To Hire or Contract? That Is the Question March 6, 2012

If you’re like most nonprofit leaders, you are truly passionate about the work that you do. You wholeheartedly believe in your organization’s mission.  You are even committed to ensuring that your nonprofit is able to meet the various needs of its constituency, both now and in the long run.  If only you didn’t have to fundraise. 

Don’t worry; you’re not alone.  According to the national study, Ready to Lead?: Next Generation Leaders Speak Out, the number one reason that emerging professionals gave for not wanting to become an executive director is having to fundraise.  When respondents were asked to expound on this, the fear of fundraising was not about an unwillingness to raise money per se.  Rather, it was the idea that they wouldn’t be successful in raising much-needed funds.

If you’re among this group of nonprofit leaders, what should you do?  Does it make sense to hire someone full-time to oversee the organization’s fundraising duties or contract with a consultant in the short-term?  While it’s true that you’ll never be free of the wonderful world of fundraising since you are your nonprofit’s main spokesperson, the answer to this question depends on a variety of factors.  Below are a few tips to consider in how best to pass the proverbial buck (see what I just did there?):

• Assess Overall Need.  Before you make any sudden moves, first consider what you hope to achieve by increasing your fundraising capacity.  Do you need help in mapping out your fundraising activities for the year or do you want to hand off the majority of fundraising responsibilities to another person?  If you hire a full-time staff member, this person will primarily oversee and implement your organization’s fundraising activities; keeping you abreast of benchmarks of course.  On the other hand, if you decide to hire a consultant, he or she can provide guidance on best practice fundraising strategies and even strengthen (or create) fundraising tools for you to use (e.g., grant proposal templates, strengthen content on online donation page, etc.).
  

• Review Organizational Budget.  Another indicator to consider is your organizational budget.  Is your nonprofit ready to support another full-time staff member complete with competitive benefits?  According to data from Professionals for Nonprofits’ 2010 Salary Survey, the average salary range for a development director in Washington, D.C. is $70,000-$80,000 per year ($40,000-$45,000 for a development associate).  If you have room in your budget to hire another person, go for it (our economy needs you for goodness sake).  If not, then you might consider contracting with a fundraising consultant for a short period of time to help you map out and/or implement some key fundraising activities to alleviate the burden.

Now it’s your turn.  Have you ever contemplated hiring a full-time development person versus a fundraising consultant?  What did you ultimately do and why?

Time is Money September 13, 2011

For nonprofits, volunteerism is the best thing since sliced bread, especially in these tough economic times.    According to a recent report from the Corporation for National and Community Service, Americans spent a total of 8.1 billion hours volunteering in 2010.  This increase was most significant among Generation X (people born between 1965 and 1981) as they devoted 2.3 billion hours to service last year.  While one could argue that the economy has freed up a lot of time for people to lend to charitable causes, this may not necessarily be the case.  In fact, the data from this report is consistent with generational patterns about the volunteer life cycle (i.e., volunteerism rates tend to be high during the teen years, drop significantly during early adulthood, recover as individuals pass through their the mid- to late twenties, and peak in middle age).

So what does this mean for YOUR nonprofit?  Well, for one, this data affirms the altruistic value of most people.  Oftentimes, it is not the pursuit of the almighty dollar (or even a fancy schmancy title) that gets folks to put in their best work to forward your organization’s cause.  In a world where xenophobia and self-preservation reign supreme, volunteerism (like its play-cousin, philanthropy) is still a significant source of in-kind contributions for the nonprofit sector.  But, the previous statement is only true when you effectively manage this free-will offering.

Below are some quick tips to consider in soliciting and stewarding volunteer support:

• Free ≠ cheap. While it’s true that you do not pay volunteers to work, this does not lessen the value that they bring to your organization.  Having said that, be mindful of the way in which volunteers are organized within your company.  If possible, consider hiring someone to recruit and manage your volunteer base or restructuring the responsibilities of your current staff to fill this need.  Still have to tighten your purse string?  Consider using social media (e.g., LinkedIn and craigconnects) to reach out to the volunteer community.
  

• Leverage impact. Strong community involvement is a great way to show potential funders and donors that your organization is worth supporting.  And while reporting the number of volunteers that you have is a start, consider adding a financial value to their support as well.  Case in point: Civic Grind.  Launched in 2010, this social enterprise company was created to advance progressive growth in under-resourced communities throughout the Baltimore-Washington region through the civic-engagement of Gen X and Y African American professionals.  In its first year, Civic Grind ran a blog post about a local nonprofit.  One of its readers saw the article, reached out to the nonprofit’s executive director, and offered to write a grant proposal pro bono.  Shortly after that, the executive director received news that their proposal was approved and they would be receiving a $50,000 grant!  This story is a real-world example of the financial impact that volunteers can have.  
  

• Steward well.  Since volunteers ultimately add to your organization’s bottom-line, it is imperative that they are treated with respect among your staff and board.  Have an annual fundraising gala?  Consider dedicating a portion of this event to acknowledging the contributions of your volunteers.  And don’t just wait until a public event to say “thank you”.  Let your volunteers know you appreciate them all year long.

How have volunteers contributed to the success of your organization?  What other advice would you offer on how to effectively translate their support in advancing your financial goals?

Midway is More Than an Airport July 13, 2011

Congratulations on making it to the middle of the year!  I hope you’re making progress on meeting both your program and revenue goals.  Now I know this is the time of the year where hardcore assessment is the furthest thing from your mind.  After all, its 90 degrees outside and that luscious red sangria is calling your name.  But, the summer months are also great for reviewing your organization’s fundraising plan and adjusting your program activities (if necessary) to make sure your organization doesn’t end up in the hole at the end of the year.

So where do you start? Below are three tips to help you stay on track to meet your year-end goals:

• Review your financials.  All nonprofits should produce monthly financial statements.  Not only does this keep your board of directors up-to-date on the health of the business, but it allows you to have current financial information handy when it’s time to submit foundation and government grant reports.  When assessing your nonprofit’s progress in the middle of the year, these statements also provide a snapshot for your staff to consider how your remaining expenses will be covered given your expected revenue.  If the latter is less than the former, then you may have to scale back some of your program activities for the year.

• Prioritize.  If the worst-case scenario happens and you have to scale back  your program activities for the year, don’t panic.  In fact, take a deep breath (or a deep sip of that red sangria; when no one is looking of course) and prioritize those activities that are most in line with your mission and the needs of your constituency.

• Get creative.  If you find that you can’t cut out any of your program activities, then it might help to find creative ways to still meet your mission.  Could you partner with another nonprofit to deliver your services? Do you have an existing funder that would consider providing a discretionary grant to your organization to supplement the revenue gap?  Fundraising is all about creativity and being able to tweak programs/revenue-generating strategies midway is a great strategy to practice in strengthening your organization’s long-term sustainability.      

How does your organization use the summer months? Are there are any other practices that your organization uses to assess its progress midway?

Government Cheese June 15, 2011

Now that change has come to the White House, there seems to be an abundance of government grant opportunities.  With the creation of President Obama’s Office of Social Innovation and Civic Participation in 2009, the Federal Government is committed to increasing the impact that the social sector has on improving the quality of life for all Americans.  Good news for nonprofits, right?  Absolutely!  But, not necessarily all nonprofits.

<clears throat> Allow me to explain.

The government grants process is incredibly competitive, not to mention rigorous (which I just did).  In FY 2009, more than 300,000 applications were submitted to the Federal Government.  While this submission rate is likely based on the Recovery Act, the Federal Government still provides access to more than $500 billion annually.  But, as with all things groovy, it is important to assess whether or not your nonprofit is ready to apply and oversee a grant from the feds.  As the old saying goes, “To whom much is given, much is expected.”

Here are four tips to keep in mind when considering when to apply for a federal grant:

• Partner Up.  When applying for government funding, many agencies want to know if you have existing partnerships with other local nonprofits.  These partnerships not only give your nonprofit “street cred”, but it shows the government agency that they are funding a larger system of change.  And simply listing your partners is not enough.  Government grantors often require you to provide signed letters of support from these organizations when submitting your application.
  

• Check Your Capacity.  Do you find yourself submitting grant reports to foundations on time?  Is your staff already strained to deliver its existing services?  If the answer to either question is “yes”, then you should pump the brakes on applying for a government grant.  The application process tends to be a tedious one (often requiring lengthy page narratives and attachments) and the full participation of your staff will likely be needed. 
  

• Can You Sustain This.  When I moonlighted as a grant reviewer, several applications asked the nonprofit to discuss their plan for ensuring the financial sustainability of the program once the government funding has expired.  Unfortunately, for many applicants, this plan was not entirely clear and resulted in a low-score on their grant submission.  The rule of thumb is that all nonprofits should have a long-term funding plan, regardless of the type of grant that is being applied for.  So if your nonprofit has yet to chart out a strategy to raise funds beyond the current fiscal year, you may want to wait to pursue government funding.   
  

• Set Realistic Goals.  Funders are keen on requiring nonprofits to assess the impact of their work on improving community life.  The same requirements are true for government grantors.  Case in point: Race to the Top grantees.  According to a recent article in Education Week, the majority of states that received federal funding in 2010 to improve their public school systems are struggling to meet the expectations made in their original work plans.  Their progress in achieving goals is under significant scrutiny from the Federal Government, resulting in the hold-up of needed funds to continue the next phase of program implementation.  This situation highlights the need to provide realistic and attainable goals when applying for government funding.

What do you think?  Given these suggestions, is your nonprofit ready to pursue government funding?