Monday, June 28, 2004

Changes Happen - Let Your Constituency Know

One of the agencies that I work for is on a fiscal year that runs from July 1 to June 30th. In two days I will close our donor software books for the 2003-2004 fiscal year.

Our 2004 - 2005 agency budget was radified by our Board in early June. We just finished summarizing the results from our 2003 -2004 annual client survey from which we tabulate clients' response to what we do and how we do it. The list of foundations who donated grants to us this year is longer than last year's list. And, there are many other changes that occured in the 2003 - 2004 fiscal year compared to last year.

I have been busily checking our agency thank you letters to donors to be sure that they are updated and current. Similarly, I have made sure that our grant proposals reflect all of the current and new information. We have thanked those foundations that granted to us this year, in our newsletter, as appropriate; and made sure that they were reflected in place of last year's grant donors.

It's work to keep up to date but it pays off. Our donors and clients can watch our progress. Thank you letters are refreshed annually, so that recipients know that we inform them as soon as new information about this agency is available.

Our goal is not just full disclosure, but really, our goal is to include donors and clients in the progress that we experience. They are a part of our betterment or changes, and they are in on learning about it. The sense of community is extended to everyone involved with our agency in this way.

When we experienced a down turn in donations after 9/11 shook the country and our economy; our consituency was not surprised to receive a 'one time' solicitation that they had never received from us, before. We had let them know gently that we were feeling the economic change. It was called "Ten From Our Friends" and the idea was that if every donor who had given ten dollars or more to our organization over the then past two years gave an 'extra' $10 that year, we would be back on budget, despite the economy. We made over $16,000 from Ten From Our Friends, which helped. Our annual agency budget is not much over $500,000/year usually, so we felt that $16,000 increase. Without our community, we would have been down $16,000 in 2001.

Note the changes at your organization, and as appropriate, be sure that your consituency is told about them. When your org is in need they are there. When times are good they are there. There is no reason not to include the whole community in what they've contributed to.

Monday, June 21, 2004

The Word "Gets" Is In "Budgets"

Most often a budget is one component of a grant proposal. This one part of the document can be 'the hurdle' for some. You may wonder,

'Who creates the grant proposal budget?'
'What information goes into a budget?'
'How detailed does the grant proposal budget need to be?'


You aren't alone.

As a public entity and as an entity asking for financial assistance, expect to fully disclose your organization's accounting. Investors have a right to get a sense of your whole organization including costs, how and where money is spent, and how well its money is handled.

When a foundation receives a grant proposal they are looking at one of many many documents that they have to read to understand the request, the agency making the request, what the money is requested for, and how healthy is the agency, among other points.

One way for a foundation to determine your agency's 'health' is to look over your agency's financials. These are the agency's accounting reports such as the Balance Sheet (from the most recent closed accounting period), a Profit and Loss (Year to Date (which means 'so far in this fiscal year'), agency budget (current), and the past fiscal year financials (preferably audited by an outside accounting firm, per the Sarbanes Oxley Act).

The financials give a picture of how the agency's leadership spends the agency's money, where the money is spent, and how healthy your organization's cash flow is.

Your grant proposal budget details the accounting (budgeted and actual income and expenses)for whatever you are requesting the grant for. So, if you would like a grant to build an addition onto the single mothers' housing facility that your organization runs then the proposal budget would include all financial detail about the projected and actual (after the project begins) expenses and the projected and actual (after the project begins) income. Here's an example:

Mother's Safe Haven
Grant Proposal to the Nest Foundation
For Building an Addition to Haven House


$35,000 - Our Major Donors
$50,000 - Mothers' Foundation grant (Notification due Dec. 2005)
$20,000 - Good Neighbor Bank grant
$20,000 - Fundraiser Dinner at the Fancy Pants Hotel
Total: $125,000

Actual (Year to Date)
$20,000 - Fundraiser Dinner at the Fancy Pants Hotel
$20,000 - Good Neighbor Bank grant
$20,000 - Our Major Donors
Total: $60,000

Year To Date Income Total: -$65,000


$20,000 Building/Landscaping Materials
$200,000 Construction Labor
$50,000 Construction Management
$15,000 Architect
$5,000 Permits, Fees, and Notices
$1,500 Postage, Printing, Photocopying
$10,000 Electricians
$5,000 Landscaping Contractors
$10,000 Executive Director Salary
$1,500 Bookkeeper Salary
$4,000 4 Month's Mortgage Payments
$2,000 4 Month's Electiricty, Trash, Water, Sewage
$1,000 Cement Mixer and Labor
Total: $325,000 Total

Actual (Year to Date)
-$200,000 Good Guys Construction Labor In Kind Donation of Labor (Received June 2005)
-$50,000 Construction Management
-$10,000 Electricians
Total Paid:$260,000

Year to Date Actual Total Project Budget: -$125,000

If a foundation requests more detail in the budget; start with the basic information that needs to go into your budget (as suggested in the example above) and then add the detail as appropriate either as footnotes on the same sheet as the budget or in the written portion of the document.

Always be sure that when you proof read your proposals that the budget is also proofed by someone who can read and understand budgets and that everything that is mentioned in the written portion of your proposal matches correctly with the budget, itself. There should never be any discrepencies between what you claim in a proposal and the agency's accounting.

If the project head or the agency's accountant already has a budget for the program - great, use it! Make sure that each line item is described well enough so that anyone reading it will understand what each line is describing (get rid of jargon). Also, be sure that each party in the project has ok'ed that budget.

Monday, June 14, 2004

Your Track Record Is Out There

Foundations and other entities that donate grants talk with each other. The foundation trustees, staff, and program managers are not only colleagues working in the same field; they have a fiscal responsibility for the grant donation choices that they make. One way to investigate whether a non profit is a good candidate to receive a grant is to ask colleagues whether they've given that agency a grant before, and if so, what was their experience with that agency?

Was the agency truthful in their grant proposal? Did the agency account for the grant in their bookkeeping honestly? Was the money spent only on the program/project? Did they complete any reporting that was asked of them? Honestly? In a timely manner? Did the grant money result in benefits to the community? Would you grant to them again?

Or, if a non profit is currently working on a grant raising campaign for a single item, project, or program, several different grant proposal recipients (foundations, etc.) may get together to discuss a giving strategy for each of their foundations to give to your organization.

For instance,

Barney Rubble Foundation's representative may suggest, "We know that there is a need in our community for a $60,000 adult day care program. We each received a proposal to submit a grant to it. What do your foundations think?"

Joanie from The Fonz's Friends Fund may respond, "We know the need exists, too, and our own foundation's research suggest that the need that they state in their grant proposal was right on the mark. The need in our community is there and the amount that they are asking to start the program passed our internal audit of their proposed amounts,"

"We at the Mork & Mindy Trust feel the same way," Wednesday said. "We have heard good things about the non-profit's success rate and reputation. We're willing to fund them. We're going to give the full ask request that they proposed, $20,000,"

"Ok, that's what my trustees wanted to know,"

"Mine, too,"

"Well, we at The Fonz's Friends Fund will submit the $10,000 grant that they asked of us, then,"

The Barney Rubble Foundation's rep smiled, "My trustees will feel more confident due to your foundations' leadership. We will submit the $15,000 asked of us, too, then,"

This is the conversation that you probably hope that a group of foundations that you submit grant proposals to would have. It's a good one.

These grantors are each familiar with your organization. They are familiar with your agency's work and reputation. They also feel comfortable with giving because they checked the numbers (dollar amounts and the need for the adult day care program that you claimed) in your agency's grant proposal and everything was realistic and accurate. Your agency and its proposal lead to the Mork & Mindy Trust giving first. Not only are they going to donate a grant, they are going to give your non profit the full request amount of $20,000 to begin the adult day care program. Mork & Mindy Trust were community leaders indicating a commitment and a strong one to this program. The other two grantors followed suit. Having a major foundation lead the granting is powerful. It will allow your non profit to go to several other foundations, now, and list these three foundations as granting the amounts that they are, while your agency mails grant requests for the remaining $15,000 necessary to begin.

Your agency's track record in its work and its reputation as a timely, honest, accountable, open, and well researched agency is as important to getting grants as who writes your grant proposals, or anything else in your fundraising plan.

If your agency were to go against any ethical principals while soliciting for grants or while spending received grant money, the result would be farther reaching than just harm done to the relationship with the grantor who gave your org that grant. Foundations do talk to each other and if you request grant money at all, they have or will discuss your organization. Make it easy for them to give your group a grant. Set your organization up for success.

Tuesday, June 08, 2004

Remembering Leaders

We've reflected on his leadership since President Ronald Reagan's passing this weekend. We also reflected on the leaders, whose names we do not each know, that altered the contemporary course of history on June 6, 1944 at many various beaches on France's west coast.

You may be a leader of a non profit organization, or perhaps a community leader who volunteers? We are all familiar with a leader that we have admired, and we all could tell stories about the people who were supposed to lead us that were not effective.

Leadership is relative. Where there is a need for a leader, one really only fulfills that position if they are in fact motivating others. Group leaders are not always the one hired as the executive director, or board president, etc. There may be someone paid to be the executive director or the CEO, but it may be another member of the organization that fulfills the actual leadership role.

Non profits require various numbers of leaders for a single organization. For instance, there is the program manager, case manager, executive directors, CEO's, board president, committee chair, the volunteer who mans a table for your agency at an event, etc.

The organization functions because of the various leaders and the many parts requiring leadership. How well it functions depends on those leaders' abilities to truly motivate others.

On your short list, what are the requirements of your agency's leaders (both paid leaders and those not recognized formerly as a 'leader' in your organization)?
1. Gets along well with others
2. Can multi-task
3. Has experience managing people
4. Has a good resume' and history with past positions

What about another short list? Here's my hypothetical:
1. Thinks on their own, but listens well to suggestions and new ideas.
2. Is creative and stays open
3. Is not afraid to listen to themselves
4. Sincerely tries to do what they believe should be done from a place of genuine interest for the mission statement.

There's no 'right' or 'wrong' if you are hiring in a safe and professional manner.

Dream of the leader for each leadership position in your organization. Ask subordinates, superiors, colleagues in other organizations in the same position, and any other person who would work directly with this position in your organization; what would the candidate's traits be that would make this position a strong and effective one in our organization?

When each of our favorite leaders started out, they did not know what entirely their job would entail, or the leader they would become, but they knew what they could do and they grew into the leaders that we admire, in retrospect.

How do you look forward to those same types of leaders for your organization?