PSGA Ken's Corner

Observations and advice on grant writing from the other side of the desk


1 Comment

PSGA Spring Funders Forum

The spring PSGA Funders Forum is coming up soon. It’s on Friday, May 13th, and there’s still time to register.

Funder Forums are important even if you don’t have a project on your desk right now. Since it can take from three to nine months for a proposal to navigate the process at some larger funders, what you hear at the May Forum may be important to ideas you’ll be working on for late 2016 and on into 2017.

I just did a funders forum in southern Oregon and it reminded me about the questions grant seekers tend to ask. Here are a few examples:

  • Will you fund salaries?
  • Do you make grants to capital campaigns?
  • Will you make a grant for a vehicle?

While many funders fund buildings or salaries or vehicles, they fund them because they believe in what an organization promises to achieve with that tool. In fact, when you ask funders if they will fund a new building, you may be asked, “Why do you need a new building?”

Your answer might be something like, “We need more room to serve more people.” In that case, you might make a stronger case by not asking about building grants, but starting instead with a question like, “Our community needs more after-school activities for middle school youth; would you support a building campaign to help us do that?”

And if you listen for the right things, you may find that you get the answer to your questions before you even ask them. Here’s some ideas about what to listen for when funders make their presentations or when they respond to questions from other grant seekers.

  • Why does the funder make grants?
  • What are the funder’s priorities?
    • Geography
    • Type of program
    • Type of grant
      • Operating support
      • Capacity-building
      • Capital grants
      • Project grants
    • What’s the process for an initial approach?
    • Deadlines, if any
    • Range of grant amounts
    • Frequency of grants

Also, I encourage people to sit at one table that may not be directly related to their current work. Why?

  • The more funders you hear from the better idea you have about how funders work in general
  • Your organization may have a project in the future that is relevant to that funder
  • You may change jobs, and this funder might be important to your work in the future

Finally, just being there as the face of your organization can be helpful in the future when a funder becomes relevant to your work.

Advertisements


Leave a comment

Revenue Models

Miriam Barnett of the Pierce County YWCA and I had the chance to present to the South Sound PSGA group recently. There was a great turnout there to see Miriam.

We got an interesting question from one participant, who asked about why funders seemed to be pressing her organization to have a high level of individual support? That prompted a short discussion about revenue models that seems a good topic to share to this blog’s audience. The question actually raises two issues: what is a good answer to this question and what responsibility do development staff/grant writers have for understanding that answer.

For example, the woman who posed this question mentioned that she felt funders were expecting her organization to bring in 70% or more from individual giving. We didn’t get into the details of her organization, but let’s look at an overview. If you look at all nonprofit revenues for the United States the source of support breaks down like this:

  • 57% comes from Fees;
  • 31% from Government
  • 16% from Philanthropy

Further, we know that philanthropy number breaks down like this by source:

  • Individuals and Bequests provide 83% (about 13% of all revenues)
  • Foundations 12% (about 2% of all revenues)
  • Corporations 5% (just under 1% of all revenues)

All of this information comes from the Fall 2011 issue of the Journal of Public Affairs Education.

Remember, this represents the nonprofit sector as a whole. Field of Service by Field of Service there is a big variation.

For example, the figures for the nonprofit sector include private schools, including universities, as well as health care. Both areas are dominated by fee-based revenue models. Indeed, my work with private K-12 schools over the past 20 years suggests that a viable private school generally has to derive 85% of its operating budget from tuition. It can be difficult to raise, annually, more than 15% to 20% of an operating budget.

Local human service agencies often raise a much larger percentage from individuals; this includes both annual appeals as well as special events.

I’ll admit up front that this information can be difficult to find. But the best data is going to be found by talking with colleagues in similar organizations. This sharing can provide you with data and it’s also provides a way for your organizations and others to share information about how specific kinds of resources are brought to your organizations. For example, what has worked well in running special events? Or are they even worth it for the type of organization you are?

Also, revenue models can vary over time. For example, even though people talk about diversifying their organization’s budget, the facts seem to indicate that as an organization grows, it tends to increase the amount coming from a particular category of support while others dwindle. (see the Spring 2007 Stanford Social Innovation Review article, How Nonprofits Get Really Big)

That corresponds to other work in the field that indicates that as an organization’s budget grows the amount of unrestricted funding, as a percentage of the budget, shrinks while the percentage of restricted monies grows. When you think about it, that only makes sense. A new organization often gets money from a variety of sources willing to support the mission it promotes. There are no well-established programs and donors give because the mission interests them. But as the organization grows it often starts to seek grants and other support for specific projects.

Back to the original two questions: what is a good answer to this question (about support by individuals) and what responsibility do development staff/grant writers have for understanding that answer? I’d suggest the answers start in reversing those questions. Development staff should understand their organization’s revenue model (and share with senior staff such as the executive director) as well as the importance of and dedication to that model as a part of their role in the organization. In the case cited above, there would be two responses, either of which might be great answers if they are in line with the truth.

First, if you understand your model and your organization has embraced it, you evaluate whether the funder’s concern is even valid. If your model agrees with what the funder has posed, great. You can share your organization’s plan for achieving the level of support the funder envisions.

Second, if your model differs from what the funder seems to be asking for the question opens an avenue for discussion. You can share the organization’s model, why it’s valid, and what the organization is doing to pursue that model.

What if there is a big disconnect? What if the funder insists on its model? You could acquiesce, but it’s going to be at a cost of your long-term relationship with that funder. The disconnect is not going to get better by itself over the next year or two. So you risk becoming dependent upon that funder’s money and possibly alienating the funder in the future because you are not going to follow through on their vision for how your organization should support itself.

Underlying all of this is a key to success that we all too often forget in our work; there is no shortage of things for us to do in our jobs in the nonprofit sector. The key to success is making sure that most of the time you’re doing the right things:, the things that are most important.

Understanding and committing to a funding model is a key step for success in development work.


4 Comments

Return of Ken’s Corner

Hello again, I’m back from hiatus.

With the changes in the PSGA main web site and my successful kidney transplant on May 29th, I’ve been absent a while.

It’s been a good time to think about the general state of our local nonprofit sector and some of the tools we all use in our day to day work. During my time off from work in June–if you can really call it that as the month was consumed with trips into Seattle for medical appointments three days a week–I took the time to peruse the Internet looking at private foundation web sites.

I took on this task because the foundation where I work is looking at updating its site that hasn’t really changed since it went live many years ago. Based upon that review of web sites, I developed some basic ideas that I tested with a Survey Monkey survey that many PSGA members responded to during the past two weeks.

Here are a few key points that I want to share back to the grant writing community represented by PSGA that typify the good and the bad that I saw and that were also shared by people who completed the survey.

  • Foundations in general seem to be unsure about who their audience is, though there seems to be good reason to believe that grant writers are the main audience of their web sites
  • To the extent that a foundation’s web site addresses the primary concerns of grant writers, what is said isn’t always clear or fully accurate
  • While grant writers appear to want more detail about grant priorities, it isn’t clear that foundations can always provide that, nor should they
  • There is a feeling that some foundation web sites are overly cluttered, providing information that may be interesting, but not particularly useful to the grant writer

While my survey of PSGA members provided great information about what grant writers looked for when they visited web sites, it doesn’t necessarily prove that grant writers are the main audience. A foundation should assess its audience based upon two aspects. First, if it has a primary focus in a particular subject area, then it may have an audience that looks to the foundation for information on the topic. For example, the Bullitt Foundation is well known for its environmental work.

On the other hand, a foundation whose work is guided by a commitment to a geographic area and that is responsive to a wide range of programmatic initiatives will likely not be a place where people go to look at policy papers or other information on a specific topic.

The comments from grant writers about information regarding process and funding interests presents more of a challenge to foundations. For example, what a foundation has or is funding does not always mean the door is open for more such programs. Say a foundation has a record of giving scholarships each year. If grant writers read that as a willingness to support scholarships they may be disappointed, as the commitment to those programs may satisfy a foundation’s appetite for scholarship giving.

While there is no doubt that foundations can do a better job of describing funding priorities, grant writers should recognize that a foundation tread a fine line between being responsive to community needs that nonprofits rightly articulate and having a resort to an RFP (request for proposal) in order to be clear about what it is willing to fund.

That brings me to a key point about the new Ken’s Corner hosted at WordPress. A couple of years ago we had to shut off the comments because spammers were using it to advertise bogus web sites and products. That is no longer a problem. So I’d ask you to keep the conversation going by using the comment feature below.

With this initial posting I’d ask that you share a foundation web site feature that you particularly liked. It’s okay to use foundation names, as I’m only asking for the positive.

And as always, if you have an issue that you’d like me to address, feel free to comment here or email me at kenristine@hotmail.com.