Author Archives: denverfoundation

Turning the ship around in the harbor: Some thoughts

Some local organizations are thinking about how to balance mission, work and structure with decreasing or vacillating resources.  While many anticipate lower-than-planned for revenues later this year and early next year, they recognize that their beneficiaries still require service.  This recognition, informed by a changing concept of available resources, will require nonprofit leadership to pursue a different strategic course of action. We may well find a coming or existing need to re-group by turning our ship around in a harbor or temporary safe place. 

There are some time-tested guiding principles to transition management in nonprofit organizations which bear repeating here. 

  • Revisit goals, roles and responsibilities while making an assessment of current management capacity and how it should change to fit new goals.
     
  • Incorporate what has been learned in this review and gather input from opinion leaders among all customers, especially donors and volunteers.
     
  • Widely communicate a “game plan”, road map or as much detail as possible on new processes, responsibilities and timelines. Commit to a review mechanism and timetable for follow-up communication.  Communicate the game plan in the context of the mission of the organization.  
     
  • Ensure that cash flows projections and reliable financial records are included in the assessment.
     
  • Once consensus is achieved in a new strategic course of action, create a profile of desired leadership for the future. Examine current leadership against that profile. Recruit and/or staff as necessary.
     
  • Design a “sustainability” plan which incorporates a long-term course of action, new leadership with coordinated management capacity.

I read a valuable piece of advice for leaders from a contributor to this week’s “Chronicle of Philanthropy”, Pat Nichols. He says” Let it hurt you. Salve the hurt of others.  If this recession drags on as long as many experts project, most organizations are obliged to make painful decisions. Although we must serve the mission first, we also have the responsibility to make and convey decisions in ways that demonstrate respect and lessen the pain for others.”

Other resources: www.bridgespan.org

                           www.grantcraft.org

Molly Cannon Stevenson, CFRE, CAHP

Funder/Grantee Relationships: Or, What To Do After You Get That Check

As part of the Colorado Common Grant Revision process, a wonderful piece was developed by  Oz Spies, The Denver Foundation; Amy Rosenblum, Boulder Valley Women’s Health: and Lisa Fasolo Frishman, Social Venture Partners Denver. I encourage folks to review it whenever they get the chance!  – Christiano Sosa, The Denver Foundation.

Funder/Grantee Relationships: Or, What To Do After You Get That Check
Oz Spies, Amy Rosenblum & Lisa Fasolo Frishman

Some people view a relationship between a funder and a grantee as static.  There are set times to interact with a funder – when you apply for a grant, receive a grant award or declination, and when you report on that grant – and that’s it. 

 

There’s another way to look at it: receiving a grant check is an opportunity to build a relationship with a funder.  Long before you send in a grant report, you can interact with the funder and share both good news and challenges.  You have a chance to further engage a funder in your mission.

 

A relationship between any nonprofit and any funder will be unique.  A variety of factors will influence how you interact.  Small, all volunteer nonprofits will likely have different ways of connecting with funders than larger nonprofits with dedicated development staff.  Just as foundations have different grantmaking procedures and policies, they will have different approaches to funder/grantee relationships.  A large, national funder will have a different relationship with a nonprofit than a small, local foundation.  It’s a good idea to ask a funder how best to approach them with questions or concerns – some might prefer written communications while others might welcome phone calls.

 

Here are a few tips based on what’s worked for other nonprofit/foundation relationships:

 

Think about things you already do in which you can include funders.

  • Add them to your newsletter and annual report lists
  • Invite them to relevant events or fundraising dinners (but don’t be offended if they’re unable to come – some foundations have policies against attending certain types of events).
  • Share exciting accomplishments, such as awards you have received
  • Notify them about prominent media coverage

Think about new ways to connect with funders, beyond current activities.

  • Be sure to thank them for your grant.  A hand-written thank-you note to a foundation staff member is appreciated and appropriate.
  • Foundations connect with multiple nonprofits across the community and can sometimes serve as a sounding board for their grantees.  They might know of other organizations you could collaborate with, or organizations in other communities that have successfully dealt with challenges you are currently facing.  If you’re looking for nonprofits that have experienced a specific challenge, consider calling a funder to ask if they could help you connect with an appropriate nonprofit. 

If you experience major changes, good or bad, notify the funder.  A good motto: no surprises. 

  • If you decide to make a course correction in the middle of a funding period, it is a good idea to give your funders a heads-up.  You should call your program officer at the foundation to let them know first.  Also, consider summarizing your conversation in an email or a memo so that the foundation has a hard copy to put into their file and you have confirmation that you have shared changes with the funder.  
  • Any significant transition – turnover at the executive director level, financial challenges, newly launched programs – warrants communication with major funders. 
  • If you’ve received a grant for a specific purpose but would like to use it for something else, you should contact the funder for their approval before diverting funds.  It’s important to follow grant agreement protocols.  Do the same if you’d like to request a grant extension, and the funder allows extensions. 
  • Especially in the case of bad news, it’s best if it comes from you directly.  You don’t want your funders to hear anything negative (for example, about a lawsuit, financial challenges, or if a staff person is in trouble with the law) from the media or through the nonprofit grapevine.  Proactively contact the funder and provide an honest assessment of the situation and what you’re doing to address it.  Funders will appreciate your forthrightness and will get more accurate information from you than they might get through gossip or a news story.   

Respect Your (and the Foundation’s) Resources

  • Nonprofit staff are busy people.  You might have limited time to interact with your funders, and that is okay.  Doing the work of your mission is your priority.
  • Exercise judgment with gifts and formal recognition.  Oftentimes gifts are unnecessary, and many funders have policies against accepting gifts.  Most foundations expect that you use your limited resources on programs and operations.   However, there are other times when recognition – such as a plaque on a room supported by a capital contribution – is appropriate. 
  • Foundation staff, too, have limited time and resources.  They may not be able to meet with you in person as often as you would like them to, or be able to attend all of your events. 
  • Conduct communications professionally and in a timely manner. 
  • Respect deadlines.  Be sure to turn in thorough grant reports on time.
  • Listen to funders and respond accordingly.  If, for example, a funder has said that it is only interested in program support for your organization, be sure to apply for program support, rather than general operating funds.  If a funder has expressed a concern about an area of your work, proactively respond to that concern both verbally and in written format, such as your grant report or next grant application.
  • Be proactive in handling potentially awkward situations.  If you have forgotten to submit a grant report on time or have had an unusually challenging year financially, contact the funder and offer an explanation.

Remember, you know your resources, funders, and relationships with them.  Trust your instincts as you navigate new and existing relationships with foundations.  If you’re not getting an encouraging response from your efforts, reconsider your approach and its relevance to a given funder.

Hiring and Partnering with Inclusive Vendors and Consultants

The Denver Foundation’s internal Inclusiveness Committee created a list of recommendations for our staff to consider when hiring inclusive vendors and consultants.  We thought you may find the following tips helpful:

Avoid a one-size fits all organizational policy
Each of our departments has its unique culture and prioritizes.  We don’t suggest establishing an organizational-wide policy regarding this issue.  Rather, we believe departments should learn from each other and share practices and information.

Balance our value for inclusiveness with our value for reducing costs
We suggest that staff consider discussing our internal values with prospective vendors and consultants.  While the responses to the questions below are important, our hope is that engaging in the conversations will, in and of itself, inspire inclusive behaviors.

Below are some possible questions you can ask when interviewing vendors or consultants:

  • We work hard to reduce waste and recycle whenever possible.  Could you please share some ways you do the same?
  • We work to support local nonprofits.  Could you please share some of your charitable activities?  Do you offer discounted rates to nonprofits?
  • (If the vendor is a catering company)  Do you use local farmers/produce?
  • Some of our caterers post small cards indicating that they use “green” practices.  Would you like to display your inclusive practices at our events?
  • We appreciate your green/inclusive practices, and you come highly recommended.  We would like to partner with you, but your quoted rate is still higher than other bids. Are you willing to reduce the cost if we are able to partner with you in the future?

Develop and maintain an organizational-wide list of past and current vendors and consultants
We believe departments could learn from each other by sharing information about current vendors and consultants.  Some of the benefits include:

  • Sharing money-saving tactics
  • Creating a widespread understanding of the “going” rate for goods and services
  • Encouraging each other to implement item by tracking vendor responses
  • Get bids from a variety of vendors and consultants.  When appropriate, ensure you are soliciting bids from women and minority owned companies.

Although these tips may be specific to our work at The Denver Foundation, we hope you found some that are useful to your organization.

Money Saving Tips

Seth Winnerman, Executive Director, cityWILD

In the following posting, Seth Winnerman of CityWILD offers some cost saving tips that have worked for his organization.  What are some things that have worked for your organizations?

These are some steps cityWILD has taken to save costs over the past year, along with the approximate associated savings per item. cityWILD is a small, grassroots organization. Some of the items are specific to the organization or are very small (there are some big ones too). What I believe this list shows is that there is an endless stream of ways to challenge even the smallest things your organization does in order to make it more efficient, save money, and show accountability to your funders:

 

•     All insurance out to bid; thousands

•     Took drivers off vehicle insurance/limited # of drivers within the organization; thousands

•     Disposed of unused vehicles being insured and registered; thousands

•     cityWILD was not charging its staff Occupational Privilege Tax (this is a Denver only tax); anywhere from $17-50 a month depending on staff numbers

*    I applied for organizational exemption from this tax but was denied

•     Charged employees a reasonable $SO/month for healthcare/dental; $lS0/month

•     cityWILD was not tax exempt on several accounts; office supplies, telephones, etc. Qwest gave us a 24 month credit; $30 month on phones – Qwest and Verizon, plus other purchases

•     Moved to online ordering for office supplies with free delivery; minimal $$ saving, huge in time and efficiency of staff

* Here, you could move to bulk ordering with other organizations to save costs

•     Reduced cell-phone minute limits, removed unnecessary charges and added modern conveniences like text messaging that was not in place; $SO/month

•     Reduced land-line charges by reducing business pack additions back to the standard 3 extras instead of 4; $10/month

* I then moved to Impact Telecom for our phone service and saved an additional $20/month.

•     Moved to electronic newsletters and thank you notes; priceless on $$ and environment

•     Started in-kind donation list in newsletter; so far about $1000 value

•     Stopped renting modem for wireless internet and used donated one; $S/month

* Searched craigslist and called people selling modems and asked if they would donate it to the organization.

•     Switched to online printing companies for brochures, etc.; hundreds in savings, but not environmentally friendly

•     Recycled old materials with some wrong info but otherwise correct by placing stickers over out-dated info; large savings in printing costs

•     Moved banks to reduce fees and get a better interest rate; $30 a month in savings on fees

•     Switched payroll company to reduce fees, get an easier system for staff; about $200 annually

•     Moving merchant service account; will reduce rate from 4+% to 2.S% on credit card charges for our earned income arm.

•     Recreation center passes for students – Denver Parks and Recreation gives free passes to youth if they go to a Title 1; $200 annually

•     Found we were over-charging ourselves on taxes and had a back credit with the State ofColorado for over $3000.

 

For more information visit http://www.citywild.org/303-227-6862/seth@citywild.org

 

 

 

Managing and Communicating with Staff in Tough Times

In tough economic times, honest communication between the organization’s leadership and staff is paramount. Consistently and clearly sharing information about the organization’s financial status will help dispel rumors and make people feel included and informed – the unknown may be worse than the known in many cases.

 

Richard Male and Associates offer the following tip for communicating clearly with staff in stressful times:

“Honesty with staff is always the best policy. Make sure that you are very honest and direct with your staff and let them know quickly what the financial picture is. Describe the financial situation to everyone as a group rather than letting them hear about it piecemeal through the grapevine; you want everyone to hear the same information at the same time.”

 

Although it is often a last resort, some nonprofits will have to lay off staff during these economic times. While it is no one’s first choice, there are ways to communicate with staff and other stakeholders of your organization to ensure that they have a clear picture of what is going on.

 

The Fieldstone Alliance advises organizations to follow these “Do’s” and “Don’ts” in the event of staff layoffs:

 

“When considering potential staff layoffs, DON’T be absent during this time of need; tell different versions of the story to different stakeholders; hide the truth; draw the process out any longer than necessary; provide false hope where no reason for hope exists; assume that employees’ reactions will be the same as yours; use platitudes such as, ‘work smarter, not harder.’

 

When considering potential staff layoffs, DO monitor budgets and costs closely and anticipate shortfalls accurately; create a plan of action that integrates considerations of legal issues, practical issues, leadership and managerial issues, and cost issues; be credible – be sure your words and actions match; anticipate unintended consequences – be aware of the impact of your actions; tell the truth, always and to everyone; realize this process will take time, emotional energy, and money; and create an atmosphere of empathy and hope.”

 

The Minnesota Council of Nonprofits also has a “Q&A” on reducing your organization’s risk during employee layoffs here.

 

The tips above offer strategies to strengthen nonprofit organizations in tough times. Visit the following links for the full text of each article:

Richard Male’s “Rich Tips Newsletter,” November 6, 2008: http://www.richardmale.com/richtips/20081106.htm.

Fieldstone Alliance’s “When Layoffs are Necessary, Nonprofits Need to be Planful”: http://www.fieldstonealliance.org/client/tools_you_can_use/11-05-08_workforce_reduction.cfm

 

For even more information, visit The Denver Foundation’s website and check out “Resources for Nonprofits” for a more complete list of websites and articles offering resources in a variety of areas.

Building Programs in Tough Times

As many organizations see their budgets shrinking with the recession, they may worry about how to keep key programs going. This week’s tips focus on ways that nonprofits can focus on, and even expand, those programs that represent the crucial elements of their missions.

 

Michael Seltzer, author of the “A to Z Survival Guide for Uncertain Times,” offers an alphabetical list of tips and strategy recommendations that he learned from grantees, clients, and other consultants. One tip advises organizations to:

“Be bold. The pressure to scale back programs and to promise less is real. But it’s important, when possible, to find new ways to provide value to clients, funders, and supporters.”

 

Colorado-based JVA Consulting’s Nonprofit Street blog allows the greater nonprofit community to share information related to the functioning of the nonprofit sector in this economy. The post “Coping with Tough Times: The View from Nonprofit Street,” highlights top recommendations for organizations from the staff at JVA, including:

“Look for grants to help your organization build its capacity. These types of grants will help you build capacity through activities like creating a strategic or evaluation plan, or developing a marketing plan that will continue to make your organization more profitable and more attractive to potential funders. Check out the Technical Assistance grants offered by The Denver Foundation.”

 

Finally, Michael Seltzer encourages nonprofits to both build capacity and be bold by collaborating:

“In normal times, many nonprofit leaders view collaboration as the most unnatural of acts. These are not normal times. There is much to be gained, including cost savings and enhanced impact, by working more closely with others.”  

 

The tips above offer strategies to strengthen nonprofit organizations in tough times. Visit the following links for the full text of each article:

Michael Seltzer’s “A to Z Survival Guide”: http://pndblog.typepad.com/pndblog/2008/10/the-a-to-z-nonp.html.

JVA Consulting Nonprofit Street:  http://www.jvaconsulting.wordpress.com

 

The Colorado Nonprofit Association and Community Resource Center, with support from The Colorado Health Foundation and many other partner organizations across Colorado, are conducting a statewide survey on the impact of the current economy on all types of nonprofit organizations within Colorado. The results will be used to provide practical, low-cost tools and resources to help nonprofits in addressing the key challenges, needs, and opportunities. 
 
To complete the survey, please follow the link below. Please complete this survey by 9:00 am on Tuesday, February 10
http://www.surveymonkey.com/s.aspx?sm=h7YvU1gvqQv5ArWcrTuqrw_3d_3d

 

For even more information, visit The Denver Foundation’s website and check out “Resources for Nonprofits” for a more complete list of websites and articles offering resources in a variety of areas.

Planning: The importance of self-reflection, contingencies, and broad thinking and input

Even though the current economic crisis seems huge and immediate, nonprofit organizations can think in the long term about ways to position themselves, react to changing economic conditions, and have the broadest input possible from the constituencies they serve.

The Fieldstone Alliance (also used as a resource in the first post in this series), offers organizations questions to ask to identify “Opportunities in Lean Times,” encouraging self reflection as a way to stay strong through economic turmoil:

“Know thyself. In tough times, it’s even more important to be crystal clear about your mission, your competitive advantage, and your strategies. Having your organization’s mission foremost helps you make decisions that are best for the people your organization serves. You also need to understand your competitive advantage. When undertaking significant strategic work, the organization must know itself (who are we?), its position in the market (Where are we?), and its history (How did we get here?). Then, when it gets caught up in the complex possibilities inherent in most Big Questions (where do we go next?) and in finding successful strategies (how do we get there?), it is less likely to lose its way.”

 

Contingency planning has also been a consistent theme in many of the articles listing tips and best practices for hard times. Thinking in the short- and long-term, the Bridgespan Group encourages organizations to plan ahead for any situation:

“Act quickly, but not reflexively, and plan contingencies. In the current climate, this means taking immediate action: to manage costs aggressively, to do away with nice-to-haves, and to delay undertaking new initiatives. It also entails developing explicit contingency plans, even if your organization is not yet feeling any pain. Waiting to get specific until the wolf really is at the door will not make the choices any easier, but will sharply increase the likelihood that the available options will be fewer and more draconian.”

 

Finally, engaging broad stakeholder input is offered as a key ingredient for nonprofits looking to plan for success in tough economic times. The Fieldstone Alliance advises organizations to:

“Use “kaleidoscope” thinking. If you’re looking for new ideas, but you’re asking for input from only your board and staff, you’re likely to get the same answers that you’ve gotten for the last two years. Here’s how you can start putting kaleidoscope thinking to work: convene local nonprofits to talk about the issues and brainstorm options; network with small and midsize businesses with a personal stake in the local community; and hold community issue forums – discuss community goals.”

 

The tips above offer strategies to strengthen nonprofit organizations in tough times. Visit the following links for the full text of each article:

Fieldstone Alliance: http://www.fieldstonealliance.org/client/focus-opportunities_in_lean_times.cfm

Bridgespan Group: http://www.bridgespan.org/learningcenter/resourcedetail.aspx?id=2638

For even more information, visit The Denver Foundation’s website and check out “Resources for Nonprofits” for a more complete list of websites and articles offering resources in a variety of areas.

Fundraising: Tips for Making the Case and Reaching Out to Donors and Supporters

Fundraising seems to be at the front of everyone’s mind these days – the vast majority of tips and resources currently being posted and distributed for the nonprofit sector focuses on raising funds. Many sources offer advice on making the case to donors, foundations, and other supporters, including the two examples below.

 

In a white paper published by ASAE and the Center for Association Leadership, author Kristin Clark shares advice from Curtis Deane, principal, WoodleyLion Consulting, recommending that nonprofits concentrate on fundraising basics during a recession. Deane advises nonprofits to:

Recognize that recessions can ramp up the urgency levels in favor of your case. Food banks, for instance, might acknowledge that their annual donors are facing economic challenges, but these nonprofits can emphasize that their services are called for now more than ever because of increased need.” 

 

The United Kingdom-based Resource Alliance offers additional suggestions for making the case in an increasingly technology-centered environment:

“Time to look again at our online fundraising. Emergency appeals by email deliver instant results but now you will also find out how good your website is. Sites must be up to date, invite donors in, and offer the kind of immediate donor experience that supporters expect from online engagement. Try mystery shopping a few of your competitor sites to make sure you’re ahead of the game, get the thank you messaging right and offer flexibility in donation levels.”

 

Clark and Deane also encourage organizations and fundraisers to:

Emphasize your annual donor because the people who give you $100 to $1500 each year are the people potentially wondering if they should give you the full $250 rather than just $150 this time. This is important money because it has the most flexibility and involves important, loyal donors who have been with you for several years. Focus on keeping such donors informed and motivated to maintain their support.”

 

The tips above offer strategies to strengthen nonprofit organizations in tough times. Visit the following links for the full text of each article:

ASAE and the Center for Association Leadership:

http://www.asaecenter.org/PublicationsResources/whitepaperdetail.cfm?ItemNumber=32286).)

Resource Alliance: http://www.resource-alliance.org/resources/enewsletter/499.asp

 

For even more information, visit The Denver Foundation’s website and check out “Resources for Nonprofits” for a more complete list of websites and articles offering resources in a variety of areas.

20 Emergency Funding Sources for Nonprofits

The Denver Foundation has compiled a list of tips and strategies that will be presented on this Blog over the coming weeks.  The purpose of the series entitled “Riding the Wave” is to help nonprofits weather the economic storm and continue to meet the needs of the community.  The following is the first posting in the series authored by Fieldstone Alliance of St. Paul Minnesota.

These are revenue sources that can be accessed quickly—usually within 30 days.  Not all of these sources are available to all nonprofits, and some of them carry great risk.  Nonetheless, we hope you find the list useful and thought-provoking.  We urge you to combine ideas for a comprehensive response.

Idea

Opportunities

Your First Step

Cash Flow Management

1. Get grants in the door earlier than the promised date.

An example might be an organization that is in the first year of a three year grant. Request that the grant be converted to a two year grant and allow the organization to draw 150% of the awarded annual grant in each of two years.

Call all of your funders to see if this is a possibility.

2. Speed the inflow of accounts receivable.

Some examples to speed the inflow of cash:
• Invoice promptly.
• Offer incentives to pay early
(e.g. Net 10 receives a 1% discount).
• Write or print on bills “payable upon receipt” or “Net 10 Days.”
• Charge interest for late payments (e.g. 1% interest charge after 30 days).
• Take advantage of electronic technology (ACH), ask clients to be set-up with ACH to speed receipt of cash.
 
 

 

 

 

 

 

Contact the following about these opportunities:
• Your bookkeeper and office manager about invoice procedures.
• Your accountant about “incentives” and payment terms.
• Your banker about ACH technology.
 
 
 
 

 

 

 

Contributed Income

3. Initiate special quick-hit fundraisers designed to generate dollars from long-time supporters.

Your long-time supporters are likely deeply committed to your success.
• Call your donors, suppliers, former board members and former clients; tell them your situation, and ask them for help.
• Increase board involvement in fundraising. Ask your board members to make calls to their contacts.
 
 
 
 
 

 

 

• Discuss these opportunities with your development officer, executive director, and board members. Gather names to contact.
• Check out Fundraising Strategies for Tough Times at the Chronicle of Philanthropy which says to “keep your top donors close” and “don’t ignore people who have stopped giving.”
• See the book Coping with Cutbacks (Chapter 2: How to Engage the Community).
 
 
 
 
 

 

 

4. Solicit grants from discretionary funds managed by a foundation’s CEO, program officer, or corporate giving officer.

Some foundations allow senior staff to make small grants without having to go through the usual full application process. Your greatest chance for success will be with your current funders.

Call each of your current funders to see if this possibility exists.

5. Ask a funder who has awarded a multi-year grant to allow a release of restrictions during the crisis.

A funder might be persuaded to release program restrictions on a current grant to give more flexibility. For example, they may allow a percentage of an existing grant to be diverted to general operating purposes.

• Call each funder to see if there would be a possibility of doing this.
• For more information, read Ease Up on the Restrictions from the Minnesota Council on Foundations.
 
 
 
 
 
 

 

6. Apply for funding from foundations that maintain emergency grant funds.

In response to the meltdown, a handful of foundations have initiated temporary emergency funds. These funds are often targeted to nonprofits that provide basic needs for low-income individuals and families.

• Call your local foundation center or United Way to learn if such funds exist in your area.
• See these articles about three emergency funds:
- Pittsburgh Foundation & United Way
- State of Massachusetts
- Otto Bremer Foundation
 
 
 
 
 
 

 

Earned Income

7. Increase the prices of your products or services.

There are three basic questions to consider:
• Are you covering all of your costs in the existing pricing structure?
• Can the market you serve afford to pay higher prices?
• Will a new pricing model put you out-of-step with your competition?
 
 
 
 

 

 

 

Identify a team that has the knowledge needed to answer the three basic questions.
Here are helpful resources:
Costs are Cool: The Strategic Value of Economic Clarity found at Bridgespan. This article has a good explanation of What are Full Costs.
Allocating Indirect Costs to Programs found at the Alliance for Nonprofit Management web site.
• See Jeanne Bell and Elizabeth Schaffer’s book Financial Leadership for Nonprofit Executives (Chapter 3: Assessing Your Organization’s Financial Health) for tips on cost evaluation.
• Also see Rolfe Larson’s book Venture Forth! (Pricing worksheet, pages 98-99).
 
 

 

 

 

 

 

8. Analyze the possibility of selling what you are now providing for free.

This can most likely be done by searching for new markets for your existing products. For example, if you have a grant to provide free services to clients in your home county, can you sell that service to clients in an adjoining county?

• See Fieldstone Alliance’s article on making money from what your nonprofit already does.
• Also, look at your market; are there other categories of clients you are missing?
• Be sure to watch the cost side of any service expansion.
 
 
 
 
 

 

 

9. Sell valuable information that you have that others need.

• See if the knowledge you or your top staff have can be sold as consulting services to others who may want to provide similar services in other market areas.
• There may be opportunities in selling your organization’s intellectual property (don’t give it away) to those who need it by way of consulting services.
 
 
 
 
 
 

 

• Do an informal market survey: will people be willing to pay for your knowledge, and who else out there is selling similar services?
• See Carol Lukas’ book Consulting with Nonprofits for practical consulting advice.
• Talk to your attorney about the possibilities for protecting and licensing your intellectual property. If you can’t afford an attorney, go to LegalCORPS for help.
 
 
 
 
 

 

 

• Creative Commons has free copyright and IP tools online.

10. Sell the “back room” services that you already provide for your own organization to others.

Backroom services might include being a fiscal agency for new nonprofits, and offering human resource and accounting services.

• Look to other organizations such as MSOs that already provide this type of service to see if there are opportunities in your area.
• Go to your state’s council of nonprofits for more information on fiscal sponsorships. Here’s a sample agreement.
 
 
 
 
 
 

 

Debt Financing

11. Obtain short term loans (secured and not).

Secured debt is a loan that is backed by a marketable real asset (real estate or equipment) that can be sold if loan cannot be repaid.
Unsecured debt is not secured by marketable assets and most often has less favorable terms than a secured debt. A bridge loan is one type of unsecured debt.
 
 
 
 
 
 

 

Discuss this option with your organization’s controller or finance manager and banker. Check your organizations’ credit score prior to applying for a loan. See Nonprofits Assistance Fund’s article Borrowing Funds for more information.

12. Obtain a new or expand a current line of credit (LOC).

A LOC is an “open loan” available up to a maximum amount that you draw upon as needed. Nonprofits often use LOCs to manage cash flow.

Discuss this option with your organization’s controller or finance manager and banker. See Nonprofits Assistance Fund’s article Using Lines of Credit, Loans, and Mortgages for more information.

13. Borrow against commitments for future revenues.

If you have future scheduled government payments, you may be able to borrow against these payments. Also, an individual’s promise to donate to you on a future date may apply to this situation.

Discuss this option with your organization’s controller or finance manager, your development officer, and banker.

14. Reach out to other nonprofits with loan funds for cash flow purposes.

There are quite a few nonprofits offering loan funds for cash flow purposes.

Research these opportunities in your area.
• Nonprofits Assistance Fund has resources available to fill cash flow gaps. See the Transformational Lending section of their web site where you’ll find a borrowing guide and loan application.
• Nonprofit Finance Fund offers Loan Products.
Community Development Financial Institutions Fund is a program within the U.S. Department of the Treasury that awards money and tax credits to community-based organizations that work in low-income communities. Their site includes a searchable database for CDFI approved organizations by state.
 
 
 
 

 

 

 

15. Obtain a loan from a foundation’s emergency loan pool.

A few regional and community foundations are instituting such loan funds.

Call your local foundation center or United Way to learn if such funds exist in your area.

Existing Assets

16. Sell assets.

• It may be appropriate to sell assets that your organization is no longer using or does not expect to use in the future such as buildings, vehicles, and equipment.
• You may find that you can then lease-back those same assets.
 
 
 
 
 
 

 

Talk to your controller or financial manager.

17. Sell receivables.

Also known as factoring, your organization sells its receivables or invoices to a “factoring agent” at a discounted rate. In return, it receives a percentage of the receivable or invoice in cash immediately, and the remaining portion of the invoice is received after the invoice has been paid, less a factoring agent fee.

Determine if it is the right cash flow method for your organization. Read Selling Receivables to Free Up Cash Flow and Selling receivables can smooth cash flow woes for some important tips on choosing the factoring method.See also: Businesses turn to factoring to counter cash crunch and Factoring sector picks up as credit climate tightens.

18. Reevaluate your investments.

Before things get worse, now may be a good time for your organization to redirect your investments.

• Discuss this option with your controller, financial manager, and investment broker.
• Look at your time horizon and risk tolerance. The Nonprofits Assistance Fund reminds us of investment guidelines for nonprofits in their article Jittery About Investments?
 
 
 
 
 
 

 

19. Rent office space or equipment to others.

Your organization may have unused office space, printers, or services that you are not using, which you could rent to others.

• Talk to the office manager.
• What stakeholders may be interested in renting office space or equipment? Talk to your board members.
 
 
 
 
 
 

 

20. Spend down reserves.

Typically, an operating reserve is a nonprofit’s savings account— something to tap for unbudgeted expenses or the timing of cash flows, but not for income shortfalls. Nonetheless, in a crisis this option must be considered. Before doing this, be sure you have a plan for restoring the reserves when conditions improve.

• Talk to your board, financial manager, and controller when considering this option.

• Nonprofits Assistance Fund has some good information on Operating Reserves if you are considering this option.

 Resource:  www.fieldstonealliance.org

For a list of local resources for nonprofits, click here.

 

Capacity Building Needs Survey

 

Community Resource Center

Want to help CRC and our nonprofit partners learn about your organization’s capacity building needs and enter to win an iPod Shuffle, Tattered Cover gift card, a CRC class, or a subscription to the CRC Colorado Grants Guide?
 
Take our survey now!
Dear nonprofit colleague:

 
The Community Resource Center and our nonprofit partners are interested in learning more about your needs for training, consulting, and other nonprofit capacity building services.  Therefore, we are conducting a survey to learn how we and our partners can improve the services we provide to help nonprofits become more effective, strong, and sustainable.
 
We request your participation in this survey, which will take about 10 to 15 minutes of your time.  In return, you will be able to enter a drawing to win an iPod Shuffle, a Tattered Cover Gift Card, one of three free CRC class registrations (valued at $60), or one of three free subscriptions to the CRC Colorado Grants Guide (valued at $150).  
 
We encourage participation from anyone with perceptions about capacity building needs within the nonprofit sector.  To take the survey, please click here.  Please complete the survey by Monday, November 3, 2008.

 

Because we need broad participation from across the state to gather useful information, you are welcome to pass this information and survey onto your nonprofit colleagues within Colorado. 

If you would like to learn more about this survey or the results, please contact me at 303-623-1540 or fischler@crcamerica.org.  
 
Thank you for your willingness to help us in achieving our mission of creating opportunities, tools and strategies to develop nonprofits and community groups to strengthen Colorado.  Your participation in this survey will help us in achieving this mission.
 
Sincerely,
Sarah Fischler Signature Corrected
Sarah Fischler
CRC Director of Consulting
The Community Resource Center provides a variety of services to help nonprofit organizations and community groups achieve their missions, including trainings, consulting, leadership development, technology services, and other programs.  

 

To learn more about our services, please visit www.crcamerica.org.