. As she put it, "something that will show people we care about "X" and need their money to help."

So I did what any consultant would do…I asked her to outline her value proposition or mission and vision statement so I could better represent her organization.

She didn't have anything, beyond the idea that if she could separate enough people from enough money, she could "help."

No budget, no program/product outline, not even a firm idea whether she wanted to be a nonprofit or a for-profit with a philanthropic division.

Her reasoning?  She did know that it takes money to make money, and she didn't have any, so she figured she'd get the money first and figure out what to do with it later. 

I'm not sure if she was simply naïve or she'd gotten her hands on some really good weed, but that ain't gonna cut it.

Maybe it's old-fashioned, but believe it or not, people actually want some substance available before they invest in anything.

 

If you want other people's money, you have to provide value.  It's just that simple.

As boring as it might be, you have to have a plan, objectives, results and at least some understanding of why people purchase or support anything.

In short, this business thingie is a lot of real, brain-busting hard work.

Hopefully, there are still people out there that can think in those terms. 

How does your small business find employees?

Recently a friend called me to ask if I had any leads to help her find a part-time administrative assistant.

Julia (not her real name) said she had posted an opening on the state employment office's website, but after three weeks, only one qualified applicant had applied. She did not want to use one of the many private employment firms, feeling that the extra 2-3 dollars an hour they pocketed for their service didn't reflect the value of the services they offered to manage just one employee.

In a town of just over 50K with a well-respected technical college that seemed odd. I decided to look for her posting.

I discovered that the heretofore in-house state managed job listing had been turned over to one of those internet-based job posting firms. A call to the local state employment office netted me a referral to the website.

First of all, I couldn't find her posting through the keyword search function, using "administrative assistant". Only when I used her specific business name did the listing finally appear. Predictably, the posting was titled "Office help wanted". At no point in the posting did the words "administrative assistant" appear.

Interestingly, the posting did show up on Glassdoor and Indeed using the keyword "office". The information did re-direct to the state sponsored website, leading me to wonder why only one person had managed to navigate through the maze to actually reply.

I surmise that most of the people looking for work locally weren't using these sites to search for openings. Typically, local employees tend to use local searches, like the employment office or newspapers.

That points up the problems with our keyword and SEO oriented age.

If the person searching isn't using the same descriptors you are, you might never connect.

I referred Julia to the local college employment office, and had her re-write her ad so it would search more effectively. I also suggested that she run a help-wanted ad in the local paper, since it has both a print and online presence, and that's where she finally found her new employee.

After revising her ad, she received over 50 responses, and of those 50, almost half were well-qualified for the position.

In all of this research, I did notice that there were almost no truly small businesses using the new state job search resource. Most of the listings for openings were from government or large institutional or retail employers.

That leads me to wonder whether there is truly a "shortage of people that want to work" or  is it that they can't find each other?

So I'm asking…if you are a truly small business owner (25 employees or less),  where are you looking for employees, and how much success are you having finding them? Email me here or post in the comment section and let me know. Perhaps there's a way to make this easier and more effective for everyone.

Addendum:  If you are looking for work and can't find openings in your town, feel free to contact me as well. Where are you looking, and why aren't you connecting with employers?