Monday, March 25, 2013

In Kind Donations - What They Are and How To Raise Them

What are In Kind donations, why does an organization want them, and how does a nonprofit raise them?  

In Kind donations are unique, in nonprofit fundraising, as these donations are usually given based on a nonprofit asking for a specific item, for a specific need or use, for one of its specific programs or services.  In other words, to compare In Kind donations to other types of contributions that a nonprofit will raise, this will not be a monetary or capitol gift and will not be allocated to a general or overhead fund (as some funds raised are).

For example, let's say that you and I work in the fundraising (or development) office of a local emergency services nonprofit that is about to open its first, local, temporary housing for families displaced by natural catastrophes (such as floods, tornadoes, hurricanes, wild fires, and so on).  The building is almost complete.  Our nonprofit began planning this new service (temporary emergency housing for families) six years ago when it was discovered that no such service exists (no other nonprofit does this in our region) but has been increasingly in demand, locally, over the past eight years (independent, credible, and demonstrable studies found).  This sort of service fell within our nonprofit's mission statement and the board felt strongly (after discussing, debating, and voting on it) that our organization should provide it. 

The capital campaign (that raised the funds to build the new building of twenty condominiums), grant writing campaign (that helped fund the temporary housing program), major donors campaign (that provided large increment donations also specifically for this program) and other fundraising methods that directed a portion of money to or entirely went to this new program were planned out shortly after the board voted to indeed proceed with this new emergency housing service.  The fundraising plan was implemented and started five years ago.  The building was designed and a site located.  The building was built, furniture and other amenities (such as kitchenware, shower curtains and floor rugs, etc.) were purchased and installed inside, and so on until we arrived at today, which is about six month before our organization will officially open Home Away From Home (the temporary housing building of 20 condos).

So, back to our scenario and you and I at the office...

Today, at least six months before our new emergency housing's grand opening, you and I are going to begin the In Kind donations fundraising campaign for Home Away From Home.  For each condo, we are looking to raise the donations of: a microwave, a coffee/tea maker, a digital alarm clock, a land line telephone, a desk, a chair, hangers for the closet, an ironing board, an electric iron, and a hair dryer.  While we have twenty condos, we will want to have a few extras if each of these items on hand as we expect attrition.  So, we are raising twenty five of each of these items for each condo (and five extras to have on hand).

Notice that these items are smaller but still important and needed. 

We take a look at our list and do some research.  Do not send a solicitation letter requesting an In Kind item from everyone who has ever donated to your organization or to every business in town.  Consider your organization's resources, volunteer/employee time, and your donors' patience.  Approach only those potential donors who are likely to give the actual items your organization needs.  We take a look at which stores or other types of suppliers conduct business in the community that this emergency housing will serve.  Which sells or resells the actual items we need?  We then consider which of them would appreciate the opportunity to donate any of these items (in any amount that they can afford to) as it is a benefit to their business's public relations and marketing to be able to state (..."we donated x, y, and z to Home Away From Home local emergency housing"...) in any of their own advertising and press?  For instance, it helps to consider which of the businesses we might approach has donated to our organization in the past?  Which of those businesses have relationships with any of our board members or organization's active volunteers or executives?  Which of those businesses would benefit in the public's eye from being associated with our new program because perhaps they are in the same or a related business field (i.e., in this example, perhaps the emergency services industry, building industry, is a contractor, and so on?).  We think about this from all angles.  We consider what potential donors might want to be associated with our program because their field or business is similar to our program's but too, we want to look at the possible opportunity that our clients and their needs present to potential donors (to the extent that it is ethical and fair to ALWAYS, of course). 

For instance, in this particular scenario, we provide emergency temporary housing.  It is fair to assume that some of our future clients, who are home owners, will need builders and contractors names to consider as they and their insurance agents shop who should repair or even rebuild their damaged homes.  So, in this scenario, we offer potential donors who give needed new items for this program to our organization, not only a wonderful and positive public relations and marketing opportunity (as stated in the "we donated..." quote above) but too, we may decide to also add each donor to a list of potential contractors and builders for each of our home owner clients to consider for their needs in the future (which is neither endorsing nor guaranteeing anything to anyone except a bit of free marketing to potential clients.  I would be explicit if we offer a list to our nonprofit's clients stating something like, "These local businesses contributed to Home Away From Home, and so our organization is happy to make you aware of their names and local contacts' names.  Their being on this list is not an endorsement.  Any potential builder or contractor you choose to work with should be asked for references and investigated first, and considered against others before being selected.  Use contractors or builders at your own risk." [This is just an example of possible wording for the sake of clarity and is not a recommended phrase to protect your organization.  I am not an attorney.  Please do not use this phrase.  Always ask a lawyer or attorney for proper wording for all of your nonprofit's professional legalese.]  My point is your organization wants to promote those who have assisted it without becoming some middle man or referral agency!  Further, perhaps we are going to take out a page in our local paper and some online advertising to promote our new emergency housing program.  We additionally, could promise to provide all donors and sponsors of Home Away From Home a 'thank you' or be listed in a "partners" list, or something like that.  We need to look at what opportunities to assist these potential donors exist (from all angles) beyond just our receiving a contribution and their being able, after giving, to say 'we donated'.  The more - the better!

So, during our campaign, we need to develop a solicitation letter (complete with a response form enclosed, for the donor, should they choose to give), a way to follow through with each donor on each promise we make to them (i.e., if we are going to include them in a full page spread in the newspaper and have promised to list their business, we need to ask them to e-mail us their company's logo (and specify the format and size file you need) and then organize that so that we have their art on time and in the format that the paper requires).  We must keep records of what we solicited from which entities, and then of course, keep records on what we received, when, and from which donors.  Then, we need to pick the items up, get them to Home Away From Home, and installed correctly.  In response, we must send thank you letters to our donors stating, along with other required information, what the fair market price is of the item(s) they gave (according to the IRS's donation rules for In Kind items).  This thank you letter becomes the receipt for their donation when they claim the donation with the IRS.  Finally, we follow through on all promised public relations, marketing, and other benefits to our donors and finalized that (i.e. printers or newspapers will ask their customers to proof a final of an ad or a program brochure, etc.).  Time is of the essence in the success of these kinds of campaigns, so this all must be thought out and planned for in advance (including a timeline) and that timeline must be followed.  You don't want to drop the ball on a promise to a donor.  They tend to not give again if they feel they've been mistreated.

Often, it is helpful for the sake of determining the In Kind item's fair market value, to ask the donor what the fair market price is as a line item in their donation remittance form, if they choose to give, in response to our solicitation letter.

For instance, let's say we ask our local Home Depot for 25 new mid-range electric/tea makers "...for the benefit of local families displaced by natural disaster during their temporary housing." as the solicitation letter says.  Home Depot, by virtue of being a retailer, will have the "fair market price" of the item on hand as they obviously sell it.  Home Depot is a recognized well shopped vendor and so their "fair market price" is truly that.  For those donors who give items but are not themselves retailers, to discover the fair market price of say a desk and its chair, it is helpful to look online for what the going rate is for the item (the actual item), in the condition in which your organization received it (i.e. new, or gently used, etc.), on popular or commonly shopped retailers sites and use the average price.  Don't ever boost prices or use outlier (extremely high or extremely low) prices during this kind of research as these are neither "fair" nor "market".

In Kind items may seem like ancillary, odds and ends, or last minute items that a nonprofit need not plan the fundraising for but they truly are not.  They are important and so raising them must be fully planned out in advance.  Sometimes the difference between someone displaced, per our scenario, feeling at home or not is something as simple but comforting as being able to make coffee in their "home".  That is something that businesses are often happy to donate for a good and worthy cause.  For these reasons the In Kind contribution is both important to the beneficiary and to the entity that donates it.  So, it is worth conducting this campaign right (and then the nonprofit begins or maintains a positive relationship with both its clients and donors).

Grants for Emergency Shelter Organizations Helping Victims of Domestic Violence and Their Animal Companions To Stay Together During Crisis

From The Foundation Center...

[If you are interested in this grant opportunity, click "Link to Complete RFP" at the end of this blog post for more information].

"Deadline: May 15, 2013 and October 30, 2013

"RedRover Seeks Applications From Emergency Shelter Organizations to Help Victims of Domestic Abuse and Their Pets

"Animal welfare nonprofit RedRover, in cooperation with Sheltering Animals and Families Together, is accepting applications from emergency shelter organizations to help victims of domestic violence and their animal companions stay together during times of crisis.

"RedRover Domestic Violence Safe Housing grants of up to $3,000 each will be awarded to as many as eight emergency shelter organizations to support the creation of space on site to temporarily house the pets of victims of domestic violence. The one-time grants are intended as start-up funding to initiate projects. It is expected that the funds will enable the housing of at least one pet within a year of the project's completion.

"To be eligible, organizations must be recognized as tax exempt under Section 501(c)(3) of the Internal Revenue Code. In addition, applicants must be organizations with a primary mission of sheltering victims of domestic violence.

"Applications for 2013 are due on May 15 and October 30. Funding decisions will be made within thirty days of the application deadline.

"See the RedRover Web site for eligibility and application deadlines."

Tuesday, March 12, 2013

Nonprofits, "Once In A Lifetime" Low Power FM Radio Station Licenses Available To You - Reach Constituents Easily and Tell Stories Not Told In Traditional Media

Nonprofits need to reach their supporters (donors and volunteers), potential supporters, but too, their clients, and the community at large within which they provide their services to ensure their community knows what they do and why, what their successes have been most recently, their potential for success in the future, what programs and services they are providing, to whom or what, and why.

Radio is an excellent way to do that.  It's even a better way to do that when your nonprofit owns and operates an actual FM radio station.  But, how could a nonprofit do that?  They're very rarely even available.

Well, hundreds of new low-power FM radio station licenses are being offered to nonprofits and it is a once in a lifetime offering.  See Hundreds of Low-Power FM (LPFM) Radio Station Licenses To Be Awarded To Nonprofits If They Apply

To quote the article, "This will be the first time that [sic. Low Power FM] LPFM licenses will be awarded in large urban markets, and likely the last time that they will be awarded at all, making the Oct. 15 application window an important opportunity for nonprofit community groups to reach larger audiences. Some potential uses for LPFM would be for recruiting volunteer and financial support, organizing, telling stories that don’t make it to commercial media, publicizing meetings and events, serving as resource for youth education, hyper-local community news, exposure for local artists and musicians, and much more."

Nonprofits successfully operate low-power FM radio stations in several metropolitan areas in the U.S., already.

Further,“Now is the time for nonprofits to prepare their application to own a part of the public airwaves,” said Sabrina Roach, a Doer specializing in public interest media for Brown Paper Tickets. “Most traditional media have not included the LPFM application window in news coverage, and the majority of groups eligible to apply are not aware that this opportunity exists. This is a problem, because the application will take about three months to complete."

Why do this?  As the advocates fighting for nonprofits to get access to these licenses explain,“Our hope is that community groups take up the challenge and use the public airwaves for public good,” Roach said. “An additional benefit would be in helping to correct the lack of diversity in media ownership, in that 87 percent of all radio stations are owned by Caucasians, 6 percent are owned by women and 7 percent by people of color, which influences the programming heard on the public airwaves.” 

If you are interested in learning more or discovering what the next steps are to begin the application process, go to Brown Paper Ticket's (nonprofit advocates and fair trade ticketing solution) LPFM Next Steps and Resources Adobe PDF.

Brown Paper Ticket have taken up the mantle on getting the word out to nonprofits so they are made aware of the fact that this opportunity is available to them, out of the interest in seeing more nonprofits on low power FM, and increasing the radio stations' owners' diversity and also what information is disseminated publicly.  As I said in the paragraph, above, they also are being sure to let nonprofits know how to go about applying for low power FM stations.

To quote Wikipedia's article on the subject, in the United States,"Low Power FM, or LPFM is a form of FM Broadcasting that uses a low amount of energy to broadcast a signal that does not travel very far. FM, or frequency modulation radio is often transmitted on a higher frequency than AM radio. Because of the low power usage and short range, LPFM is often seen as a niche radio station that plays things that relate more to the small surrounding community."

Radio, in the United States is under the oversight of the Federal Communications Commission which has been criticized (at a minimum, and outright accused in other instances) of restricting the diversity of ownership of radio stations (in particular the coveted stronger signal FM stations) nationally.  In other words, despite public concern, the FCC appears to provide the better positions on the FM dial to only a few large communications corporations.  Meanwhile, licenses for any position on the FM dial in larger markets (metropolitan regions) are rarely available to the public.  Brown Paper Ticket's goal, in part, by heading up this campaign is to ensure nonprofits know this opportunity exists to them, and that some scope exists in the ownership of FM radio stations.

To learn more about this offering read:

Brown Paper Tickets National, "Make Radio Challenge" Launch Brunch and Panel

LPFM Advocates Are at SXSW

Don't Touch That Dial: Low-Power Radio Is About to Make FM Hot Again

From A Porch In Montana, Low-Power Radio's Voice Rises

On a personal note to my readers, if your organization does decide to proceed with the application process and if it first heard about this opportunity, here on Seeking Grant Money Today, and if you're alright with it, please let me know in the Comments section below and also share how I can get a hold of someone at your agency.  I would appreciate the opportunity to track what a nonprofit's experience is in this historic moment.

Update - Related 7/23/13 news item: In switch, U.S. military offers to share airwaves with industry which does not speak directly to what kind of industry (i.e. nonprofit sector as well as the for-profit sector) but this possibility will be one to request more information about from your federal representatives if you are interested to know.