tag:blogger.com,1999:blog-24948423.comments2024-02-27T07:19:26.165-08:00The Nonprofit Consultant BlogKen Goldsteinhttp://www.blogger.com/profile/14352088132228110064noreply@blogger.comBlogger288125tag:blogger.com,1999:blog-24948423.post-26452239351125348382021-04-26T13:09:16.319-07:002021-04-26T13:09:16.319-07:00Thank you for your comment. Yes, this post focused...Thank you for your comment. Yes, this post focused on financial giving, but the other contributions of board members are vital as well. Whether it's put as "time, talent, and treasure" or as "work, wisdom, and wealth" giving is only a part of the formula.<br /><br />I also hear you loud and clear about funders (finally) paying attention to whether the board reflects the community served (this post is from 2009), and how that is now of higher importance than the amount any single board member contributes.Ken Goldsteinhttps://www.blogger.com/profile/14352088132228110064noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-78383104597368645682021-04-26T12:52:14.765-07:002021-04-26T12:52:14.765-07:00I appreciate your recognition that not all Board m...I appreciate your recognition that not all Board members are in a financial position to give a significant amount of money to an organization and I wish conversations about Board giving could also include some way to quantify the value of other forms of support. Board participation should extend well beyond a checkbook (or Venmo, I suppose, is more appropriate this day and age) and there should be space on every Board that allows for talent and hands-on work to be viewed with as much benefit as an annual donation. Without that space, organizations miss important opportunities to attract fresh thinking, extended networks, diversity, important perspectives from the population being served, and young professionals. It is true that grant funders sometimes ask about Board giving, but I am seeing the more common questions lately, "How are the demographics of the community/clients your organization serves reflected in the composition of your Board". My guess is, if everyone on your Board can easily right a check for a grand every year, there probably isn't a ton of diversity going on. Of course, those thousand dollar checks are important to an organization, but let's not undervalue support and efforts that don't come in the form of dollars.Anonymoushttps://www.blogger.com/profile/03491638165328120351noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-14273077169256774302021-02-10T17:19:59.753-08:002021-02-10T17:19:59.753-08:00There actually is a legal problem with charging a ...There actually is a legal problem with charging a client on a contingency basis. It's a kick-back. An attorney who works on a contingency basis isn't dealing with a foundation, who has specific rules against kick-backs or having the writer's fee built into the cost of the grant. If your funding source is a government agency, a contingency fee could land you and your client in jail. Anonymoushttps://www.blogger.com/profile/10716047035391421945noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-29363597450750181362019-03-05T12:15:47.023-08:002019-03-05T12:15:47.023-08:00Where possible, it is best to pay fundraisers a se...Where possible, it is best to pay fundraisers a set fee or salary. However, if you look to the example of legal contingency fees, it takes a number of important considerations into a balancing act. Legal contingency fees are only allowed under certain circumstances. Legal contingency fees allow for a situation where...for example, someone has been harmed but does not have the money to hire a lawyer. Without a contingency fee arrangement, this person would have no access to a legal remedy...and the person/company who caused the harm to not be held responsible. With the contingency fee arrangement, a lawyer can evaluate the case, see if it is strong, and decide to take it on (knowing that he/she will only be paid if the lawsuit is successful). The provides a valuable resource to people who cannot afford legal representation.<br /><br />I believe that the fundraising community could learn a lesson from the legal community and allow for exceptions where a contingency fee or commission with cap is acceptable and deemed ethical. I believe that the AFP should include exceptions that state that contingency fees are ethical up to a set cap where the nonprofit is unable to pay for the fundraiser otherwise. For example, contingency fees could be allowed where the nonprofits previous year's revenue or contributions were under a set figure (say $200,000) or where the nonprofit is less than 5 years old. Just like a lawyer, the fundraiser could evaluate the strength of the nonprofit's story and programs and decide to take on the project on contingency if he/she believes that his/her fundraising work has a high chance of success. The IRS could then have such nonprofits include this information on their 990s with a section to explain why the nonprofit chose to use a contingency fee arrangement. This would balance the interests and needs of nonprofits, donors, and fundraisers.Balancing Interestshttps://www.blogger.com/profile/10947522908784511073noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-3851130711381689082018-07-10T12:20:31.531-07:002018-07-10T12:20:31.531-07:00It is mid-2018 and I am reading your blog post for...It is mid-2018 and I am reading your blog post for the first time. The AFP is full of you-know-what. I have read and re-read their laundry list of fake issues associated with contingency payments, and their opposition is a bunch of elitist, snobby junk based mostly on "feelings." Feelings have zero place in an American culture that is based on work-risk-reward. When you hire someone to fix your bathroom, they either do it right and get paid, or they do it wrong and do not get paid. The same principle holds true for fundraising. As much as AFP wants to elevate their do-gooder work to some holy status, the simple fact is that most non-profits cannot afford to pay up front, they cannot afford to pay for work that does not at least pay for itself, and they cannot afford to take risks without a clear view to compensation. Lawyers work on contingency fees, fundraisers can, too. Enough with this elitist nonsense. Go raise us some money! Unknownhttps://www.blogger.com/profile/03129958160892104744noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-42459397186231163172017-11-27T06:50:06.450-08:002017-11-27T06:50:06.450-08:00Thanks for your question. Looking over this post (...Thanks for your question. Looking over this post (I wrote it 11 years ago, needed to refresh my memory!), my opinion now is basically the same: There's nothing wrong with asking employees to be part of fundraising, and nothing wrong with some incentives to make it fun.<br /><br />Where it goes wrong is when it loops back to the area of employee evaluation, whether explicit or implied.<br /><br />If the pressure to get donations from family/friends is such that a staff person feels their job is in jeopardy if they don't, you've got trouble. At worst, a potential lawsuit that this is a scheme to get around labor laws (either minimum wage or a kickback). At best, it's a morale killer - Nobody who's been working their tale off for sub-standard wages wants to be told, "If you really cared about your job you'd bring in more donations."<br /><br />Involve staff in fundraising, and provide opportunities to help out, but anything that looks or smells like a requirement is bad news.Ken Goldsteinhttps://www.blogger.com/profile/14352088132228110064noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-77871632846219099832017-11-27T06:40:37.571-08:002017-11-27T06:40:37.571-08:00How about when employees are asked to solicit ...How about when employees are asked to solicit donations from their personal friends and results are competitive??Unknownhttps://www.blogger.com/profile/13599270569138831799noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-82445169349452495682017-07-03T16:36:49.584-07:002017-07-03T16:36:49.584-07:00Hi Eric,
I've been a volunteer at a tiny non...Hi Eric, <br /><br />I've been a volunteer at a tiny non-profit, a founder, and I used to be a grant writing consultant, so I've sort of been on all sides of this equation.<br /><br />I'd recommend that if you are running a small non-profit that can't afford to pay a grant writer, then one or two people in your organization should invest some time to learn how to write those grants themselves. There are free trainings on the web, and lots of books. Usually in small orgs, it's the ED or the founder who does this. Often, they're going to end up doing a better job than a contractor anyway because they know the big picture and all the details and are more passionate about the work. <br /><br />I'd also say if you have such limited resources, maybe don't start with grants. Maybe use your network and grow a fundraising event instead. It can often bring in more reliable resources and introduce more supporters to what you're doing. Plus it doesn't come with the reporting requirements. Grants aren't always the best option.<br /><br />I have to agree that it's not fair to expect someone who does this work professionally to not get paid for their work because you don't get funded. It doesn't take much less work to write grants for small organizations. If someone doesn't care if they don't get paid, then they should just volunteer outright instead.Mary Fullerhttps://www.blogger.com/profile/02992818928602357172noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-13145198003425869152017-07-03T16:24:09.625-07:002017-07-03T16:24:09.625-07:00Hi Eric,
I commented on this thread back in 2008...Hi Eric, <br /><br />I commented on this thread back in 2008.<br /><br />I'm now a co-founder of an organization, and in a past life helped run an all-volunteer organization with a grand total budget of $25,000. <br /><br />I've also worked as a grant writing consultant, so I've sort of sat in both seats.<br /><br />I'd say that if you're running a small nonprofit and you want grants to be a big part of your strategy, you probably need to build this skill internally. Often a founder or ED of small orgs are the ones that do this work. There are free trainings online that can help get the basics down. If you're all volunteer, find a volunteer who will create a template for you and help you get all your attachments together to make it easier to apply to multiple grant cycles. That's how I got started professionally- volunteering while I was in grad school.<br /><br />Though an experienced grantwriter is valuable, it's not rocket science and if you don't have a big budget, you might not need to pay a specialist to write one for you. Or maybe throw a fundraiser and pay a professional one time to build you a really good template. But I still pretty much agree about working on spec. It's not cool to expect someone to not get paid for their work if they're doing it for a living. If they don't care about getting paid, then they should volunteer.<br /><br />Finally, I'd say that if you're running a small volunteer-only org, then maybe grants aren't the best option for you. Depending on what they are, they may require reporting, and if you don't have the capacity to write a grant, then maybe you don't have the capacity to report on one either. It's worth being thoughtful about what the right kind of revenue is right for your organization. I went to a conference lately and met several orgs who just run peer-to-peer campaigns and grants is a tiny portion of their budget, and to be honest, I was really jealous!Mary Fullerhttps://www.blogger.com/profile/02992818928602357172noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-56509216464141051092017-06-11T13:14:10.142-07:002017-06-11T13:14:10.142-07:00Hi Ken,
First, thanks for hosting this conversatio...Hi Ken,<br />First, thanks for hosting this conversation. <br /><br />I know this is an old post, but if you’re still around can we go back to Courtney’s inquiry from 2/2012? I volunteer at a NP with a very similar situation (which I think is pretty common), and I don’t think her question was sufficiently addressed. Courtney spelled out the situation in good detail so I won’t repeat it here, but the short was that many NPs who rely on volunteers and member donations have NO extra capital lying around to pay for grant writers up front. As in: zero. For a NP with no money, it makes perfect sense to hire a writer on commission, else how are you supposed to apply for the grant? <br /><br />But then the AFP code frowns upon this seemingly only option with an “ethics decision.” The code thus creates a catch 22, banning cash-strapped NPs banning from applying for money, simply because they are cash-strapped. <br /><br />Back to Courtney’s question: you replied by stating: “are they paying other staff? Are they paying other service providers? Why is your work worth any less than anybody else?”<br />I don’t know about her, but where I work the answer is “No!” If you’re literally stretching to pay rent (we’ve been there), then nobody’s getting paid. <br /><br />Later you remark that “Early on, it's fine to use volunteers for this function, but at some point, if they're going to be sustainable, they need to develop the capacity to consistently raise money - and that requires an investment.”<br /><br />Can you explain this more? Particularly what you mean by “investment” Investment from whom? From where? Are you referring to private donations? Kickstarters? Bake sales? <br /><br />I understand that the AFP is trying to protect grant writing as a profession, and for large NPs with a permanent salaried staff I can see how this makes sense, but I’m looking at this from the other end, and from my perspective it really looks like a crap deal for the little guys who are struggling to stay afloat. <br /><br />I apologize if I sound cranky, but the AFP code seems incredibly tone deaf towards what smaller NPs go through on a daily basis. Please let me know if you can see any way out of this predicament. <br /><br />Thanks,Erichttps://www.blogger.com/profile/07747683621924936860noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-15443515291331825182017-01-19T10:02:32.731-08:002017-01-19T10:02:32.731-08:00I'm sorry to have offended you. My intent is n...I'm sorry to have offended you. My intent is not to offend or argue. The original post was simply stating why I don't work on contingency. In the years since, this post has taken on a life of its own with great arguments and points made on each side of the issue.<br /><br />For me, the bottom line remains that nonprofits are held to a high standard to retain their special tax status, and as a result, practices that are perfectly fine and legal and ethical in other sectors are frowned upon or considered unethical in our sector.<br /><br />The AFP Code of Ethics has been referenced countless times in the above post and many comments. Also of note are IRS rules against inurement, and whether they apply in these cases.<br /><br />And then there's the simple truth that the funders to whom you are sending grant proposals to frown on the practice (so do you lie about how the money will be spent, or disqualify yourself by being honest?).<br /><br />Again, I apologize for any personal offense, but I strongly recommend against grant writers being paid on contingency.Ken Goldsteinhttps://www.blogger.com/profile/14352088132228110064noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-76147015619657642912017-01-18T18:34:20.658-08:002017-01-18T18:34:20.658-08:00A KICK-BACK is a "payment made to someone who...A KICK-BACK is a "payment made to someone who has facilitated a transaction or appointment, especially illicitly." Synonyms: bribe, payment, inducement. Many lawyers operate on contingency fee basis for their personal injury clients -- in many cases, the clients could not afford to pay an hourly rate and the lawyer is so confident in their abilities to win the case, they will take it on "contingency." I find your comment comparing "success fee" or "contingency fee" to a "kick-back" as completely warantless and inflammatory.<br />Anonymoushttps://www.blogger.com/profile/12116604519942002370noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-12028870267637772652016-09-29T16:22:31.192-07:002016-09-29T16:22:31.192-07:00Hopefully, before you agree to pay somebody $100/h...Hopefully, before you agree to pay somebody $100/hour, you would ask for a reference or two (or three). And, hopefully, if you're the manager who hired somebody to submit grant proposals, you'd be reviewing drafts before they're submitted, and getting copies of anything they send out on your behalf.<br /><br />If you're actively managing the contract, and working with your grant writer, you would know well before you hit 150 hours whether or not they're doing acceptable work.<br /><br />This advice should help you avoid scams (or just lousy grant consultants) whether you pay a percentage, or follow industry ethical standards and pay the appropriate fees.Ken Goldsteinhttps://www.blogger.com/profile/14352088132228110064noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-40060707219108801232016-09-29T15:17:47.189-07:002016-09-29T15:17:47.189-07:00As a charity we pay someone $100 a hour they say t...As a charity we pay someone $100 a hour they say they worked 150 hours, how do we know they did or even truned anything in and they take the money and run, or do not raise any money so whay should a charity pay them. With all the scams out there this is a easy one for someone to scam the charity, Seems to me the only one that wins is the grant writer. I know the response will be they are professionals.But in todays market they should work on a percentage.West USA Realty of Prescotthttps://www.blogger.com/profile/11553001301169826642noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-55440292105506327052016-01-11T15:01:23.148-08:002016-01-11T15:01:23.148-08:00The facts are unique (D is the registered agent, n...The facts are unique (D is the registered agent, not just the grantwriter), but this IRS Ruling suggests that taking a commission as a grantwriter might constitute private inurement (page 9) or cause the charity to be operate for "other than public purposes." https://www.irs.gov/pub/irs-wd/0929019.pdfJenhttps://www.blogger.com/profile/14831984860920532366noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-87266957805339685272016-01-04T07:13:17.437-08:002016-01-04T07:13:17.437-08:00Great points.
California (and probably other stat...Great points.<br /><br />California (and probably other states) has similar "fundraising counsel" registration rules, with distinctions between mere "counsel" and "paid solicitors."<br /><br />And, yes, certainly against the spirit of IRS rules on receiving a personal benefit from a charitable contribution, but I don't know if there's any examples of the IRS actually following up on commission-based grant writing as a technical violation. Would love to know if they have!Ken Goldsteinhttps://www.blogger.com/profile/14352088132228110064noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-77873697730344142312016-01-03T12:54:58.699-08:002016-01-03T12:54:58.699-08:00In Connecticut, the Connecticut Solicitation of Ch...In Connecticut, the Connecticut Solicitation of Charitable Funds Act, (CGS Chapter 419d, Section 21a-175 through 21a-190l)requires that anyone soliciting funds in this way must register with the State. Further, the application you describe would make the grant writer a "fundraising counsel", "paid solicitor", or possibly "commercial co-venturer" and could trigger regulatory requirements, including a surety bond.I'd check the charitable solicitation act in your state. Receiving a personal benefit from a charitable contribution is against the spirit of the IRS rules governing exempt organizations and may violate IRS Rules, trigger reporting requirements or have a similar effect under state laws.Jenhttps://www.blogger.com/profile/14831984860920532366noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-50499953792657881532015-05-07T11:42:01.354-07:002015-05-07T11:42:01.354-07:00Big problem and, unfortunately, a typical one. A b...Big problem and, unfortunately, a typical one. A board like this is not likely to either listen to the executive about this problem, or change quickly.<br /><br />It's best to bring in outside assistance in long-term board training and maybe coaching of the board chair (or whomever is the root of the problem).Ken Goldsteinhttps://www.blogger.com/profile/14352088132228110064noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-76971672186895291312015-05-07T11:33:06.794-07:002015-05-07T11:33:06.794-07:00What if the board can't distinguish between su...What if the board can't distinguish between supervision and micro management? This has been a huge problem in our organization.Anonymoushttps://www.blogger.com/profile/05900496434057951222noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-20866954594474266992014-09-20T20:32:55.728-07:002014-09-20T20:32:55.728-07:00Well saidWell saidLegendary Movementhttps://www.blogger.com/profile/15463725146483871027noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-32519983257854847742014-03-24T07:41:26.331-07:002014-03-24T07:41:26.331-07:00I love that, "Free Empathy." Wonder if a...I love that, "Free Empathy." Wonder if anyone took him up on it. Unknownhttps://www.blogger.com/profile/02031395131727135394noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-86844348359380365152013-11-08T14:47:10.452-08:002013-11-08T14:47:10.452-08:00Hi Brenda,
Unless somebody else can surprise us a...Hi Brenda,<br /><br />Unless somebody else can surprise us all by digging up the section of the legal code, I would think it is perfectly legal to do as you describe. I would also say that it is ethical as well. <br /><br />What my original posting was about, was whether or not freelance grantwriters should be paid a commission based on a percentage of each grant awarded. The AFP code of ethics says this is an ethical no-no (although also legal).<br /><br />The situation you describe is whether a regular salaried development person can include themselves in a grant. In this situation, we will assume your salary is set and paid regardless of how many or how few grants you pull in. This is not a commission, and so passes the AFP ethical test.<br /><br />The bigger question is where in the grant you would put that in. Depending on who the funder is, and what you are asking for, a line-item for a grant writer may or may not fit into something the funder is willing to accept.Ken Goldsteinhttps://www.blogger.com/profile/14352088132228110064noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-87274344148157083052013-11-08T12:03:04.526-08:002013-11-08T12:03:04.526-08:00Will someone please answer the question below and ...Will someone please answer the question below and provide the law. Thank you.<br /><br />Is it illegal and/or unethical for a contracted, full-time salaried, public school district grant writer to write himself a paid administrator's position within a grant for which he has been paid to write.Anonymoushttps://www.blogger.com/profile/10012777310221113509noreply@blogger.comtag:blogger.com,1999:blog-24948423.post-34894052325380628972013-08-21T13:33:26.354-07:002013-08-21T13:33:26.354-07:00Thanks Ken for the post! I agree that nonprofits n...Thanks Ken for the post! I agree that nonprofits need to make an investment in updating their websites and social media tools to keep them current. Organizations need to recognize the shift in how donations are being made, which is via websites and text messaging. In order to keep continued support, nonprofits should feel very encouraged to share how the donations are being used to further their mission.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-24948423.post-52871770266437823772013-05-30T00:16:10.086-07:002013-05-30T00:16:10.086-07:00HI Ken
Thanks for some very good thoughts, I do t...HI Ken<br /><br />Thanks for some very good thoughts, I do think you are correct that the "clients" story is important, it is the basis of the whole thing!! But on the other hand, what is powerful about focusing on the personal story in charity crowdfunding is that it is easy to fund that crucial non-earmarked money a charity needs. When the focus is on "I'm running a marathon" there is already plenty of good communication, and the focus can be moved away from the charity, and thus it is easier to crowdfund non-earmarked money (which sets charity crowdfunding other areas where the project is in focus)<br /><br />For those charities that are based in mainline europe the above site is not of much use. So for those besides I will leave a link to interview with BetterNow at crowdsourcing.org about crowdfunding charities in Europe http://www.crowdsourcing.org/editorial/crowdfunding-charities-in-europe-a-qa-with-betternow-/25823 Anonymoushttps://www.blogger.com/profile/08344089343597777320noreply@blogger.com