The Nonprofit FAQ
| How do we find local support for our program? |
| By Donald A Griesmann, Esq. See also: Don Griesmann’s Grant Opportunities at http://www.charitychannel.com. A sampling is available through the link at the left hand side of the page; a subscription fee is charged to view the complete contents. September 20, 2006 Where do you begin looking for grants and funds locally for nonprofit tax exempt organizations? First, take a look at the world of grants and giving to charities. Each foundation and corporation has a mission and a set of values. The mission and the values drive their giving to nonprofit organizations. In 2004 there were 66,400 foundations the overwhelming majority of which limit their giving to their local communities. Corporate foundations are likely to receive 1,000+ requests a year.
What this information points out:
So, where do you begin? You must begin with a board of trustees or directors who share the interest, the time, the vision and the passion for the mission of the organization to the extent each is willing to donate money to the organization annually. That donation need not be beyond the ability of the board member. It does need to be an appropriate financial donation according to the ability of each member. I have been fortunate to have two careers in my lifetime, one as a minister and one as a lawyer. At least one common thread shared by both is that I was a story teller. As clergy, I had the story about God and the strength of faith, hope and love. As an attorney I had the opportunity to advocate, to help tell the story of a client facing life’ problems. In each profession I had to do research. I had to know the facts as they were available. I had to reach others persuasively, a congregation, a client, a judge or a jury. Your organization has a story to tell. What is that story? Be prepared to tell the story, to advocate factually, simply, ethically and humbly. You must also know how your story is heard. Organizations need to afford donors an opportunity to “talk” to the organization about why they support it and what they think can enhance its mission and image. Know your organization. That may seem silly to say, but securing support involves this self-study. What do you really know about your organization, its internal values, mission, passion, ethics and culture? What do you know about how the organization is perceived in the local and regional communities? How is the organization demonstrating its mission and place in the community through cooperative ventures, leadership, meeting its goals and objectives, its activities, its stance on community issues, its web site, blogs and public contacts? The ability to understand these items and to have appropriate responses to them will enhance the ability to raise funds. Grant seeking, fundraising and getting funds are similar to dropping a stone in a pool of water. The greatest ripples are at the source of the drop and as the ripples move away, they are smaller and smaller. The greatest source of funding for a nonprofit organization is at the local level. It includes securing funds from board members, not just volunteer time at meetings. It means asking for money. It means doing the mission and then raising money.It means telling the “Story”. Do you have a management system that focuses part of the resources to the development and maintenance of leaders and of volunteers? Is this organization adequately and appropriately managed and administered so that people want to be a part of it? You may have to have a solid review of the management systems, policies, procedures and recordkeeping to assure the fullest benefits. Does management have an understanding about grants, fund raising, resource development, marketing, planning, organizing, staffing, directing, coaching, coordinating…and receiving feedback? Does the organization have a business plan, a strategic plan or a short-range (2-3 years) plan or long range (3-5 years)? If the answer is yes, is there a section on local funding and resource development? If there is no written plan or no plan on local funding, that effort will have to take place. This paper may be helpful in identifying areas of planning to consider. Mantra: Action precedes money. Planning precedes action. “Action” includes the mission and the activities taken to fulfill the mission. It means having the fiscal integrity and process for handling money. It means being able to demonstrate the organization can sustain and maintain the mission. It means there is a history of performance and demonstrable accomplishments. “Planning” means there has been a formal process assessing the organization, its mission, goals, objectives and values, its place in the community, its ability to perform, and how and why it will continue to exist in the future. For further discussion on this see: Nonprofit Incorporating - Business Plan http://www.tess.org/misc/010708NP_Biz_Plan.pdf Local funding includes conducting fund raisers from a carnival to a black tie dinner and dance. This is labor intensive and must have board and community support; staff cannot do it alone. It includes seeking funding from local sources including local foundations and trust funds, Community Redevelopment Act (CRA) grants from banks, the United Way, local and county governments. In some communities depending on the program a NPO can seek funding from the Workforce Investment Board, either county or regional groups that receive federal funds. The planning process will include an assessment for the development of an active web site that tells your story, is easily read, is handicap accessible, is easily navigated, has information about the organization, lists board members and key staff, demonstrates transparency and offers both privacy and an ability to accept donations. What Must We, What Can We Disclose to the Public, Staff, Board and Clients? http://www.idealist.org/npofaq/0/1505.html Other sources for funding include charging a fee for the service. NPOs are loath to do this generally but it can be a source of revenue and needs consideration about a sliding fee scale. Some NPOs have found entrepreneurial activities from running a used clothing/furniture thrift store to developing a profit-making source of revenue from the profits. This is a highly technical undertaking. Planning will be intensive. A NPO has to be certain the income is not subject to the federal Unrelated Business Income Tax. Where do you start in seeking local grants? You work with your board to develop a plan for securing grants. Let me say here where you DO NOT START! You do not start by saying we need money. That will get you nowhere and may impede future seeking of revenue. You have to state why you need the money in terms of need in the community, how your organization will address that need and why the organization is the best one to address the need. All right, so you ask me for money to support a program or project. You say you need the money for staff. I will say to you, “So what?” So what will staff do about the need? You say to me that they are very busy and their salaries are low. And I will say again, “So what?” And you say that the staff is addressing a specific need (animal rescue, HIV/AIDS, hunger for instance) and I will say, “How?” At this point we are starting to get somewhere. We can talk about what you will do with the money. It may very well be used for staff salaries, BUT the request is aimed at community needs, not organization needs – and that is where you have to start. You and the board have to assess community needs. You have to assess what the priorities are. You have to assess why your organization can address these needs. Many communities have written needs assessments, by local government, the United Way, local college or university, local foundations, consultants and other groups. These needs assessments may be valid – or they may be invalid. Nevertheless you should be familiar with them and assess whether they are place for your organization to start your needs assessment. Add to that an assessment of the geography and the need to be served and met. How far from your NPO do you believe you could stand a chance to secure a grant? 25 miles? The entire county/parish? What are the major employers in this (limited or broader) community? Get their names, a contact person, addresses, telephone number, web site URL and e-mail address and what they produce or what service they provide. Create a simple data bank about each group. What are the banks in this (limited or broader) community? Prepare a list of banks showing all branches and telephone numbers, web site and contact person. The contact person will usually be the bank representative either with the corporate giving or foundation or the Community Reinvestment Act (CRA) officer – all Federal licensed banks have a CRA officer; your state may have a similar law for state licensed banks. What are the utility companies, gas, electric, telephone, cell and cable TV in this (limited or broader) community? Can they be contacted for possible support? Does the organization’s mission match their interest in the community? The policies and procedures organizations use to recruit board members and other volunteers are vital to the development of resources, volunteers and funding. Many nonprofits have not put in the time and effort to create meaningful policies and procedures for recruitment, orientation, training, and sustaining meaningful work for volunteers. Volunteers who share the mission and the passion of the organization who are effectively engaged in the organization can become the focus of leadership. That leadership can be translated into more active board members and supporters in time and money. Organizations with excellent volunteer programs may be able to recruit volunteers and volunteer executives from local and regional businesses. Those community contacts can lead to financial support from the businesses themselves. Do not neglect possible support from local social and private organizations such as Kiwanis, Rotary and Junior League. Do match your mission to their mission. For instance, the Junior League is for women (http://www.ajli.org/). I have found local Junior Leagues supportive of women’s issues such as domestic violence with both time and funds. These organizations will not normally fund for the long-term. They may be helpful to start up and for periodic special programs. Local contacts may help locate organizations of African Americans, Hispanics, Asians, women, veterans and others who may be able to provide small initial funding and volunteers – and board members. If there is a university or college in or near your community student groups, fraternities/sororities may be helpful not only for volunteers but also for one-time fund raising. Local, county/parish and state government are possible sources for grants. Federal funds can come through state agencies. State and county/parish governments may have competitive grants for services that government officials believe can best be provided by nonprofit organizations. Developing and maintaining contacts with government personnel and elected officials can produce funding. Such requests for proposals will appear in daily newspapers. Local religious organizations may share in your mission as a congregation or clergy leadership. They may lead not only to local funding but also funding from a regional or national body. Individual members may be able to open other local avenues through trust funds maintained by banks or law firms. Many states have a book published periodically by the Attorney General or Secretary of State listing all the foundations in the state with addresses and other contact information. You may find that book at the local library. It can be an excellent resource for planning purposes. Be creative in your search. If the organization’s mission involves health issues, try the pharmacies, major hospital corporations, national health care providers in your community. If hunger and food are the issues, look for grocery stores, bakers, and restaurants. For example, see the corporate grocery chain stores linked at http://www.foodforall.org/industry.html. In working with local community sources it is important that you spend the time developing a relationship of trust and communication. It is also vital that their mission match your mission. If that does not occur you waste your time and possibly alienate funding groups which could be helpful another time. There are about 60,000 small foundations in the US. One association, the Association of Small Foundation, has about 3,000 members. ASF members made over 153,700 grants for a total of $2.64 billion in their most recent fiscal year. These foundations have few if any staff. Most of them do not have a published web site. I suggest Googling each to see if they have added web sites. For a listing of the member foundations by state see - http://www.smallfoundations.org/about_asf/asf_members/members_by_state Growingly government and local, regional and national foundations and corporations are looking for collaboration. Teaming with one or more organizations may open the availability of funds that otherwise could not be secured. The development of trust and honesty between organizations are vital. That trust and honesty has to develop before grants become available. Working well with others can open possibilities for grants. My experience is that local funding groups will want a short, succinct proposal, 1-3 pages. They will want to know: * Who is this group? * Who are the board members? * What is the mission, the purpose of the group? * Is it incorporated and recognized by the IRS as a tax exempt organization? * What is the need to be addressed? * How much money is needed (with a budget)? * What are the goals for the use of the money? * How will the organization address the need? * What is the organization’s history meeting this or similar needs? * What activities will take place to address the need? * How will the organization evaluate the project that is funded? * How will the organization report back to the funding source in meeting the goals? * (Some local funders want to know how the organization will continue the project after their money is expended; and/or who is providing funding now and how much; and/or what the organization’s current annual budget is; some will ask for the most recent annual audit.) The Foundation Center reports:
-- http://foundationcenter.org/gainknowledge/research/pdf/corporatekeyfacts.pdf Here are several hints when you look at corporate web sites for possible funding. National or international corporations in your community may have a local giving process. Corporations, banks, utility companies, large manufacturers, large development companies, national chain stores do not feature their giving policies on the opening Home Page. You will have to be creative in your search of the site: * Look for the “Site Map” or corporate information; click on it. * Look for the “FAQs”; click on it. * Look for the “About Us”; click on it. * Search for words such as or similar to “community”, “foundation”, “charity” or “corporate giving” to lead you to potential funding. * You may have to look under the “History” section for clues to giving polices. * You may have to look at the “Corporate Structure” or “Corporate Officers” sections for links to giving. * You may have to look under “Press releases” or “Press coverage” or “Award”’ to find what you are looking for. Here is a statement from the “History” section of a bank in MA:
Getting your organization on the bank’s list takes a lot of work. But there is a creative idea from one local funding source. http://www.florencesavings.com/index.php?option=content&task=view&id=27&Itemid=50 Some communities have developed local giving circles. Giving circles involve developing a group of people who meet periodically for the purpose of deciding as a group what charities they will together contribute to.
For material a describing giving circles, see http://www.givingforum.org/givingcircles/index.html and http://www.idealist.org/if/i/en/faq/1060-207/332-78 Here is material from a giving circle in Minnesota –
Giving circles vary in structure, size and charitable focus. Some giving circles are very informal, nothing more than a group of friends with a bank account who meet in each others' homes to discuss and decide on where their funds will go. Other giving circles have hundreds of members and governing boards, and may use a community foundation to manage the financial aspects of their giving. -- http://www.minnesotagiving.org/options/circle.htm When you have identified a source for funding, follow the instructions listed for applications. Funders are serious about deadlines and what should be in an application. Funders are not sitting there with available money for you. You will compete for it. How should you look at foundations and corporate offerings? The views of one of the most successful people in philanthropy are instructional. Entering his thirteenth and final year as president of the Robert Wood Johnson Foundation, Dr. Steven A. Schroeder decided to set down what he had learned about the field of philanthropy during his tenure. The resulting essay entitled Reflections: Looking Back at Lessons Learned offers seven lessons for grantmakers (and nonprofit leaders) to consider:
From an article no longer available on the internet. Finally, you have to seek opportunities for partnering with other nonprofit groups in your area that share your organization’s mission and interest. This is no easy matter. It requires trust and communication before even talking about partnering. However, partnering is growingly critical to many sources of funds locally, in the state and nationally. Funding sources are asking for a variety of levels of partnering including joint-proposals and clear, meaningful joint projects, not simply letters of reference and referrals. There are no “Lone Rangers” in the nonprofit world when funding is discussed. Funders want to know if your organization “plays well with others”. My personal Mantra about funding is * Action precedes money * Planning precedes action I wish you every success in fulfilling the mission of your organization. Additional Resources The Foundation Center Cooperating Library Collections for Grants http://fdncenter.org/collections/ The 10 Most Common Reasons Grants are Declined http://www.lib.msu.edu/harris23/grants/ten.htm 15 Point Plan For Standard Grant Funding Proposal http://www.npguides.org/guide/index.html The 10 Tips for Grantwriting http://www.lib.msu.edu/harris23/grants/zim41011.htm Grant Writing Tools Web Sites http://www.idealist.org/npofaq/19/84.html U.S. Federal Grants Web Site http://www.idealist.org/19/63.html The Best E-Newsletters for Grants and Nonprofit Leaders http://www.idealist.org/npofaq/19/62.html Tony Poderis’ Fund-Raising Forum Library http://www.raise-funds.com/ The author is an attorney in New Jersey. The purpose of this article is not to provide legal advice to anyone in any state or country. The material contained in this article is for information purposes only. End of lawyer-speak. Almost © Copyright and all rights reserved by Donald A. Griesmann, Esq., 2005-2006. However, nonprofit organizations, community-based and faith-based organizations, educators and government agencies may reproduce this document without my permission. Just give me credit for it. For-profit persons and businesses are asked to request my permission to reproduce this article in writing in advance. I ask that any one intending to make money reproducing this article receive my permission in writing in advance and be prepared to include me in the process. Posted 9/20/06 -- dg |