Starting a New Nonprofit

Please allow me to crush your dreams...

In my last post, I asserted that not every new problem (or newly recognized problem) warrants a new nonprofit to address it.

I used the example of The Hurricane Sandy New Jersey Relief Fund, which gathered more than $32 million in four months, but had yet to give a dime to help victims of the hurricane. Why? Because the foundation's leader, New Jersey first lady Mary Pat Christie, was taking the time to set up a nonprofit organization carefully - which takes far more time than disaster victims can spare.

Meanwhile, another nonprofit addressing the EXACT same problem - Robin Hood Foundation distributed almost the entire $67 million raised from the 12-12-12 benefit. As an already-established nonprofit, they able to get resources where they were needed - quickly and efficiently.

Almost every week I talk to passionate, caring people who want to make the world a better place through a new nonprofit. The latest was a man who wanted to start a nonprofit organization that addressed breast cancer - he had just lost a dear friend to the disease and wanted to honor her.

What a wonderful man and a great friend! While I had no desire to crush his dreams, I encouraged him to think through if a new nonprofit was REALLY the best way to honor his friend.

Nonprofit start-ups should look to the business world when considering a new organization. When an entrepreneur is considering a new business, they do extensive and exhaustive research on these basic questions:

• Is there a market (a need) for this business? 
• What is the unique niche my business will serve? 
• Will there be customers?
• What am I selling? 
• What do I charge? 
• Where should I locate? 
• How will I market my business?
• What is the competition? 
• How will I get the money for this business?

These are the same questions new nonprofit start-ups need to ask.

It's actually MORE important for a nonprofit. Why? Well, if the entrepreneur fails to gauge the market, he will lose his own money and the business will be one of thousands (millions?) that fail each year because they just weren't needed. But if a nonprofit organization fails, they are losing donors' money - money that could have gone to more successful organizations. When the new nonprofit fails, people in need are likely to suffer from losing whatever benefit they were receiving from the nonprofit. It hurts everyone and makes the world a worse place.

If you have a dream that will make the world a better place, don't give up on it. Just be wise in addressing it. Ensure you know what you are doing before you begin using resources.

So, what about the man who wanted to address breast cancer? I don't know if he is still interested in that or not - I haven't heard back from him. I did, however, give him a list of questions to consider. I will share that list in my next blog post. Stay posted.

Nonprofit Start-Ups

Nonprofit Start-Ups

Not every new problem needs a new charity

A story in yesterday's USA Today caught my eye: The Hurricane Sandy New Jersey Relief Fund, which has gathered more than $32 million in the last four months, has yet to give a dollar to help hurricane victims.

Why? Because starting a new nonprofit or charitable foundation takes a lot of work! New Jersey first lady, Mary Pat Christie, makes no apologies for taking an appropriate amount of time setting up a new charity. According to their website, several grants are currently being awarded.

I completely agree with her that it's worth the time and effort to set up a charity correctly - get the infrastructure in place, develop appropriate policies and procedures, hire staff members, recruit the best board members and create viable strategies for addressing the problems you trying to solve. But I believe the Hurricane Sandy New Jersey Relief Fund has no need to exist: not because there aren't people who need the help but precisely BECAUSE there are people who need the help. They needed it four months ago.

Taking the time to carefully and thoughtfully create this charitable organization, while theoretically admirable, is, in my opinion, poor stewardship of the $32 million in donations received. Those who donated (I'm picturing the children who opened their piggy banks and families who redirected Christmas budgets) in the hope of helping people in dire need have not seen their gift spent as they intended.

Christie responds to critics by saying, "In three years, when I'm still distributing money at Hurricane Sandy Relief, ask me if we're doing enough." I would counter that, if she is still distributing money in three years, her relief effort has been a failure.

Which leads me (finally) to my point: not every new problem needs a new nonprofit. 

There. I said it.

At least two or three times a month, I have someone approach me about starting a new nonprofit organization. While there may be a need for a problem to be addressed, there is seldom a need to create a new organization to address it. Whatever problem they want to solve, there is usually a reputable organization already addressing it. They are probably doing it with more effectiveness and efficiency than a start-up organization could.

Case in point: the Robin Hood Foundation - which received the benefit of the 12-12-12 Concert for Sandy Relief. Instead of creating a whole new charity, the concert gave the funds to an existing organization. They have already distributed almost the entire $67 million raised.

They were able to do it quickly because they have 25 years of experience and 85 employees. It's a model that is infinitely more effective than creating a new nonprofit organization.

Now, I am not criticizing Mrs. Christie's efforts - in fact, I applaud them. It seems that she is doing an excellent job setting up a nonprofit organization and doing it well. In this case, I just don't think that's what donors REALLY wanted done with their money.

Are you thinking about creating a new nonprofit organization? If so, why? Is there really no other organization that can do what you are proposing? Could your time and energy be better spent helping them?

The Dreaded Logic Model

Confession time: the words "Logic Model" used to strike terror in my heart. When a funder required a logic model in a grant proposal, I would panic for a while, and then scramble to find an example ANYWHERE that I could emulate. Secretly, I resented having to create the model -- I didn't understand why they were needed.

When I saw a session on logic models being offered at the Sarkeys Foundation professional conference, I fought my way into the packed room (apparently, I wasn't the only one who didn't get it!) That morning, the lights went on and I have enjoyed doing logic models ever since. I get it!

A logic model is a simple diagram that connects the dots: starting with the needs of a particular population and pointed to the long-term impact your program eventually provides.

There isn't a "standard" or "best" logic model to use. However, some of my favorites include:

• A model to reduce underage drinking: created by the University of Wisconsin Cooperative Extension;
• A model for a self-directed learning program, created by the Harman Foundation;
• A model from the Pell Institute to improve health outcomes;
• Finally, here is a 71-page pdf guide from the W.K. Kellogg Foundation about logic models.

REQUIRED ELEMENTS:

The examples above have several things in common. I would say these are REQUIRED for a logic model:

INPUTS = The resources your organization is putting toward this effort. It may be staff time, volunteer time, facilities, money, vehicles, supplies, etc.

ACTIVITIES = Precisely what you are doing with those inputs. Offering classes, healthcare, financial assistance, education, art.

OUTPUTS = The immediate and direct result of your activities. Number of dental procedures, number of meetings held and average attendance, participation rates, hours of service, etc. You don't make any assertions about the success of these outputs at this point.

OUTCOMES = Specific changes for individuals because of the output. Such as greater understanding of victim's rights, acknowledgement that driving while texting is dangerous, improved reading comprehension, etc. Many nonprofits stop after listing their outputs - they never offer any evidence that their activities make a difference!

IMPACT = How you will make the world a better place in the long-term. Describe changes to a population, to a community or to a system. You may or may not be able to track this information at your program level - if you can't find empirical (official) data to back up your statements, then they need to be logical to the reader. For instance, if you have a literacy program and say an impact of the program is increased income, you need to explain how you know that will happen (research by other organizations).

 

OPTIONAL ELEMENTS:

When I design a logic model, I like to include a few other elements that allow the logic model to truly stand on its own:

POPULATION:  A very short description of the population you are serving - demographics, psychographics, geographic and any other pertinent "graphic" information.

PROBLEM STATEMENT: Some kind of description of the issue you are addressing. "Overweight/Obesity rates in this population exceed 70% and lead to chronic disease and early death for at least 40% of those affected."

GOAL: A statement of your goal (hint: should be pretty similar to your impact statements).

ASSUMPTIONS: I use this section for any other information I believe will strengthen the model. For instance, "XYZ Foundation is a trusted provider of health care for this population" or "An evidence-based model of behavior change has been shown to have the highest impact on this type of population."

Communicating Outcomes

"We give a hot meal to 150 people every day."
"Last year, we provided 4,983 hours of life skills training."
"More than 1,000 people attended our seven art shows last year."
"We provide free immunizations for 300 children in Ghana every month."

If your outcome statements read something like these, funders are likely to think..."So what?"

Why? Because these aren't outcomes. They are just activities. Most of my clients have used "outcome statements" like these for years and then wondered why funders don't agree with how important their work is.

Truth is: their work is important - vital, in fact. But they are working so hard every day that they begin to believe these activities are actually why they exist. It's time to dig deeper.


Quite simply, outcome statements aren't a description of your activities - they are what happens as the RESULT of your activities. Undoubtedly, that can be much harder to measure but having data that shows how you make the world a better place is too important to blow off.

How do you find your most powerful outcome measures? It depends on a multitude of factors such as your goals, your audience, your activities. But here is a thought process that may help -- let's use the fourth statement above as a starting point.  Disclaimer: I am making up statistics just for demonstration purposes. Please don't use them!

"We provide free immunizations for 300 children in Ghana every month."
WHY?
"So they won't contract preventable diseases like tuberculosis, which killed 1.5 million people worldwide last year."
WHY DO YOU NEED TO DO THIS INSTEAD OF SOMEONE ELSE?
"The children we immunize live in remote areas without viable access to healthcare. If we did not take the vaccines to them, they would not receive them."
HOW DO YOU KNOW THAT?
"The parents who bring their children to the clinic tell us this, as does a formal research project conducted by the World Health Organization (W.H.O.) in 2011."
IF YOU DIDN'T DO THIS, WHAT WOULD HAPPEN?
"The area in which we work has a child population of about 40,000. An estimated 10% (4,000) of children not immunized would contract a preventable disease. Research shows that half of them (2,000) would die." 
HOW DOES THIS IMPACT PEOPLE?
"When children are ill, they are unable to help the family gather water and food, care for animals, etc. Taking an ill child to a clinic can take up to three days - during which time the family is unable to earn a living. This impacts the entire family, increasing chances of starvation and the likelihood of developing additional health problems. According to research by the W.H.O., families with healthy children have twice as much access to clean water and nutritious food and, on average, have 35% more resources (water, food, income).

WOW! That's a lot more impact than just giving 300 shots a month!

So...how should you write these outcome statements? I like to use a logic model to achieve those. I will blog about this process next time - so stay tuned!

How Foundations Work

How Foundations Work

Book review: Winning Foundation Grants by M. Teitel

I just finished reading a good book by Martin Teitel called "Winning Foundation Grants: A Foundation CEO Reveals The Secrets You Need to Know." If you are an experienced grant seeker, this is a valuable book. If you are brand new to grant seeking, you may not be able to follow along quite as well but will still benefit from the tips.

I don't want to violate his copyright or keep you from reading the book yourself but I did learn a few things I didn't know (even after years of writing grants). Some of these things are common sense but I had just never seriously reflected on them. Some gems include:

• Remember that foundation boards usually have at least one banker/accountant on them. During the discussion of your proposal, you can be sure they will flip to your budget and start checking your math. If you have an error, they will find it and it will be a GREAT excuse not to fund your organization.
• In your proposal, spend less time talking about the problem and more time talking about your solution. Don't drown the reader in "the abyss of negativity and despair."
• Don't ever call a potential funder at home (I know, I can't imagine that anyone would. But I guess they do.)
• If you plan to make an end-run around the foundation staff and talk directly to a board member you know, you will likely offend the staff member whose help you need in the future.

These are just a few of the hundreds of tips - some of them quite funny - that Teitel shares. 

The Long Road to Yes: Rejection is Part of the Journey

Fact: Babe Ruth had a 66% fail rate at bat. 

Yes, he failed most of the time. So...why isn't he considered a failure?

When he got a hit, there was a 25% chance of its being a homeroom and a 77% chance that a run would be batted in. That's why he is a legend.

Most grant seekers understand that a .342 batting average in baseball is pretty darn fantastic. But we forget to hold our own work to a similar standard.

Here's the hard truth: most grant proposals will be rejected - especially first-time submissions.

But Babe Ruth didn't walk away from the plate after the first strike - why should you?

Of course, it's still important to consider why the grant was rejected. When that dreaded, "We applaud your excellent and important work in our community, however..." letter comes, what should you do? Grieve a bit, of course. Eat chocolate. Say bad words. Cry, if that helps. Then move forward.

Here are some reasons, in my experience, why grants get rejected:

1. Wrong Funder - Most funders have a list of things they WON'T fund. If you ask for one of those, you will get rejected. Instead, you should find funders that have an expressed interest in funding a program like yours.
2. Poor Writing - a foundation manager once told me that 90% of the proposals they get are badly organized and don't communicate well. If your proposal confuses or bores its reader, it probably won't be funded.
3. No Relationship - you can't always develop a relationship with a funder but you should always try. They will be more open to your proposal if they already know you.
4. A Weak Program - it's hard to get funding for a program that isn't well organized, isn't reaching many people or isn't accomplishing its outcomes. Some programs duplicate other efforts in the community. You must ensure your programs are strong and fulfill a unique need. 
5. Not the Right Fit - I submitted (what I thought) was an outstanding application to a funder who had encouraged the proposal. Although they liked the proposal, the board decided (during their meeting) that they would focus giving on rural programs that year. Mine was urban. It happens.
6. A First Strike - Funders will often deny this but experience shows it's true: the first time you submit a proposal to a funder, it has a small chance of being funded (some say 1 in 6). The second time you submit to the funder, your chances increase tremendously. The third time, your chances are even higher. Unless you walked away after the first strike.
7. Not This Time - Sometimes your proposal is great, your relationship is great, your organization is doing everything right...but a funder just can't help this time around. 
8. Not Gonna Happen - If you've done everything else well and had three or more rejections from the same funder, it's probably time to move on. There will be other ballgames.

 For more information on grant seeking, visit my website at www.sharpshootercommunications.com.

Grant Seeking on Contingency - Why Not?

      At least once a month, I have a conversation that starts like this:
      "We are a small/poor/start-up nonprofit and we just don't have the funds to pay for grant seeking - but we really, really need grants! Can you write grants for us and we will pay you a percentage of what gets funded?"
     Attorneys often work on contingency. Salespeople usually work on commission. Why can't that same model apply to grant seekers?
     There are several good reasons why contingency grant seeking isn't a good idea:

• It is unethical. The Association of Fundraising Professionals (AFP), the American Grant Writers Association and other professional organizations require members agree to a set of ethics. Here's a direct quote from the AFP ethical standards:  "Members shall not accept compensation or enter into a contract that is based on a percentage of contributions; nor shall members accept finder’s fees or contingent fees." Other organizations have similar verbiage. A grant seeker willing to work outside the ethics of his/her professional is either IGNORANT of the ethical standards or willing to IGNORE them.  See more at  http://www.grantprofessionals.org/about/ethics.
• Funders won't pay the fees. If you present an honest budget in your grant proposal, you must list the "commission" to the grant writer. This will automatically disqualify you for many grants (especially government) and make your proposal less appealing to other funders. Funders want their funds to feed the hungry, house the homeless, save the planet, etc. They don't want to pay a grant writer - they consider that to be an administrative or general operating expense.
• It's not fair to you. Let's say I agree to seek grants for your organization for a 3% contingency fee. What will happen? If I spend 40 hours working on a million dollar federal grant, do you really want to pay me $30,000 for that work?
• It's not a good motivator. If my income were solely derived from successful grants, I would be tempted to do the following: Spend half my time seeking those million dollar grants and half my time seeking smaller grants that are more likely to be approved. While this would be a great strategy for my wallet, this is not a good mix of grantors for your organization. You need a variety of funding streams - large, medium and small grants. If I am only focused on the "big money" or the "easy money," you are not well served. 

     Despite all the ethical and logical reasons this is not a good idea, I often hear that there are grant seekers willing to work on a commission. My advice: if you meet one of them, run the other direction. Stick with a grant seeker who understands his/her profession and willing to work in an ethical manner.