7 Keys to Leadership Communication: The Art of Knowing When To Stop Talking

For a long time I have believed that there is an art in knowing when to stop talking. Who among us hasn’t had the experience of thinking: If I had just stopped talking about 2 or 3 sentences ago?? As a leader, this is especially true when we are asked for a direction, an explanation or a question (especially if it is a yes or no question). There really is no need to begin our response with The Book of Genesis, right?

Whether we are leading a staff, an army of volunteers, communicating with funding sources or a Board of Directors, the following are some of my essential observations about good leadership communication:

• Be Clear and Direct    Hence, The Art of Knowing When To Stop Talking. Be clear about the message and convey it as succinctly as possible. Say it in as simple language as possible and avoid grandiose language. Avoid “triangular” communication, which can lead to problems. For example, triangular communication is involved when the director needs to deliver a message to Mary but instead delivers it to Sam, who may or may not convey it to Mary the way it was intended. Like “whisper down the alley”, communication can become inaccurate or get off topic. Be sure that the intended recipient of a message receives it directly.

 

• Listen    A well-documented fact, successful and effective leaders listen. We cannot obtain information from people, departments or entire organizations if we do all of the talking all of the time. Skilled leaders know how to engage and facilitate others to do the talking in order that they may obtain the information they need. As Mike Myatt of Forbes says, Shut-up and listen!

 

• Have an Agenda    Think ahead a bit about the beginning, middle and end of the communication. It is best to say or write up front in the beginning what the message is about. People tend to remember the beginning and, of course, how something ended but the middle part is more easily forgotten. For these reasons, introduce the intended message right at the beginning, use a wrap-up or summarizing technique at the end and place less critical or salient points in the middle of a message.

 

• Always Be Respectful    A key part of being a leader, be as upbeat and positive as possible in all communications, especially when having to deliver an unfavorable message. This may not always be easy to do especially in the face of conflict or adversary but at the end of the day “burning bridges” and destructive relationships will not benefit anyone or further the mission.

 

• Non-Verbal Body Language   Be mindful of non-verbal body language. Our lips may be saying one thing but our bodies are saying another! When communicating a message, keep in mind things like sitting behind a desk (power and control), standing over someone (intimidation) and – worst of all – crossing the arms (non-receptive, closed). Sometimes non-verbal body language speaks louder than the words we use.

 

• The 5:1 Rule    Simply put, the 5:1 rule is that for every “constructive” message, there needs to be 5 positives. It is easier for leaders to praise rather than criticize: Although you need to gain speed in completing your daily reports, you are on time, dressed appropriately for the job, you are respectful to consumers, they look forward to seeing you and you have a great attitude!

 

• Technology   Gone are the days when we dictated letters and someone else typed them for us. Today, if we need a letter, we type it ourselves – and more likely, we email or text it. In the age of electronics, it behooves leaders to use their smart phones and iPads wisely. Add Facebook and Twitter into the mix and we have a virtual jungle of communication with staff, Board members, funding sources and volunteers. In addition, know the preferred method of communication of the audience. This may translate into the same message being broadcasted by several different methods (e.g., website, email, Facebook) if the demographics of the audience are diverse. While many of our older donors prefer to receive their newsletters and annual reports in printed copy, the Gen X crowd wants to be texted or tweeted. Know how to best communicate with the intended audience.

 

References:

Myatt, Mike (April 4, 2012). 10 Communication Secrets of Great Leaders. Forbes. Retrieved on August 4, 2014, from http://www.forbes.com/sites/mikemyatt/2012/04/04/10-communication-secrets-of-great-leaders/

Craemer, Mark (December 29, 2011). 10 Tips to Improve Workplace Communication. Seattle pi. Retrieved on August 4, 2014, from  http://blog.seattlepi.com/workplacewrangler/2011/12/29/10-tips-to-improve-workplace-communication/

Fiscal Sponsorship: An Overview

An overlooked concept in the world of non-profit organization financial management that does not appear to have hit its full stride yet is that of fiscal sponsorship. In a prolonged and challenging economic downturn, it may be a good time to look at it more closely. Prompted by the increase in the number of non-profit organizations seeking IRS tax exempt status (e.g., following the widespread devastation of Hurricanes Sandy and Katrina), fiscal sponsorship refers to the use of existing, established organizations to achieve similar or overlapping missions rather than forming new organizations. Essentially, a ‘fiscal sponsor’ is a non-profit, tax exempt entity that acts as a financial sponsor for a project, committee or another organization that may not yet have received its tax exempt status with the IRS. In recent years, fiscal sponsorship has become more widely known in areas of human services, environmental causes and artistic endeavors.

Perhaps ideal for start-up organizations or those that want to accomplish time-limited charitable projects, the fiscal sponsorship of a larger, established organization can provide often costly administrative “overhead” functions such as office space, payroll, employee benefits, fundraising, publicity, legal counsel and training assistance. Some project developers may simply want to test their ideas out in their fields of interest before taking on the task of applying for tax exempt status with the IRS. There are many kinds of sponsorships; however, chief among them is grant-seeking sponsorship largely because foundations and government agencies [always] fund organizations and disallow making grants to individuals. In effect, the fiscal sponsor organization may receive grants and donations and even engage in other fundraising activities on behalf of the project, manage those funds according to their intended uses as well as document the progress of the project. Choosing a fiscal sponsor largely depends on the nature or purpose of the project or committee and how consistent it may be with the mission of the larger organization. In addition, choosing a fiscal sponsor also needs to take into account the reputation of the larger organization in the community, its own financial health as well as its relationship with its funding sources. In other words, how attractive will the proposed sponsor organization be to potential funding sources for the project in subsequent grant requests? Aside from the local community, many national organizations have sprung up expressly for the purpose of providing fiscal sponsorships; for example, Tides in San Francisco, and many directories are available online. Moreover, the opportunities for a social cause or project to attract more attention and increased funding is somewhat greater in a fiscal sponsorship through the “cross promotional” benefits of an association with the larger, established organization. According to Gregory Colvin – a leading tax law expert in fiscal sponsorship – additional models of sponsorship include direct project sponsorship, independent contractor support, group exemption and technical assistance. For more detailed information about each of these models of fiscal sponsorship, please see Mr. Colvin’s book, Fiscal Sponsorship: Six Ways To Do It Right (Study Center Press, 2006).

Like many management decisions, entering into a fiscal sponsorship relationship is not a casual decision and does not come without some potential pitfalls for both the non-profit and the proposed project. A fiscal sponsorship arrangement needs to be formalized in a written contractual agreement or memorandum of understanding between both parties, typically specifying who will be responsible to do what and when. A memorandum of understanding – which, it is recommended, be reviewed by a tax attorney first –  clearly addresses the terms and conditions of the project management, including the scope of the project, timeframes and deadlines, employment issues if necessary and the authority of the project, to name a few. Perhaps one of the biggest concerns for an established non-profit organization is that it will assume all of the legal liabilities, tax requirements and regulatory compliance of the project in a fiscal sponsorship agreement. Conversely, on the side of the project or committee seeking fiscal sponsorship, there may be a perceived lack of independence in the project when it is administratively managed by others. Additionally, that established non-profit organization is not going to give away their administrative time for nothing. The sponsoring organization can and most likely will charge administrative fees, which in itself need not be a bust for the project because the administration fees can be built directly and transparently into the budgets of grant requests.

Clearly, the choice of a social cause or project to seek fiscal sponsorship from a larger, established non-profit organization is a highly individualized and case-specific one. While some organizations and projects may view this kind of relationship as cumbersome or intrusive, others may thrive on it or choose to continue indefinitely in a sponsorship mode. Still other projects may receive enough valuable insight and guidance to launch their own non-profit organizations.

References:

Colvin, G. (January, 2013). Brushes With the Law. Fiscal Sponsorship.com. Retrieved on February 5, 2014, from http://fiscalsponsorship.com/.

Colvin, Gregory (2006). Fiscal Sponsorship: Six Ways To Do It Right. San Francisco: Study Center Press.

Guide to Fiscal Sponsorship. Foundation Center.org. Retrieved on February 5, 2014, from http://foundationcenter.org/getstarted/tutorials/fiscal/conclusion.html.

Fiscal Sponsors. Council of Nonprofits.org. Retrieved on February 5, 2014, from http://www.councilofnonprofits.org/resources/resources-topic/fundraising/fiscal-sponsors.

Give Thanks

With the universal season of giving upon us, it is the perfect time for the non-profit community to give appropriate thanks to their donors and volunteers. These are some of the strategies that I have learned about acknowledging donors and volunteers over the years:

• Report the news! By and large, donors appreciate hearing news about organizations that they support. Or, at the very least, they like to hear about the activities of a non-profit; for example, our child care program went on a field trip to a museum last week. More important, donors like to understand the results or outcomes of their contributions; for example, the organization served 1,500 homeless individuals with hot meals last month.

 

• Be timely! There is nothing worse than sending the acknowledgement of a gift six months later – and after the donor may also have forgotten it! This can only serve to remind the donor not to donate again. Prompt and efficient responses to all gifts is a simple way to increase the likelihood of long associations with donors.

 

• Treat all gifts with gratitude and respect – no matter the size of the gift. Whether a donor gives $5, $500 or $50,000, all gifts need to be acknowledged appropriately. According to Kivi Leroux Miller of the Nonprofit Marketing Guide, 65 percent of first time donors do not make a second gift. Ms. Miller explains that donors want a simple, prompt and a meaningful thank you letter with some communication about how the donation was used.

 

• Volunteers are donors, too! In many non-profit organizations, volunteers often perform critical and invaluable functions. At an average national “value” of $22.14 per hour, a volunteer who frequently gives freely of their time, talent and energy can quickly add up to the equivalent of a salary that an organization is not paying. Volunteers need to be thanked and acknowledged at every opportunity we have.

 

• Hand-write notes. Despite the era of technological sophistication, people still like to receive hand-written notes! Rather than the officious form letter, hand-written note cards demonstrate personalization and the value of a relationship with a donor or volunteer. I have even hand-written the first names of donors and wrote personal notes in the margins of the officious form letter! This is especially true for donors or volunteers with whom we have personal and social relationships.

 

• Put their names in writing. In general, people also like to see their names in writing, which can also help them feel that their contribution is valued by the organization. Whether it is in a printed newsletter, on the organization’s website and/or on lists of particular levels of giving, donors do tend to check that their names have been listed in writing! However, discretion should be exercised in “publicly” listing the amount of a donation. That is, public acknowledgement is typically understood at the time of soliciting the gift – e.g., the ‘president’s circle’ of $10,000 and above donations will be included in the annual report. Of course, if a donation is designated as ‘anonymous’ upon receipt, the donor does not want to be publicly acknowledged and that needs to be respected.

• Plan a special event. Finally, another method of acknowledging volunteers and donors is to hold a special event around them or a holiday in order to thank and recognize them. Popular in volunteer management, some organizations use the concept of a volunteer luncheon; for example, to thank and recognize the people who help them every day. The same idea can be utilized with donors (and potential donors) and can include a tour of the organization or its facilities. A special event for this purpose need not be elaborate and can be as simple as a meet and greet, light refreshments or a social mixer. While having a breakfast or lunch does have costs associated with it, many businesses in the community are willing to make in-kind donations to a non-profit in order to help them thank their volunteers (and it’s good advertisement for their businesses!).

 Happy Thanksgiving!

References

Nonprofit Marketing Guide by Kivi Leroux Miller, “Nine Clever Ways to Thank Your Donors”, January 18, 2012. Retrieved from:

http://www.nonprofitmarketingguide.com/resources/fundraising/nine-clever-ways-to-thank-your-donors/your-donors/

Independent Sector, Independent Sector’s Value of Volunteer Time, “National Value of Volunteer Time”, Summer 2013. Retrieved from:

http://independentsector.org/volunteer_time#sthash.GuLh713d.dpbs

So You Want To Start A Nonprofit?

The proliferation of non-profit organizations across the United States has been well documented for years. According to the National Center for Charitable Statistics at the Urban Institute, in the ten-year period from 1999 to 2009, the U.S. saw a 31.5 percent increase in the number of registered 501(c)3 public charities, totaling more than 1.5 million nationwide (2010). That percentage increase excludes foreign and government organizations. In my state of Pennsylvania alone, Non-Profit Stats reports a whopping 72,725 registered charitable organizations (2013).

The numbers are even more significant today because many non-profit organizations in communities throughout the country are often trying to carve out their existence in fierce competition with one another for stagnant pools of local monies as well as they are facing reduced if not eliminated private and public funding in a poor economy.

My recent introduction to a very worthwhile start-up non-profit in the Lehigh Valley, PA community reminded me of the rigors of starting a new non-profit organization. The following are just a few highlights of the many, many “hoops” through which a fledgling non-profit is required to jump:

• Determine the need and sustainability. Before hanging a sign on the door and printing business cards, determine the need for a non-profit serving the proposed mission or purpose in the community. Are there other organizations already established in the local community that serve the same purpose, goals, population or issues? If so, there may not be a strong commitment to a “duplicate” organization starting up. More important, determine the sustainability of the proposed non-profit among the community. Who will fund it? Is there enough interest and money in the community to support the organization on an ongoing basis? Research corporate and government funding opportunities that are good matches with the mission of the organization and visit with local, private foundations in order to introduce the idea of a start-up non-profit, gauge their interest, and get to know them.

• Determine the type of tax exempt status needed. Perhaps the most widely known, the 501(c)3 non-profit is an IRS tax code that permits certain tax exemptions to charitable, educational, scientific, religious, etc. organizations. Other tax exempt codes have been established for civic leagues, child care and social welfare organizations; for example, that have varying disclosure requirements and contribution allowances. Currently, I count 34 different IRS tax exempt codes!

• Establish by-laws. The by-laws of a non-profit define how the organization will function and conduct its business in the community and typically address issues like board governance, terms of service and lines of authority within the organization. Consultation with legal counsel – or at least review of the by-laws – is highly recommended at this stage of the process.

• Select a board of directors. What does this particular non-profit need in terms of the community representation on the board of directors? In general, organizations usually need financial, legal and human resource experience. Additionally, people tend to gravitate to what they know best so it is typical; for example, to see organizations with an educational purpose with teachers and school district administrators on the board. Make it a goal to diversify the board of directors as much as possible. While there is obvious value in keeping similar people together, diversification in the board increases the richness of experience and expertise that a board of directors can provide to a non-profit.

• Develop strategic and fundraising goals. The management and board of start-up non-profit organizations are strongly encouraged to engage in some level of strategic and fundraising planning. How will the organization be funded? Where do management and board members expect the organization to be financially and programmatically in a year? In three years? In five years? A strategic plan is even more important to start-up non-profits especially because in the absence of a proven, successful track record of results it is one of the key items to be shared with potential funders to demonstrate that the organization has been formed with forethought, expertise and a business plan.

• Request tax exempt status from the IRS. This is really the “big kahuna” in forming a non-profit organization. An organization is not considered not-for-profit until the IRS deems it so with a “Letter of Determination” (see bullet above about types of tax exemption). Without it, an organization may not legitimately solicit funds as a non-profit and donors can not make tax deductible contributions.

• File state articles of incorporation. Typically granted from a Department of State, incorporation refers to the absorption of state law under the specific protections of the U.S. Constitution.  That is, the U.S. Constitution shall override all state constitutions and state laws. For organizations that plan to incorporate, this is a key step that may occur in conjunction with filing for tax exempt status with the IRS.

• Establish record keeping and financial accounting systems. Establishing board approved, financial and internal management procedures and protocols early in the game; for example, financial statements and reports as well as board meeting minutes, is advisable. Who will be responsible for maintaining records and financial accounting?

• Obtain liability insurance. Like any other business, non-profit organizations are susceptible to legal risks and start-up organizations are advised to obtain liability insurances. Again, consultation with an attorney familiar with non-profit organizations can be very valuable in selecting Directors’ and Officers’ liability insurance as well as general professional liability coverage.

The bulleted items above are only some of the issues that need to be addressed by a start-up non-profit organization. Depending on the organization, additional items that may need to be addressed at start-up include: personnel policies, unemployment compensation, withholding taxes for the IRS, filing for state sales tax exemption status, and registering with state Bureaus of Charitable Organizations.

References

• The National Center for Charitable Statistics at The Urban Institute; Quick Facts About Nonprofits, Custom Report Builder (2013). Retrieved from:

http://www.nccs.urban.org/

•  Nonprofit Stats; Distribution of Charities in the U.S. (2013). Retrieved from:

http://nonprofitstats.com/

• Pennsylvania Association of Nonprofit Organizations (PANO); Nonprofit Resources, Forming a Nonprofit (2013). Retrieved from:

http://www.pano.org/Nonprofit-Resources/

lead-er-ship: (n.) a person who guides or directs a group

I have always said there is more to being the boss than being bossy. A lot more. I think there is a tendency for us to confuse – and it is easy to do – the ideology of leadership with the act of supervision. Clearly, many situations and tasks need supervision; however, leadership is a bigger, broader picture than telling someone when and how to do something. Consequently, there are great supervisors who would not necessarily make great leaders and vice versa. Leadership comes in different sizes, shapes, colors, styles and gender – and at times from the most unlikely of places. Leadership styles aside – and there is an abundance of self-surveys available on-line and in any bookstore to help us figure out which particular brand each of us subscribes to – the following are several ideas for consideration about leadership:

• Leaders have passion and vision. A leader not only has passion and dedication to the mission of the organization but also a vision for the organization beyond what is happening today or this week. He or she has a vision of how the organization’s mission will be played out in the next year as well as five years from now and uses many resources to guide the organization toward that vision.

• Leaders focus on relationships. Leaders appear to know everyone because they understand the inherent value of relationships – both within the organization and in the community at-large. Good leaders do not readily “burn bridges” and they are skilled at networking and maintaining relationships even in the face of adversary.

• Leaders listen. Leaders also understand the art of listening to the other people around them (community stakeholders, staff, board members, partner organizations). Rather than frequently arguing their own agenda, leaders are more intent on listening to others in order to determine from whom their strongest support is coming in order to guide the organization toward the vision.

• Leaders maintain poise and grace under pressure. A leader maintains positive energy even during trying circumstances. Contrary to the boss who seems to think that yelling, tantrums and blame are the only ways in which to get something done, a leader maintains personal dignity as well as that of the organization and rarely displays a disorderly response. While ‘Fear Factor’ may make good television drama, it certainly has no place or benefit in non-profit management. Perpetual negative responses (or interactions) tend to diminish others’ confidence in one’s ability to lead.

• Leadership develops leadership. Conversely, a leader bears the self-confidence in his or her own leadership such that other staff in the organization are encouraged to develop professionally. Leaders are comfortable in their roles. He or she not only supports and welcomes professional development but is also wise to consider his or her own succession at some point.

• Leaders accept change. All of us have most likely experienced difficulty with change at some point in our lives. On the other hand, change is necessary and good. Leaders not only accept change, they often flourish with it, making change work for them and their organizations. Moreover, leaders effect change in order to guide the organization toward the vision for it.

• Leaders lead. Plain and simple: Supervisors supervise and leaders lead. Finally, a leader who transgresses into others’ roles within the organization is not likely to be as effective and efficient in facilitating the bigger picture development of the organization as one who clearly communicates  vision and goals for the organization. Leaders understand the hierarchy of the organization and how best to navigate it.

To Facebook Or Not To Facebook, That Is The Question: The Role of Social Media in Fundraising

Yes, I know that I am using Facebook as a verb in the title. It’s at that level. The social medias have made an often incomprehensible imprint on our culture as a people such that it is difficult to remember what we did before their genesis. According to Huffington Post Tech blogger, Brian Honigman, Facebook’s active monthly users now total nearly 850 million people as well as 250 million photos are uploaded everyday (source: Jeff Bullas). That’s a lot of people with a lot of pictures! One more fun fact: As of 2012, 210,000 years of music have been played on Facebook (source: Gizmodo). Now that is very compelling about its size and scope!

Along with the proliferation of social media sites on the world wide web (Facebook, Twitter, LinkedIn, Instagram, Pintrest, Google+, YouTube, etc.), so too have there been a plethora of writings, lectures and webinars (ad nauseam) on their fundraising uses by and potential impact on the non-profit community. In addition to the social media giants like Facebook and Twitter, the advent of sites like Google+ and YouTube have made it easier than ever to promote non-profit organizations with photos and video of events and activities. Social media is a wonderful invention and can be an excellent accompaniment to a non-profit organization’s marketing or development plan but it plays a very prescribed role in the activity of fundraising.

A discussion about the role of social media in non-profits needs to be prefaced by a key concept. A non-profit organization’s website is the foundation of its on-line presence. In other words, the organization’s website is like its on-line “home-base” of operation, including a place at which visitors and supporters are able to make secure on-line donations. The website serves as a reflection of the organization’s mission in the community and communicates it’s values and philosophies to all who visit it. Sounds beautiful, right? But perhaps the single biggest problem for organizations and their websites is maintaining them. The organization’s website needs to be as current and timely as possible at all times. There is nothing worse than going to a non-profit’s website, clicking on the ‘News’ tab and finding that the latest news is from 2010. Thud! Did nothing happen since then? When potential donors – both seasoned and newcomers – feel that they are not being actively engaged in the current events of the organization by visiting the website, they may move on to other organizations that do. Typically, the management of a non-profit’s website may be a task of the development director or department; however, smaller organizations that do not have the luxury of a development staff are encouraged to select a point person within the organization to perform maintenance and update tasks on the web site on a routine basis.

The value in non-profits utilizing the power of social media to raise funds is not in all the millions they will rake in simply from being on Facebook or Twitter. Rather, the value of social media in non-profit is to bring donors to the organization’s website. That is where the real “business” of the organization happens and why it is so important that it is functional and current. The real “job” of social media like Facebook or Twitter in a non-profit organization is to generate interest in the organization and the mission, prompting the potential donor to think, “I’d really like to get involved there” or “I’d like to contribute” and subsequently leading them back to the website where they can make a contribution or volunteer. Social media can be used to inform or teach lay visitors about the mission of the organization, often in creative ways. I saw one organization place a quiz about homelessness on their Facebook page in order that visitors can test their own knowledge of the social problem. Social media can be used to highlight the organization’s partnerships with businesses and other organizations in addition to thanking them publicly. Moreover, the social medias are fun and they can and should be used to create excitement or anticipation about the organization’s activities or events – and again, take donors back to the website when they have “bought” the idea on Facebook or Twitter. If an organization holds an annual fundraising golf tournament; for example, Facebook and Twitter are very good social media to not only raise awareness of the event but also to increase the excitement and anticipation for it with strategically timed posts and tweets – and with the added result of possibly bringing more people on board!

Similar to the organization’s website, a non-profit’s social media sites need to be just as well maintained. Once a social media page or account has been established, it does a non-profit little good if it just lies out there in cyberspace. It looks like nothing happens at the organization and in some ways that can be fatal. I have followed several local non-profits on Twitter; for example, but quite honestly, I’ve lost interest in them because they never put any tweets out. They are not telling us anything about their organizations and thereby letting their presence be known by not communicating often enough. Finally, a non-profit organization’s social media is likely going to be as effective as the organization itself. The bottom line is that there needs to be substance behind the posts or tweets. In other words, when an organization is merely taking up (cyber) space just for the sake of being there and there is no real “meat” in the posts or tweets, it tends to come through. If a non-profit organization is struggling – for whatever reasons – it may be best to focus all of the organization’s resources and energy on resolving those issues before moving forward with a social media marketing plan.

Reference

The Huffington Post; Tech Blog by Brian Honigman; “100 Fascinating Social Media Statistics and Figures From 2012”, November 29, 2012. Retrieved from:

http://www.huffingtonpost.com/brian-honigman/100-fascinating-social-me_b_2185281.html

An Overview: Planned Giving

There is a phrase in fundraising circles that says it could more aptly be called “friend-raising” and that could not be more true than in the case of planned giving. At a time when any source of non-profit revenue – grants, contracted services or even entrepreneurship – can be tenuous at best, the concept of planned giving makes even more sense. Most development professionals would concur, the most stable and steadfast source of revenue in a non-profit organization is not the corporations, businesses or foundations – it is individual donors.

In today’s economy it behooves charitable non-profit organizations – whether they are small and local or large and nationwide – to develop some kind of planned giving program. According to David C. Hall of the University of Arkansas in an article published in The Non-Profit Times (May, 2013), if you are not asking your donors for planned gifts, someone else is. The literature in the field abounds with ideas about converting annual fund donors into planned givers. In another article, Andrea Wasserman, president of Social Profit Ventures in Washington D.C., makes the analogy of a “donor funnel”, along which a donor moves from being an annual giver to making planned gifts. According to Wasserman, one of our goals in development is to bring donors into the organization at the point of annual giving and move them along the funnel toward major gifts. Do not allow donors to get stuck at the annual giving level; identify and cultivate donors for larger and planned gifts (The Non-Profit Times, August 20, 2013). Moreover, according to Mr. Hall, organizations that utilize planned giving strategies can earn 50 to 100 percent more than those who do not and a typical planned gift is 200 to 300 times the gift of a donor’s largest annual gift. Additionally, donors who make gifts in their wills typically increase their annual support (The Non-Profit Times, May 29, 2013).

Moving beyond the traditional bequeathed gift provided by a donor’s will, there are now many ways in which a potential donor can make a planned gift to an organization that a creative financial advisor can discuss. By definition, planned gifts typically are not part of the donor’s discretionary income and are major gifts made possible by estate and tax planning strategies to maximize their gifts to charitable organizations. For example, potential donors can use appreciated life insurance, a retirement plan, real estate, stock – and even art work to make major gifts. According to Planned Giving.Com, the three types of planned gifts include: 1) gifts that use appreciated assets in lieu of cash, 2) gifts that return income or other financial benefits to the donor such as Charitable Gift Annuities, and 3) gifts payable upon the donors death. According to Mr. Hall, many potential donors are willing if not eager to make a planned gift but they simply do not know how (The Non-Profit Times, May 29, 2013).

As well, planned giving programs require just what its name says – planning. A bit more involved than organizing a Saturday morning bake sale outside of the WalMart, planned giving requires the strategic cultivation of long-term relationships with donors. One might start by looking at their donor and mail lists and identifying who gives regularly or every time a request is made and who attends all of the events and activities of the organization. In other words, identify who  the organization’s most loyal followers are. These are the folks we need to work toward moving along the funnel. Usually, it is not the first-time $50 donation that we seek for planned giving. Also, planned giving programs demand appropriate stewardship, typically in the form of a committee that may include staff as well as the Board of Directors. Moreover, a planned giving program needs to be well represented by a Board of Directors, not only in their stewardship but by their participation in it as well. If a Board of Directors is not invested in the organization at that level, why should I be? Finally, Mr. Hall also suggests that communication with planned givers needs to be high and in an uncomplicated, objective manner. Keep the message coming, keep it simple and help donors to identify their interests (The Non-Profit Times, July 9, 2013). Major gift donors are an elite club of donors who like to feel that they are “in the loop” with the organization and have access to executives and directors. Development staff can help planned gift donors feel “included” in the organization by sending them timely progress updates, newsletters and handwritten notes when appropriate. When a donor makes a major gift through a planned giving program, many development professionals say that our work is just beginning as we strive to nurture those existing relationships and cultivate new ones. It really is about “friend-raising”.

References

•  The Non-Profit Times; Management Tips; “9 Things To Remember When Planning”, May 29, 2013. Retrieved from:  http://www.thenonprofittimes.com/management-tips/9-things-to-remember-when-planning/

• The Non-Profit Times; Management Tips; “3 Ps To Starting A Planned Giving Program”, July 9, 2013. Retrieved from:  http://www.thenonprofittimes.com/management-tips/3-ps-to-starting-a-planned- giving-program/

•  The Non-Profit Times; News and Articles; “Annual Giving Takes  Funnel Approach”, August 20, 2013. Retrieved from: http://www.thenonprofittimes.com/news-articles/annual-giving-takes-a-funnel-approach/     

• PlannedGiving.Com; Resources: What is Planned Giving? Retrieved from: http://www.plannedgiving.com/

The Diary of A Mad Grant Writer

Oh, the joys of grant writing! Let’s count them! The endless deadlines, research, competition, budgeting, and the near obsession with details! Not for the faint of heart, grant writing is often a tedious and repetitive process – although, very much a mainstay in the non-profit community.

Seriously, I learned a lot about non-profit management in general just by writing and developing grant proposals for several years. I have a few insights based on my experiences that I want to share here:

•  Mission first

Before doing anything else, ensure that the organization’s mission is aligned with the activities that the foundation funds. Read the foundation’s guidelines for giving thoroughly. For example, do not submit a grant request for a children’s after-school program to a foundation that funds wild land conservancy. The example is exaggerated and the point may seem fairly simple and obvious but it is remarkable how many organizations attempt to “stretch” their mission statements to include things that they do not. It’s called chasing money and it rarely works out in the end and it puts the organization’s credibility and integrity at risk.

•    Follow the instructions to the letter

Similarly, read the foundation’s instructions for submitting proposals well – and follow them exactly. Nothing will dissuade a potential group of funders from granting the organization monies than receiving a proposal that is not in the form that they asked it to be. When the instructions say that written proposals should not exceed more than three typed pages using a font size no smaller than 10 point, accept that as a hard and fast rule. Other common instructions include: submit an original and 10 copies of the proposal, do not send additional attachment materials other than those requested, do not send photographs because they cannot be returned, and do not send proposals in fancy covers, binders, etc. As an aside, if covers or folders are typically used as well as different print colors in grant proposals, stick with classic and subdued colors like black, grey, navy blue, etc. This is not the place for electric blue and neon purple!

•    Be compelling

In addition to using good, concise writing style, correct spelling, grammar, and punctuation (which could be a blog post by themselves!) to tell the story of the organization or project, grant requests need to be compelling. When I first began writing grants and went to lectures and training on the subject, the presenters always said in their most dramatic voices, “You must have compelling grants”! That is, the grant request needs to compel the reader to do something in response to it, like fund the organization or project that it proposes. Be compelling in a grant request by including researched local statistics, possible consequences of not funding the proposal and benefits to the whole community. In keeping with the example of a children’s after-school program, cite the number or percentage of local children affected by the absence of this program, the lack of supervision for the children after school, incidence of vandalism complaints, etc. Describe how the proposed program or project “corrects” that condition (e.g., increases adult supervision, offers homework tutoring) and how the community as a whole benefits (e.g., decreases child neglect/endangerment, fewer police calls, better school performance, etc.).

Grant making foundations are very often making decisions about which organizations to fund based solely on what they see in black and white right in front of them so make it compelling.

•    The deadline is the deadline

Foundations impose deadlines on proposals in fairness in order that all eligible community organizations have the same amount of time from the grant announcement to the deadline date to develop their proposals and apply for grants. Use a calendar to mark off deadlines as they become available with grant announcements. If the deadline for a proposal is May 15th by 5:00 pm, accept that as a hard and fast rule. Do not be fooled by thinking, “They like me at [Foundation]”, “They know how busy we are here” or “How big a difference can a day make?”. Trust me on this. When the deadline date and time arrives, they will lock their doors and unplug their phones! In many cases, if a deadline is missed it may be a year or longer until the organization can apply to a foundation for funds again – perhaps missing out on revenue that it needs this year.

•    Plan, plan, plan

Keeping with the idea of the development calendar, successful organizations plan strategically for the grant-funded opportunities they seek. In that vein, some of the considerations that may be part of the planning process include the size of the organization, the number of grant-writing staff on board, as well as the opportunity to expand the organization. Many grant opportunities can be satisfied in two to three page requests while others can be enormously time consuming events that go on for weeks. Expansion efforts especially should not be entered into lightly or because they have a large award amount attached to them (again, chasing money). The organization needs to ask itself if it has the administrative capacity to receive a larger grant award. Will it be able to report financial outcomes adequately? Will it be able to report programmatic results as stated? More important, what are the organization’s chances of sustaining an expansion after the initial grant monies are expended? Clearly, this is an issue that goes beyond the grant writer alone and involves the entire management team as well as the Board of Directors.

•    Do not reinvent the wheel

It is not necessary to reinvent the wheel or “start from scratch” every time that a grant request is needed – these are not Shakespearian sonnets. It is highly unlikely that the organization or its programs are changing significantly from one week or one month to the next. If they are, that is a management issue that can be taken up in another blog post! Rather, develop and maintain templates of grant requests for the organization; for example, when requesting general operating funds, as well as its individual programs and services. Update them as necessary when there are changes and be sure to keep research literature citations current.

•    Change the scenery

Sometimes when we get so involved in a project, like putting a grant request together, we are so close to it that we cannot “see the forest for the trees”. In other words, it is writer’s block – writing in circles and not being satisfied with the results, the story of the proposal is not flowing on the pages effortlessly, and knowing that it is not hitting the mark. One of the tricks that I learned that is quite simple and worked like a charm every time was to change the scenery. Set the proposal aside, work on other tasks for several hours or – if the time constraints of the deadline allow it – come back to it the next day. It always surprised me just how much clearer my thinking was in organizing the grant request on the written page after I had been away from it for a while!

•    It’s a lonely job

Grant writing is often a very solitary activity. Aside from occasionally interacting with direct line staff to ensure the most up-to-date numbers served or program results are being used or meeting with the fiscal department for the accuracy of budget numbers, grant writing and putting the request together is pretty much a loner activity. Hence, someone who is inherently sociable and thrives on interaction with others may want to think twice about assuming a grant writer role in an organization.

•    Do not be too hard on yourself

Whether a new grant writer or an accomplished, seasoned veteran, nobody gets everything that they request in a grant application 100 percent of the time. There may be several explanations for this. In many cases, foundations simply do not have the funds to support the total of the requests they receive. Additionally, foundations may inform grantees outright that if they have awarded an organization grants for three consecutive years that they will “take a break” from them so to speak in order to give funds to as many deserving organizations in the community as possible.

For new grant writers who may be struggling with their technique and not receiving the funding they request, do not be discouraged! When I first began writing grants, I received my draft copies back with editorial marks that looked like someone had bled on the pages. Sometimes the best way to overcome an obstacle is to immerse yourself in it. As several of the lecturers said in those trainings and presentations that I attended way back in the beginning, “You simply need to write more grants!”.

Building Financial Strength in a Weak Economy

The sustainability of many non-profit organizations today largely depends on their abilities to  manage their finances effectively and often in new ways. According to the 2013 State of the Nonprofit Sector Survey Results (Nonprofit Finance Fund, 2013), organizations that are successfully weathering the economic storm are changing their business models – among other strategies – in order to achieve increased fiscal stability in an unstable economy.

A review of the current literature in the field yields the following salient points in non-profit organization financial management :

•  Plan to increase cash reserves

According to the Nonprofit Finance Fund survey (2013), twenty-four percent of the participating organizations had only one month or no cash reserves on hand. Thirty-two percent of the organizations had two to three months of expenses in cash. Increasing cash reserves needs to be planned and a part of the overall financial projection for the year rather than happenstance that a surplus will be realized at the end of the year. The lower the cash reserve, the greater the greater the difficulty in meeting expenses during periods of low revenue or when revenue is delayed (e.g., grant awards, contract payments).

•  Financial planning is a team process

Many non-profits typically use a single-handed approach to preparing the annual budget. Effective financial planning for the next year’s annual budget and beyond requires every level of the organization; for example, program managers, development staff, human resources, the finance department as well as individual board members and committees. These individuals have hands-on experience or oversight perspectives about actual revenues and expenses that may be overlooked by just one or two people.

•  Communicate financial needs clearly and often

All too often the financial needs of an organization are discussed primarily among the upper levels of management. In fact, the Nonprofit Finance Fund survey (2013) cites that many non-profit organizations are uncomfortable discussing their financial needs with funders: only 24 percent of participating organizations would discuss their working capital needs, 16 percent would discuss cash flow problems, and 5 percent their debt problems. In the current economic climate, non-profit organizations need to communicate their financial needs clearly and often across all levels of the organization and with other key stakeholders. Once again, in a team process, communicating this financial information to other staff in the organization in terms that are clear to them increases their ability to act on it directly in their positions.

•  Utilize program-specific financial reports

The usual practice of non-profit managers and boards is to use budget-to-actual financial reports to gauge the fiscal health of the organization. That is, the annual budget is a road map against which monthly financial reports are compared to determine how “on course” the organization is to realizing its annual budget. In actuality, much of the research indicates that many non-profit organizations do not have a clear understanding of how much their specific programs are costing them (Barr and Bell, 2013; Kotloff and Burd, 2012). Utilizing program-specific analysis goes beyond the current fiscal year and is part of the overall future financial planning.

•  Invest in realistic administrative capacity

For many years, non-profit organizations have worked very hard to minimize their actual administrative costs. Likewise, foundations and contractors typically want to fund programs and services to the community rather than administrative overhead. However, those administrative costs are very real and lack of investment in this area often leads to gaps in a non-profit’s capacity to perform efficiently and effectively. According to the Nonprofit Finance Fund survey (2013), 69 percent of the participating organizations reported not having enough staff or time for data collection, 40 percent reported not having the correct staff expertise, and 26 percent did not have the necessary technology. Clearly, the old “let’s-cut-as-much-administrative-cost-as-possible” mentality is not working for many organizations across the United States. Adequate investment in a non-profit organization’s administrative capacity – in particular, finance expertise and technology – is an issue that demands honest dialogue between organizations and their funding sources.

•  Determine the need for diversification of revenue

Once considered a key element of financial sustainability, diversification of revenue largely depends on non-profit business models and the type of service the organization provides. Diversification of revenues has some inherent risks in that more streams of income does not necessarily mean greater surpluses at the end of the year. In order to attract new revenue streams, a non-profit needs to develop and sustain new programs or capacities. The reliability and competitiveness of the organization’s revenue streams dictate the degree of diversification that it needs (Barr and Bell, 2013).

•  Collaborate with a broad spectrum of public and private funding

Today’s non-profit organizations need to consider a broad array of collaborations and partnerships with other non-profit organizations (merger) to increase the delivery of services available to meet increasing demands from constituents as well as with for-profit businesses (social enterprise) in order to gain new sources of revenue and build their marketing brands as well as increase their financial sustainability.

References

• Nonprofit Quarterly; “An Executive Director’s Guide to Financial Leadership”, Kate Barr and Jeanne Bell, August, 2013, http://http://www. nonprofit quarterly.org/index.php?option=com_content&view=article&id=19126.

• Nonprofit Finance Fund; “2013 State of the Nonprofit Sector Survey Results”, March, 2013, http://http://www.nonprofitquarterly.org/index.php?option=com_content&view=article&id=19126.

• Building Stronger Nonprofits Through Better Financial Management: Early Efforts in 26 Youth-Serving Organizations, Lauren J. Kotloff with Nancy Burd, April, 2012,  http://http://www.wallacefoundation.org/knowledge-center/after-school/financial-management-for-nonprofits/Documents/Building-Stronger-Nonprofits-Through-Better-Financial-Management.pdf.

Frank’s Guidelines

A number of years ago, I decided that it was in my best interest to develop a personal statement of management philosophy that would speak to my ideas about managing other people and workloads in the non-profit work environment. My statement – written as a bulleted list that was intended to be telling about my actions as a manager yet somewhat humorous at the same time – was aptly titled Frank’s Guidelines. A single-page, typed document, Frank’s Guidelines has been taken along on interviews and for several years it was tacked on a bulletin board in my office.

Frank’s Guidelines has been around for quite some time now, occasionally tweaked here and there but substantively the same today as when I first put it together . As I write this, I struggle to remember just how old Frank’s Guidelines is. Suffice to say, I do remember taking it to a job interview in 2001 (I got the job) and it is likely a few years older than that. Nevertheless, here is Frank’s Guidelines – and hence, the springboard and title for my blog space:

•  Our customers must come first

Plain and simple. If you can’t get behind the mission, customers, or cause of the             organization, there is probably no point in going any further.

•  Meet or exceed the basic requirements or regulations

I have high expectations of myself and I push myself to perform above the “baseline”.     I also value this quality when I find it in others.

•  Mistakes are OK as long as they don’t compromise the first two

Everyone makes mistakes. In the majority of cases, the sky does not fall when someone makes a mistake. Get over it, learn from mistakes, and keep moving forward as long as mistakes are not so egregious that they compromise the first two bullets.

•  I’ll go anywhere or try anything at least once (and as long as it is not illegal)

Essentially, this is creative problem solving and “thinking outside the box”. I am willing to try new solutions to old problems and to take an occasional calculated risk as long as it does not compromise policy, ethics or the law.

•  No surprises

I like surprises on my birthday but not in the organization. Please do not surprise me with a project that is due today or a fiscal issue that was imminent weeks ago. I also work hard to keep you from being unnecessarily surprised.

•  Look for the positive in every person and situation

I accentuate the positive, especially in the people who work with me. Everyone wants to be acknowledged or recognized. When I reinforce the positive behavior of others, I have already increased the likelihood that they are motivated to continue to perform positively.

• Do an honest and clean job

I work with an “open book” mentality such that anyone can stop by to have a look and there is nothing to be embarrassed by later. No hidden agendas. I do my expected job everyday to the best of my ability and go home at the end of the day.

•  Maintain constructive relationships and the self-esteem of others

This is really about burning bridges. The non-profit community operates on relationship building and partnerships. Once you put a negative out there, it is very difficult – if not impossible – to take it back and typically you reap what you sow.

• Help other staff to develop professionally

Part of my job as a manager of people is to ensure that they have the resources and tools they need (within reason) to develop professionally. A thriving, capable and efficient staff that is able to problem solve on their feet sustains an organization.

•  You take the monkey with you

The monkey is a problem. It is OK to come to me with your complaints or problems; however, I hope that in your next breath there will be a suggestion or an idea to resolve that problem. I allow staff to wrestle with their problems in a supportive environment. Again, other staff need to develop professionally.

•  No whining

Ditto the previous bullet.

•  I support the team decision even if it is not the way I’d do it

As a strong advocate of team building and the team process, it would be hypocritical of me not to support the team decision or to override the team decision. Let’s try it!

•  I don’t claim to know everything

If I think that I know everything, there is really nowhere left to go, is there? There is always so much more to learn, see, and do. If I don’t know enough about a particular subject or issue, I will tell you that.

•  Be enthusiastic

Similar to the first bullet, I am excited about the organization, mission, customers and people I work with! I want my enthusiasm to be contagious!

•  Take the initiative to make things better

Whether I am streamlining a financial report for the Board of Directors, changing the toner in the copy machine, or taking the garbage out, I initiate making a situation better. As the old adage goes, if you see something that needs doing…

•  Represent us well in the community

I recognize that every time that I step out of the door, I am shaping an image of how the community sees the organization. I always want it to be a positive one!

•  Have a sense of humor

Last – but certainly not least – I have a sense of humor and I like to use humor appropriately in the workplace. More important, I am not afraid to laugh at myself!