Common Characteristics of Nonprofit Organizations with Weak Grant Proposals

These are common characteristics of nonprofit organizations that present weak grant proposals:

  • Weak governance – The agency has a moribund or non-functioning board of directors that is not adequately overseeing the agency.  Examples: The board is very deferential to the board chair or the CEO, has spotty meeting attendance, or has little to no committee participation.
  • Poor program quality – The agency’s programs are ill-designed or inadequately staffed.  Example: The agency offers an educational program taught by untrained volunteers who operate without any curriculum guidelines.
  • Lack of results – The agency cannot demonstrate meaningful results for key, mature programs.  Example: The agency cannot show whether a long-standing afterschool program, the agency’s centerpiece effort, leads to any learning or behavioral gains among participating children.
  • Poor financial stewardship – The agency does not manage its finances responsibly.  Examples: The agency has generated worsening operating deficits for five years straight, but does not have a meaningful plan to reverse the decline, and the board seems uninvolved or unconcerned. Or the agency has complicated finances and significant revenues but cannot provide a recent audit or a sound explanation for lack of an audit.
  • Lack of candor – The agency fails to disclose important developments in the life of the agency.  Examples: The agency does not mention the resignation or dismissal of key staff, withdrawal of major support, or pending litigation.
  • Lack of planning –The agency is not planning adequately, or soon enough, for imminent challenges.  Example: The agency knows that a long-standing government grant, representing a significant portion of its revenue, will end in a year, but has not started developing other financial resources to replace it.
  • No need for service – The agency is providing duplicative services.  Example: An agency does not perform adequate community research before developing a new program, and therefore cannot demonstrate convincingly why its program is actually needed or how it is unique.
  • Not cost effective – The project does not appear to be cost effective, considering the number of people to be served, the total cost of the project, the amount requested, or the life of the project, especially in comparison to competing requests.  Example: The agency is requesting $100,000 for a $1 million piece of equipment, which will have a useful life of five years and serve 200 people.
  • Sustainability – The agency seems unlikely to be able to sustain the project over time.  Example: An agency projects it will need $250,000 per year in new philanthropic support to sustain a proposed program. But the agency has never previously raised more than $20,000 in a single year, and does not plan to add staff to its development operation.
  • Bad timing – The agency submits a request too early in the project’s life. Examples: The agency submits a request for a building program that is still largely conceptual, with no final architectural plans or firm cost estimates yet developed. Or the agency presents a request for a “demonstration project,” but has not yet decided how the project will be evaluated or how it might be replicated.

Funders consider many factors, including the following:

  • If the proposed program is well designed to meet a specific need and will produce well-defined, measurable, cost effective, positive change for the population being served.
  • If sufficient financial support is available from other sources to ensure implementation of the program and the program’s continuity after the grant period.
  • If the agency has strong leadership and financial stewardship.

What large, sophisticated funders look for when deciding whether or not to give to a nonprofit organization:

  • Mission statement – clear, focused
  • Board members – professional affiliations, diversity (professional, ethnic, and gender), personal involvement, personal giving
  • Staff – qualifications, accomplishments
  • Funding – financial stability, diversity of funding sources, sustainability
  • Budget – reasonableness, accuracy
  • Clients – socio-economic status, ethnicity, gender
  • Success – measurement, history
  • Collaborative efforts
  • Volunteers – level of involvement
  • Professionalism – without extravagance

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Recent grants received by our clients include:

$20,000 for a pet rescue organization – for general operating expenses

$20,000 for a local symphony orchestra – for music for children

$15,000 for a domestic violence agency – for their emergency care program

$10,000 for a local public theater – for their capital campaign
Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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Don’t Send Letters of Inquiry

Nonprofit organizations sometimes send out letters of inquiry (LOI) to foundations and corporations to try to obtain invitations for a full proposal.  The thinking sometimes is to send out dozens or hundreds of LOIs and wait to see who invites a full proposal.

In most cases, doing this will decrease your chances of receiving grants.

The only time it’s appropriate to submit an LOI is if the funder specifically requires that your first contact with them be in the form of an LOI.

Some funders that require an LOI have an online LOI application process, and after you submit it, if the funder invites a full proposal, they will send a link to the online full proposal application.

Other funders just require that you submit a brief letter for the LOI.  Sometimes they require some attachments with the LOI.  If they invite a full proposal, they’ll send you the guidelines for doing so.

You should never submit an LOI to a funder unless you specifically know that they require it as a first step.  Only a very small percentage of funders require an LOI.  For the rest, your first contact with them should be a full proposal.

If there are no guidelines for a funder, you should submit only a grant proposal, with no attachments other that your IRS letter.

If you submit an LOI to a funder that doesn’t require it, some funders that receive it will review it as though it’s your complete application.  And since the LOI will likely have less information than a full proposal, it’s much more likely to be denied.

If you submit an LOI to a funder that has published guidelines about how to submit a grant proposal to them, and all you send is an LOI, it will likely be immediately denied for failure to follow their guidelines.

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Recent grants received by our clients include:

$56,500 for an organization dedicated to the well-being and education of low-income children – $26,500 for their summer reading program, $25,000 for a new facility, and $5,000 general operating support

$40,000 for an agency that serves as a clearinghouse of donated resources for the homeless – for products for homeless children

$30,000 for a school that develops urban youth through transformative education, equipping future leaders – for general operating support

$20,000 for an organization that has programs for homeless and low-income persons – $10,500 for food distribution, and $10,000 for job skills training

$20,000 for an agency that help people experiencing homelessness regain their dignity and independence – for their transitional shelter program

$13,500 for a domestic violence agency – $8,500 for children’s programs, and $5,000 for their emergency care program

$10,000 for an agency that empowers formerly incarcerated mothers and their children to achieve a productive and fulfilling life – for general operating support

$10,000 for an organization that offers adaptive recreational sports programs for physically disabled persons – for children’s programs

$7,500 for an organization that serves children and families affected by homelessness – for their emergency shelter program

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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What Percentage of Total Expenses Should Go Toward Program Expenses

Prospective funders often ask nonprofit organizations “What percentage of my donation goes directly to the cause?”  If your correct answer to this question is anything less than 100%, no one should donate to your nonprofit organization.

Starting today, you might choose to change the way you’ve been answering that question.

Your answer to the question is typically taken from the statement of functional expenses, which breaks down expenses by three categories – program, management/general, and fundraising.  If all expenses of your nonprofit organization are necessary and reasonable, and all are required for your agency to provide its services and serve its clients, then the way you split expenses on the statement of functional expenses should be irrelevant to funders.

Among charity watchdog organizations, the Better Business Bureau says at least 65% of expenses should be for programs; Charity Navigator says the most efficient charities spend 75%+ on programs; and the American Institute of Philanthropy says at least 75% is ideal.  Our experience is that the standard most often quoted by foundations is 75%.

But, the traditional split of expenses between program, management/general, and fundraising is close to meaningless because there is little consistency between nonprofits in how they record these expenses.

A study reported in Functional Expense Reporting for Nonprofits, The Accounting Profession’s Next Scandal?, by Kennard Wing, Teresa Gordon, Mark Hager, Thomas Pollak, and Patrick Rooney, published in 2006, found that:

  • 37% of nonprofits with at least $50,000 in contributions report zero fundraising costs.
  • One-fourth of nonprofits reporting $1 million to $5 million in contributions report zero fundraising costs, as do nearly one-fifth of those reporting more than $5 million in contributions.
  • 13% of nonprofits report zero management and general expenses.
  • 7% charged all accounting fees to programs, and another 20% split them across more than one category—despite the fact that Form 990 instructions use accounting fees as an example of what is meant by management and general expenses.

There are no nationally consistent norms or enforced standards for allocating expenses between the three categories.  Most ratios (program expenses as a percentage of total expenses) are based on self-reported data and rationales from the Form 990, which, the above study and other research have found, are often rife with inaccurate and inconsistent accounting and reporting, meaning one cannot accurately compare the 990 of one organization to that of another.

We have found that many of our clients, for example, split the executive director’s salary between functional categories after a brief thought process as follows – 75% program, 15% management/general, and 10% fundraising.  Often, expenses are functionally allocated by inexperienced people, maybe even the executive director’s next door neighbor’s cousin who’s just trying to help out, and the results are used on the 990 and even make their way to audited financials.  And yet funders look at the results of that thought process, the reporting of amounts by functional category, as though they’re meaningful – as though reported program expenses of 76.3% for one organization is really better than the 72.8% reported by another organization.  They say the organization reporting 76.3% is more “efficient.”

Actual costs vary between nonprofit agencies based on many factors other the “efficiency” of the organization.  One organization may record staff time as administrative costs, while another might record it as program costs.  Some nonprofits may not record certain staff time, such as time spent on grant writing or event planning, as fundraising costs, though most others do.  Fundraising costs can vary based upon the age and type of the organization.  Newer organizations tend to have higher fundraising costs because they have to build donor lists and contacts.  Organizations dealing with controversial issues, such as AIDS, often have higher fundraising costs because it may require more effort to raise the same amount of funds as other nonprofits do with less effort.  Organizations that provide services to abused or sick children generally have the easiest time raising funds, and often the lowest fundraising costs.  But that doesn’t mean they’re doing a better job on fundraising than organizations with a less popular mission.

Some funders take issue if a high percentage of a nonprofit’s total expenses is for salaries.  But salaries as a percentage of total expenses vary greatly between nonprofit organizations depending on an agency’s mission.  One client of ours provides wishes for children dying of cancer (not Make-A-Wish Foundation), and only 20% of total expenses are for salaries because most of their expenses are for outside organizations providing the wishes.  Many nonprofits have 50-75% of total expenses as salaries because most of their services are provided by staff and not vendors.  One of our clients has a private school for severely developmentally disabled children and they have a 1:2 teacher/student ratio.  Does that mean they’re less “efficient” than a school for “normal” kids with a 1:15 teacher/student ratio, or less deserving of donations?

Much of the amount paid to vendors for services and supplies is paid by those vendors for salaries in their own business, but funders never question those salaries.  Is it better to pay vendor’s salaries than staff salaries?

We hope you finish reading this blog with two take-aways:

1.  Ideally, when a prospective funder asks “What percentage of your organization’s expenses is spent for programs?, your answer should be “100%.”  If that answer isn’t appropriate under the circumstances, a good answer might be:

“100% of our expenses are necessary for us to provide our programs.  We don’t make any expenditures that are not required for us to be able to operate our organization.  In order to comply with IRS requirements (and Financial Accounting Standards Board requirements if your organization has audited financials), on the Statement of Functional Expenses we report X percent (insert the percentage from your most recent Statement of Functional Expenses) of expenses as direct program expenses.”

2.       If you are not currently recording at least 75% of your organization’s expenses as program expenses, change it today.  As discussed above, there is no consistency between nonprofit organizations in allocating expenses between program and other, and many other organizations very similar to yours are reporting a far higher percentage of expenses as program than yours does.  You should be very aggressive in deciding how to allocate expenses – not inaccurate or deceptive, but aggressive.

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Recent grants received by our clients include:

$75,000 for a clinic for low-income families – for a new OB/GYN structure

$30,000 for an agency focused on feeding kids and fueling futures by providing a much-needed third meal of the day to food-insecure children – for a new van

$25,000 for for organization with a comprehensive homeless program that helps willing people gain dignity and independence – for general operating expenses

$25,000 for a mental health advocacy agency – for general operating expenses

$20,000 for an organization that helps homeless individuals – for their capital campaign

$15,000 for an agency that prevents homelessness and stabilizes those at risk in decent, affordable, and permanent housing – for their housing program for veterans

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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Just Because a Foundation Approved Your Grant Request Before Doesn’t Mean They’ll Do It Again

There is a common misperception that if your organization receives a grant from a particular funder, you’ll probably receive a grant from them next time you apply as well.  This assumption is a mistake – and often a costly mistake.

Even if your organization received a grant from a funder last time, the next time your organization applies, your application will be reviewed the same as for all other applicants.  This generally applies even if your organization has received a grant from the funder for multiple years in a row.

You should not assume in your budget that your organization will receive a particular grant, and you should always be seeking new grants.  You can’t depend on previous funders always giving your organization another grant.

Funders might change their funding focus areas.  Foundation board members, especially new board members, might change the criteria by which applications are reviewed.  The board member who championed your organization in the past might have left the foundation.  Or a funder might just decide that they want to spread their funding around to other organizations, the same as you might do with your own personal giving.

Most funders don’t like to receive phone calls asking why, since your organization was funded last time, your application was denied this time.  If you personally made a donation to one charity for a few years in a row and then decided that you wanted to spread your giving around to other charities instead, would you like to receive a phone call asking why you didn’t once again support the same charity?

One former client of ours from a few years ago received a grant from one foundation every year for several years, and suddenly one year they were denied, even though nothing had changed with the organization.  The board chair of our client decided to write a letter to the board chair of the foundation saying that after having received funding for so many years, the organization had included a grant from the foundation in their budget, and wanted to know why this year’s request had been denied.  Not only did the foundation not respond to the letter, but the organization hasn’t received a grant from that foundation since.  The foundation might have resented being told more or less that a grant had been expected.

A large faith-based organization contacted us awhile back and said that for many years one funder had provided $8 million of their $9 million annual budget, and that funder had just given them one year’s notice that they were completely backing out.  The organization admitted they had done little to find new grant dollars over the years because of the one large funder, and they had no idea how they were going to make up almost 90 percent of their large budget in such a short time.

A few years ago a small afterschool program had received 100 percent of its funding from one funder for many years, and had not sought any additional funding sources.  That funder suddenly had a disagreement with the organization and gave them three days’ notice that they were terminating the monthly checks they sent.  That organization was saved when there was a news story about their predicament and a couple of local foundations came to their rescue.

If you think you’re sure that your organization will continue to receive funding from a particular funder, can you imagine contacting the funder and asking them, assuming everything stays the same with your organization, if your organization can count on continuing to receive funding this year and next year and the year after that?  Most funders would not respond well to that question, and your organization shouldn’t make such an assumption.

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Recent grants received by our clients include:

$100,000 for a hospital foundation – to establish a center for surgery and digestive diseases

$80,000 for an agency that provides stability and life-changing supportive services to children and families affected by homelessness – $65,000 for expansion of emergency services, and $15,000 for technology

$33,000 for a school that develops urban youth through transformative education, equipping future leaders to impact their communities – for general operating expenses

$20,000 for an agency dedicated to the well-being and education of children – $15,000 for snack packs and summer lunches for children from low-income families, and $5,000 for a summer reading program

$20,000 for an organization that transforms convicted felons by unlocking their potential through entrepreneurial passion, education, and mentoring – for general operating expenses

Murray Covens, Principalmurraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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Still More Myths About Grant Writing (continued from last blog)

8. Some professional fundraisers can raise grant money “guaranteed.”

Anyone who guarantees that they can obtain grants for your organization had better be speaking in colloquial terms.  If someone pitches to your organization that they can actually guarantee raising your organization money – be very leery.  While most strong nonprofits have excellent chances at raising grant money – there are no guarantees.  This is why any fundraising process must be long-term.  An organizational investment in the process must be made.

9. Grants are just for start-up nonprofit organizations.

No.  Do not leave potential donations on the table.  If your organization is raising money in many methods but not grant writing, ask yourselves ‘why’ and learn about it.  Consider doing it!  Grant writing’s cost/benefit ratio, when the program is well managed, is excellent.

10. Start-up nonprofit organizations should only try to raise grant donations.

Any support that you raise at this stage of the organization will pay off in spades if you maintain it well – into the organization’s future.  Go from thinking ‘start-up’ to thinking ‘long-term.’  Diversified fundraising provides more safety and security to your organization’s financial future.

11. Public relations isn’t important to our raising grant money.

Control what others are saying about your organization by disseminating your strong track record and successes.  Be sure that your board is telling friends and colleagues why they volunteer with your organization.  Provide clients, constituents, and potential donors with information.  Call the press after a big success or when you launch or break ground on  a new innovative initiative.  Grant donors are just like any other kind of donor.  They invest in successful organizations working for causes that they’re passionate about.  Get the word about your organization out there.

12. We board members and/or I, the executive director, can just take a leadership nonprofit position without being responsible/proactive about learning the latest in nonprofit governance, without understanding my legal and fiscal responsibilities to the organization, and without learning about fundraising and its latest paradigms.

Anyone working for a nonprofit whose leadership acts this way – be warned.  You are not working for a well-run or healthy organization.

13. Nonprofits are meek organizations that are lesser than ‘for-profits,’ provide an opportunity for people to contribute to their community, and hardly receive government oversight.  We can be lax and get away with stuff.

Read the latest press on Congress’ recent initiatives to increase American nonprofits’ reporting to the federal government.  In particular, they want to oversee what percentage of funds raised is going to your mission’s programs, and whether you’re legally and professionally accounting for your receipts and costs.  Meanwhile, donors are smarter and more proactive today.

14. Straying from our mission statement (or the scope of its work) is OK.  Nobody will know or care.  We can still raise donations, including grants.

Nonprofits succeed with community support – not in a vacuum.  Your reputation is everything in fundraising, let alone grant writing.  If you aren’t on your mission statement’s message, why are you still operating?  Either correct the scope of your work, close shop, or reorganize as a new agency with a new mission statement.

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Recent grants received by our clients include:

$224,000 for a chain of private schools – for renovations of buildings and playgrounds, computer hardware, and tuition assistance

$68,000 for a shelter for children and families affected by homelessness – for general operating expenses

$32,000 for an organization that provides programs for abused and neglected children – for a program that provides temporary shelter for children removed from their homes by CPS

$30,000 for a mental health advocacy agency – for a program that teaches children how to avoid becoming victims of violence

$30,000 for an organization that meets the critical needs of homeless children – for products for homeless children

$25,000 for a domestic violence agency – for general operating expenses

$25,000 for an organization that provides housing for the homeless – $15,000 for general operating expenses and $10,000 for an employment initiative

$20,000 for an agency that empowers inner-city residents to fight crime on the street – for general operating expenses

$12,500 for an organization that provides last wishes and gift for children terminally ill with cancer – for general operating expenses

Murray Covens, Principalmurraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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More Myths About Grant Writing

1. Our organization needs to just go get a grant or two, and we’ll be set.

Wrong.  Grant writing must be a part of a diversified, long-term, supported fundraising (or development) plan.  For example, your fundraising could include grant writing, an annual appeal, bequest planning, envelopes in your monthly newsletter, a major donor program, and a walk-a-thon special event.  This takes experience, commitment, and work. A new fundraising method often takes two or three years to make money, and it takes a lot of planning. Your fundraising must be ongoing and diversified.

2. Grant donors are just the wealthy giving their money away so that they can feel good.

Wrong.  Today’s grant donors are savvy.  They do not just sign away checks.  They select causes that they are passionate (and informed) about to effect change in our world.  They often research which nonprofit organizations are mission-driven, healthy organizations, successful at their mission statement’, and good to work with.  They often expect reporting, and always program success and results.  Grant donors talk to one another and share information about bad apples.

3. We can just dive in and apply for a grant.

Wrong.  Successfully getting grants takes planning, learning what to do and how to do it well, professional know-how, commitments to the process from leadership and staff, time, research, writing drafts and re-writing, patience, relationship building, communication, public relations, and more.

4. There aren’t any grants out there for our organization.

Probably wrong.  Unless your organization is trying to perform some obscure service, most every cause can gather some support.  If your cause is having a tough time raising support, perhaps you need to develop educational materials about what your organization is doing and how your community can help.

5. Once we receive the grant, we’re ‘home free.’

Wrong.  Seeking grant money is part of a fundraising strategy.  It is not a short-term venture.  No organization dedicated to its mission can do all its cause needs through the funding of one grant.

6. Whether or not we receive a grant depends mostly on how good our grant writer is.

Wrong.  This is a common incorrect assumption.  Raising grant money is a team effort.  A professional grant writer must be reputable, successful, and knowledgeable about potential funders.  They have to be very good at what they do.  But they do not work in a vacuum. Staff, leadership, and even volunteers must be dedicated to the grant writing process, as it often requires proof-reading, fact-checking, research, pulling necessary agency documents, feedback, draft mark-ups, etc.  Also, a grant writer must provide a great grant proposal but the agency’s reputation, track record, relevance, effectiveness at its mission work, financial health, etc., are more important factors to the grant donor.  Grants are awarded based on many attributes, 99% of which are the organization’s – not the grant writer’s.

7. The board does not need to be involved in obtaining grants.

Wrong.  Grantors who choose to meet with perspective grant recipients (some do, some don’t) should be meeting with the highest level representation from your organization, such as board members and the executive director.  This is called peer-to-peer relations.  Treat any potential donor with respect and interest.  This should come from your leadership to demonstrate your care for the relationship with them.

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Recent grants received by our clients include:

$30,000 for a domestic violence organization – $25,000 for general operating expenses and $5,000 for programs for children

$25,000 for another domestic violence organization – $20,000 for emergency shelter and $5,000 for general operating expenses

$10,000 for a high school for at-risk high students – for general operating expenses

 Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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How to Have Your Grant Proposal Not Funded

Don’t ask for a specific amount of money.

Don’t have a board of directors that consists of a diverse group of professionals.

Don’t have a current budget in a generally accepted format.

Don’t have staff members with appropriate qualifications.

Don’t have measurable objectives.

Don’t collaborate with other organizations.

Don’t have recent, accurate financial statements in a generally accepted format.

Don’t complete a Form 990 for the previous year.

Don’t diversify your funding sources.

Don’t explain how your organization is sustainable.

Don’t give contact information for your organization.

Don’t have current and complete information on your website.

Don’t use clear and concise wording in your proposal.

Don’t adhere to funder’s guidelines.

Don’t require that all board members give dollars to your organization.

Don’t explain why your organization’s services are needed.

Don’t explain how your organization is going to try to resolve the issue you’re trying to address.

Don’t send a thank-you letter for a previous grant received.

Don’t track demographics of your clients – gender, ethnicity, and socio-economic classification.

Don’t have more than three board members.

Don’t ask for funding before the project or program has ended.

Don’t submit your proposal before the deadline.

Don’t submit any required report of spending for a previous grant received.

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Recent grants received by our clients include:

$37,000 for an organization that provides gifts and wishes for children who are terminally ill with cancer – for general operating expenses

$30,000 for an agency with a mission to prevent homelessness and to stabilize those at risk in decent, affordable, and permanent housing, and to empower them to solve their own housing problems in the future – for general operating expenses

$25,000 for a clinic that provides medical, dental, and behavioral health services to low-income families – for health services to children

$20,000 for an educational and residential program for adults with intellectual and developmental disabilities – for general operating expenses

$15,000 for a day school for severely developmentally disabled children and adults – for therapy and scholarships

$10,000 for an organization that meets the critical needs of homeless children – to purchase products for homeless children

$10,000 for an agency dedicated to the well-being and education of children from low-income families – $5,000 for a summer reading program and $5,000 for general operating expenses

 

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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Evaluating the Success of Your Nonprofit Organization

** NORTH TEXAS NONPROFIT RESOURCES HAS REACHED $50,000,000 IN GRANTS OBTAINED FOR OUR CLIENTS OVER THE PAST 13+ YEARS. **

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Many funders require that you explain in grant proposals how you measure the success of your nonprofit organization.

Which services are producing adequate results? Which are not? Who is being helped by these services? Who is not? Where are improvements needed? Program evaluations can give good, valid answers to these questions. The key question is, “What does your program intend to accomplish?” The answer should be in your mission statement. An evaluation program will tell you what is actually being accomplished, so you can see how your intentions and performance match up.

Evaluation Methods

Here are some ways to evaluate your organization’s program:

1.  Outcome Monitoring is the regular reporting of program results in ways that can be understood and judged. Outcome monitoring keeps those responsible apprised of performance, allows problems to be detected (and corrected) early, provides proof about program effectiveness, and boosts confidence in the organization’s ability to perform.

Since too much data can hide pertinent information, you should monitor only a few key measures that will focus evaluators’ attention on data relevant to program management. These measures should be easy to interpret and tied to performance expectations.

For example, let’s say your organization is concerned with elementary education, and one of your goals is to improve the ability of children to learn a particular type of information. To measure the outcome of your work, you could give the children a test before they start your program, then administer the same test at the end of the program. Comparing the results of the two tests should help you determine if your program is functioning as it should.

2.  Surveys can help you collect statistically reliable data by asking your clients to rate the services they have received. To obtain quality survey results, you must choose your questions carefully, making sure that each one solicits exactly the type of response that will help you evaluate your program.

3.  Benefit-Cost Analysis attempts to assess service programs by determining whether total welfare has increased because of the program. To perform such an analysis, you need to determine the benefits of the program, place a dollar value on each benefit, calculate the total costs of the program, and compare the benefits and the costs.  Usually, the most difficult aspect of this analysis is placing a dollar value on the benefits. For example, what is the dollar value of saving a human life?

Data Collection Methods

Each organization needs to determine what data collection method serves its needs best. After determining what performance you want to measure, select the easiest, most practical data collection method that will provide the information for your evaluation. One or more of the following may be appropriate for your organization.

1.  Use of Technical Equipment: Data collected directly from a physical device or technical equipment. (Example: computer recordings)

2.  Indirect Unobtrusive Measures: Indicators obtained from records kept for other purposes, or from physical traces left by normal activities. (Example: sales records of “heart healthy” foods sold in the cafeteria.)

3.  Direct Observation: Use by a trained observer of specified formats and codes. (Example: street-corner observations of number of drivers wearing seat belts)

4.  Activity or Participation Log: Brief record completed onsite at frequent intervals by participant or deliverer, using format designed by evaluator. (Examples: participant’s sign-in log, daily record of food eaten)

5.  Organizational Records: Data collection forms routinely kept by an organization for purposes other than for the evaluation. (Examples: patient medical records, time sheets of staff members who record amount of time spent on different activities)

6.  Written Questionnaires: Written survey, usually with structured questions, to obtain data by mail or in-person from providers or recipients. (Examples: number of different activities each participant engaged in during an intervention, provider’s assessment of amount of time they spent on each activity)

7.  Telephone or In-Person Interviews: Procedure in which interviewer asks questions directly to providers or recipients, using either structured or open-ended questions. (Example: interviews with participants in a work-training program concerning training activities and their relevance to job aspirations)

8.  Case Studies: Collection of multiple types of data about a site or example entity, usually by an observer who is on site and uses informal observations and interviews, combined with available data and document review. (Example: case studies of states in their process of implementing a program of systemic change in mathematics education)

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Recent grants received by our clients include:

$500,000 for a local public theater – for their capital campaign

$75,000 for an organization that helps homeless families achieve self-sufficiency – for housing and supportive services to veterans

$50,000 for an agency focused on feeding kids and fueling futures by providing a much-needed third meal of the day to food-insecure children in Dallas Independent School District – for meals

$27,500 for an educational and residential program for adults with intellectual and developmental disabilities – for general operating expenses

$20,000 for an agency that distributes food to homeless and low-income persons – for general operating expenses

$18,000 for an organization that provides assistance to needy families with children in the last stages of terminal cancer – for general operating expenses

$17,500 for an agency that restores and empowers formerly trafficked girls and sexually exploited women and their children – for general operating expenses

$15,000 for an organization that provides shelter and supportive services for children and families affected by homelessness – for general operating expenses

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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Grant Writing Issues

Although grant applications and procedures are generally self-explanatory, many applicants fail to receive grants simply because they ignore the rules altogether or don’t invest the time and effort to properly and professionally assemble their materials.

Incompatible Match

Although there are numerous grant funding sources available, their common goal is to attract applicants who will develop projects that meet the parameters of a specific interest or social cause endorsed by the funder.  Grant packages are often rejected without review if it’s clearly evident that the applicants are ignorant or indifferent to what those interests or causes are.  For example, a funder that makes grants for senior citizen arts enrichment activities isn’t going to write you a check for your campaign to save lemurs.

Unfocused Concept

If you don’t have a well-defined objective and a detailed breakdown of the steps necessary to achieve it in a timely manner, you might as well be telling prospective funding sources that you want the money “just because.”  Applications are often rejected because the concept is too broad, too narrow, too obscure, or too closely emulates services already being provided within the same community.  If the funder can’t see a substantive and pressing need for a project’s existence, they usually won’t approve the grant.

Insufficient Measurement

When a funder plans to underwrite a new project, it wants a reasonable assurance of its success.  Even though the money isn’t going to be paid back, there still needs to be some sort of validation it was well-spent.  Grant applicants often fall short in this regard by omitting any discussion of a methodology for measuring the results through tools such as surveys, test scores, or comparisons.  For example, an afterschool literacy program is a good idea, but might be rejected if the applicant doesn’t identify how the results will be reflected through reading scores, interviews, or an increased volume of books read.

Unrealistic Expectations

Asking for more money than you really need can be a mistake, especially when the economy is in a belt-tightening mode.  Funders are more likely to reject outright a request for a ridiculously high amount rather than engage in any discussions to whittle it down. Further, if a grant package fails to delineate all of the project’s anticipated expenditures and timelines, and instead proposes a grandiose lump sum and an open-ended calendar for implementation, it may only garner suspicion, not enthusiasm.

Limited Experience

Decision-makers routinely reject grant packages if the applicant seems to lack the required knowledge, skills, and discipline to implement the proposed project.  To that end, a lot of emphasis is often placed on review of bios for key players that will be involved.  Those who have prepared themselves for the upcoming responsibility and put as much care into presenting their credentials as they would for a job resume often have an edge over those who are simply winging it.

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Recent grants received by our clients include:

$40,000 for a domestic violence organization – for children’s programs

$20,000 for an organization that transforms inmates and executives by unlocking potential through entrepreneurial passion, education and mentoring – for their workforce and entrepreneurship education program

$20,000 for a school for high-risk high school students that develops urban youth through transformative education, equipping future leaders to impact their communities – for general operating expenses

$15,000 for an organization that changes the educational, emotional, and financial futures of children through creative arts program – for general operating expenses

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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Grants for General Operating Support

n pursuing general operating support grants, you can improve your chances of success by taking the following actions.

Focus on results.

To persuade a funder to provide operating support, you should explain what they can accomplish with unrestricted funds.  It is not enough to tell funders that your organization will “run more smoothly” with operating support.  Instead, be specific about what the money will accomplish, for example by saying that “client intake time will be reduced from four hours to one hour” or “student retention in programs will increase by 20 percent.”

You should also create an operating plan that covers more than just revenue and expense projections.  The plan should detail short- and long-term measures of success and the steps needed to get there.  This type of document also helps you in discussions with funders that have a business background.  People who have created wealth have often done so in an entrepreneurial way, and they might like to support nonprofit organizations that think and act like them.

Stress the benefits of operating support.

You should tell funders why nonprofit organizations prefer operating support.  Among the reasons they typically offer are:  Such support gives your organization more flexibility to spend money where it is needed most, and it enables you to make your organization stronger by improving governance, administration, or staffing.  It also eases fundraising pressure, which reduces burnout and allows your staff and board to focus on your organization’s mission. Unrestricted support also fosters innovation and risk-taking.

Spell out administrative costs.

You might be able to do a better job of getting at least some operating costs covered by grants, including a portion of administrative and other general costs, in your grant proposals for specific projects.  Nonprofits can be their own worst enemy in the conversation about operating support because they don’t fully account for the cost of running a program in the grants they write.  Too frequently, new program grants end up hollowing out a nonprofit’s capacity because the programs require more money to run than the amount they receive.

Don’t compromise.

Too often nonprofit organizations meekly accept whatever a funder gives them, even if it doesn’t match their needs.  For example, if you determine that it will cost $1,000 per client to accomplish a specific goal, and the funder says that it believes the same result can be obtained with $500 per client, you will often accept the grant and try to figure out a way to retool the program.  Instead, you need to go back and tell the funder you need to adjust your outcomes.

You can challenge the implicit assumption at some funders that people who want to do good for others should be willing to go without reasonable salaries or adequate office space. Accepting the status quo drives skilled staff away and hurts organizations.  This is not about proving sainthood.  The question is – How do you build a nonprofit organization that can consistently provide services?

Seek multiple donors.

Because so many funders want you to show that your organization won’t become totally dependent on general operating support grants, you should pursue unrestricted donations from as many funders as possible.

Be persistent.

Keep applying, even after multiple rejections.  Funders sometimes approve grant requests on your organization’s fifth, sixth, or seventh attempt.

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Recent grants received by our clients include:

$25,000 for a clinic for low-income families – for medical and dental services to children

$15,000 for an agency that provides services for abused and neglected children – for a program that provides basic needs for children who have just been removed from their home because of abuse or neglect

$15,000 for a residential program for women recovering from substance addiction – for general operating expenses

$15,000 for a mental health advocacy organization – $10,000 for a new phone system and $5,000 for a program that teaches children how to avoid becoming abuse victims

 

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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