Tuesday, July 26, 2011

Starting New Nonprofits: 5 things to do before you file for your 501(c)(3) status

There are so many amazing people who want to make the world a better place. These people are so generous and giving and often see their nonprofit idea as a ministry, the purpose to their lives. Usually motivated by passion for delivering a program, they are typically are not focusing on the tasks that will make them successful.

WHAT TO DO WHEN YOU’VE GOT THAT AMAZING IDEA FOR A NEW NONPROFIT!

1. Research your idea. You may think you’ve got a new idea, but chances are someone else has thought of the same thing. Find out who else in your community is doing something similar. That doesn’t mean you should give up on your idea, but it does mean you will have to do it in a way that is different and unique from others. Funders hate duplication.

For example, I met with a woman who started an organization that serves at-risk teen girls. After listening to her mission and the services she would offer, I explained that there are already so many programs for girls and many of the services she was offering were already being provided. As we continued to talk though, she identified the one thing that she wanted to do that I had never heard before. She required the girls to participate in a weekly reading circle. They read books out loud, discussed them and also participated in writing projects. I thought that was such a powerful way to empower these girls and told her that should be her main focus.

The other reason you need to research is to find best practices and learn from others’ mistakes. People love to talk about their own organizations and are usually more than willing to share their successes and failures.

2. Get clear on your story. From day one, you need to see every moment of every day as an opportunity to inspire people with how you want to change the world. Each person you talk with is a potential ambassador and resource for you. Your “story” needs to be compelling, concise and consistent. It also needs to be driven by a vision for the future – how the world will be better because of your organization. Potential supporters and donors invest in your vision for the future, not your mission or what you’re going to be doing day to day.

You also will need to develop a professional case statement (one piece of paper with two sides of content) that includes your mission, vision for the future, unique approach, motivation for your idea, any past success that shows you can be successful in this venture, your goals for the next 12 months, and how people can help you. Now test it. When you quickly share your story, your answer to the question, “Tell me about your idea,” should not be more than 10 seconds long, or you’ll lose them. If they say, “WOW, how do you do that,” you’re on the right track. If you have to clarify, you need to work on your story more.

For example, I worked with an organization that had been around for 20 years and had just stagnated. When I looked at their mission, it said it did about 20 different things. I asked the founder if they really did do all of those things, and the answer was no. I asked her which of those 20 things they are great at, and it came down to three. You should never say you do more than three things or people won’t remember any. We helped the organization get clear on their purpose, facilitated a community visioning session to create a compelling vision for the future and developed a professional case statement. One of the board members raved about the case statement who previously didn’t know how to talk about the organization. The clarity in their story led to him having more confidence in inspiring others with the work of the organization.

3. Figure out who and what you need before you apply for nonprofit status. In too many cases, founders rush and are not strategic when they put their board of directors together. Some founders want to control everything so they ask people to sit on the board who will act as “yes people,” or they recruit people of influence who do not have the time to help. New organizations need working boards, and you need to be very clear on expectations and what you need them to do before you recruit.

For example, we work with a woman who is working to open her 2nd charter school. She has a professional case statement and a committed board. Unfortunately, everyone on the board works for other struggling nonprofits or agencies that are in related fields. No one on the board works in the private sector, no one has the connections to potential donors they need, no one has a marketing/PR background, and no one has expertise in finance or law. Now she will need to reorganize her board to get the people and talent she needs to be able to secure resources and get connected to the people who can help her be sustainable.

4. Role of the founding board should focus on three things:

· Developing or fine tuning the program and putting a system in place to track impact and results

· Tirelessly promoting the organization in the community in the same compelling, concise and consistent manner

· Making connections, opening doors, inviting people to understand the power of your mission and identifying opportunities for resources (dollars, people, partners, etc.).


Yes, that means fundraising, and it begins with the board. From day one, board members should be required to make a meaningful financial contribution to the organization and help secure the dollars needed to file your nonprofit status and other start-up costs.

For example, I worked with a small group home for teen boys who are not a match for regular foster care. The board lacked the direction they needed to know how to contribute their talents and connections. After working with them to better articulate who they are and set clear goals, we helped them facilitate an information session for prospective volunteers. Only five people came, but I told them it’s never about quantity, it’s about the quality of the interaction with people. One of the five people was a 25 year old man who had stayed at the group home, and he was doing well. Another one of the guests was a connection of the president of the board; he had never invited her to learn about the organization before. Well, four out of the five people joined a committee and the other person sent a check for $1,000 (their largest donation) and recruited her daughter, who had expertise in marketing.

5. Cultivate relationships. Again, don’t rush to get your IRS paperwork done. With your board, brainstorm a big list of people and organizations that may be interested in your idea or could give you valuable feedback. For example, when I wanted to start Friends of Bradford Beach, I immediately went to The Park People, the Milwaukee County Parks Department and the county supervisor to share my idea and ask for feedback. In every case, referred me to another resource I needed to move my idea forward. ASK FOR HELP! The purpose of meeting with these people is NOT TO ASK THEM FOR MONEY. It’s to inspire them with something you’re passionate about, ask them what they think, if they see themselves getting involved, who else needs to know and if they would be willing to connect you to others who might be interested. NO ASKING FOR MONEY right now.

For example, our new client is an organization that’s been around for 30 years providing GED and adult education to people in their community. We’re going to help them do a better job of telling their story and inspire and empower their board members to focus on making connections and inviting people in to the organization to experience their mission. Currently, the board members are very uncomfortable about doing this. When I explained that relationship fundraising isn’t about asking for money, they looked at me kind of funny. I explained, that relationship fundraising is about inspiring people with something you’re passionate about and inviting them to experience the magic that goes on inside the organization. The next step is not to ask for money, but to ask people what they think, if they see themselves getting involved, who else do they think needs to know about the organization and whether they would be willing to make a connection. One of the board members, who happened to have wealth in her family and know a lot of people, happily said, “I can do that!”

Friday, July 8, 2011

5 Biggest Foundation Fundraising Mistakes

Are you focusing on the right things when it comes to foundation fundraising? Here are some common mistakes:


Submitting a grant application without a relationship with the foundation. Did you know that only 1-2% of grant applications get funded? If the foundation can afford to fund 25 grants, 75 will not get funded. So if you were the decision maker how would you choose which organizations to fund? Well, if it was me, I would start with the organizations that I know something about or have some sort of relationship with rather than one I’ve never heard of. What it all comes down to is that you should never send a grant in without having some sort of relationship with the foundation you are applying to.

What to do: Before submitting an application, visit the foundation’s website and find out who the staff people and board members are. Ask your own staff and volunteers if anyone has a connection to any of those people. Even a call from a volunteer to the foundation asking for clarification on whether you would be a match followed by an invitation to tour your organization or other opportunity to meet with someone from the foundation is a great first step.


2. Hiring a grant writer. Most organizations begin foundation fundraising by hiring a grant writer. But that’s focusing on the wrong thing. But honestly, it’s not the writing of the grant that makes a difference, it’s the mission and effectiveness of the organization, as well as a compelling picture of what the future looks like because of the organization’s work. And how do you help a foundation experience the power of your mission? By inviting them in to hear your story, see your mission in action, having the people you serve share how your programs have changed their lives, and share your plans for the future. Relationships come first, then writing.

What to do: If you’re in the position to hire someone, don’t hire a grant writer. Hire someone who can help you identify and prioritize prospective foundations and then work with your staff and board to reach out to those people and foundations and invite them to tour your organization. The goal here is to inspire them with your story and share your future plans.


3. Not following up. If you’ve been lucky enough to have a staff person or board member from a foundation visit your organization or school, and they invite you to submit a letter of intent, then you better do that right away! Ideally, you want to be invited to apply for a grant, and when you get the opportunity, this is your chance to impress the foundation.

What to do: Once you’ve submitted the letter or application, you will want to follow up to make sure they received your documents, ask if there is anything else they need or if anyone else would be interested in a tour of your organization. Many organizations require a follow-up report to show how their grant made a difference. Every interaction is an opportunity to show your gratitude and continue to build your relationship with the foundation. Get this done on time!


4. Not learning from rejection. Many organizations get rejected because they haven’t done their homework; they may not have been a match. If they had developed a relationship with the foundation ahead of time, they would have received feedback on whether or not they were a good match for the foundation. Others may have a great application, but because the foundation cannot fund every great application, in the end they will probably fund those they have some experience with.

Either way, if you get a rejection letter, this is also an opportunity to build a relationship with the foundation, and it’s a learning opportunity too. Whether the foundation is able to fund you one time or many times, your relationship could lead to many other connections or resources. For example, while the foundation may have decided not to fund your grant application, one of the foundation officers or board members may have really been inspired and may decide to support you as an individual.

What to do: When you get a rejection letter, make a call to the person who sent the letter and tell them you would like to learn from the experience and see if you can get some feedback on how you could do a better job on your next application. Ask if it would make sense to apply in the future, and then see if it would be possible to invite someone from the foundation to tour your organization. Ask what they think your weaknesses are and even if they could connect you to resources to help you improve in those areas.


5. Not continuing to cultivate the relationship once a gift is received. Many organizations think their job is done once they receive a grant from a foundation. Really, your job has only just begun when it comes to building a long-term relationship. This foundation could lead you to many other individuals who could find your story to be very inspirational. Rejection is a message to you that you need to do something different.

What to do: First, make sure you put staff and board members of the foundation on your mailing lists to receive newsletters, event invitations and annual reports. If you have any major events, make sure one of your board members personally invites people from the foundation to attend. If you have a fantastic success story, send a quick email off to someone at the foundation sharing how their donation has made a difference in your ability to deliver on your mission. Invite them in for another tour and be sure to ask them, “Who else needs to know about us?” This is one of the most powerful questions you can ask a supporter. One supporter could lead you to one or even ten prospective supporters.

Let us know what you think!