The Waiting is NOT the Hardest Part

...  A Proposal for Uniform Feedback of Grant Application Denials

From Guest Blogger: Brian Leitten. Mr. Leitten is an experienced non-profit leader and consultant, chief executive and attorney. He provides consulting services nationally to non-profit and healthcare leaders from his office in Port Orange, Florida. He can be reached at Leitten Consulting - consulting.leitten.com. 

Every year I assist clients in preparing grant applications that are submitted to 30-50 different private, community and corporate foundations and government agencies. The grant applications could be as simple as a letter of intent or a letter introducing the non-profit and explaining the grant request; or it could require a multi-page write-up with a significant number of supporting documents. Often, the foundation or agency has a very particular format that the application and supporting documents and it is generally the case that no two grant applications require exactly the same information presented in exactly the same format. In short, uniformity has not yet come to the grant application process.

Once the hours or days of preparation have been invested, the grant application is thrown into a virtual 'black hole'. After submitting the application, applicants wait to receive a decision. Most foundations are excellent at acknowledging receipt of a grant proposal, but from there communication falls off a steep ledge. Some grantmakers do provide a target date for making decisions on submitted grants; many do not. Non-profits can do nothing but wait. Many times they never hear back from a grantmaker on the outcome of the consideration of their application. I know of one application that was approved, a check was mailed (to the wrong address) and eventually canceled because the grantmaker (without bothering to inquire) assumed that the money wasn't wanted.

I find myself disagreeing with song writer and rock musician Tom Petty when I hear him sing 'The Waiting is the hardest part'. For me and the clients I serve, the waiting is the 2nd hardest part. The hardest part is receiving a denial letter with no explanation or feedback about why your proposal was not funded. Unfortunately, the typical denial communication goes something like 'Thank you for your application. We receive many more applications for support than we are able to accommodate and we will not be able to provide funding for your request'. This type of response is nothing more than a forced nicety and provides no help or feedback to the grant applicant. Without feedback, non-profits are unable to improve their grant submission process. This means that they could continue to submit grant applications containing flawed elements with no awareness of the problem and that grantmakers could continue to receive and waste time reviewing grant applications that have no chance of success.

It struck me that adding one rather simple step could greatly improve the feedback loop and eliminate the costly waste that continues to hamper the grant making system. I propose adoption of a uniform, one -page feedback sheet that would accompany all denial letters and emails. The feedback sheet would contain a list of common reasons for denial that could easily be checked off without adding any significant time burden to the denial communication process. It's likely that one or two issues led to a decision not to fund, and the checklist would be an easy and convenient way to deliver that message. This would provide extremely valuable information to the applicants that can help them improve future applications and not waste time seeking grants for which they have no chance of receiving. For the grantmakers, it would provide a wonderful opportunity to improve the quality and relevancy of future applications and avoid significant amounts of future time spent reviewing applications that they will end up turning down.

I submit the following one-page feedback sheet as a starting point for creating a uniform communication tool for grant application denials:

(click here to see full-size image)

This kind of uniform feedback would be a major step forward in enhancing the grant application process for non-profits and the foundations and agencies that support them. It would eliminate or reduce a significant flaw in the current process and return "The Waiting' to the top of the 'Hardest Part' list.

Nonprofits Talking Taxes

Earlier this month I attended a workshop at the Community Foundation of Santa Cruz County called "Show Me the Money: Nonprofits Talking Taxes." The workshop was conducted by Kim Klein, a well-known, much respected, and quite beloved fundraising consultant and trainer.

But "talking taxes"? Kim Klein is the grassroots fundraising guru, not an economist or policy wonk. But, as she explained at the start of the workshop, over the past several years of the recession-that-will-not-end, with each round of budget cuts at all levels of government, more and more public institutions were turning to private foundations and individual donors to fill the gap.

Nonprofits that have always relied on those sources were suddenly in competition with schools and libraries. Not to mention those nonprofits who had been reliant on government funding suddenly got the message about diversifying their fund development plan and were also doing their first fundraising letters and grant proposals. Of course, the funds available did not grow. In fact, many foundations (and many individual donors) have less resources to meet these rising needs.

Meanwhile, the nonprofit sector as a whole has been remarkably silent in the public discussion of government budget cuts, tax cuts, and the unwillingness of many to talk about new revenue. Those behind Nonprofits Talking Taxes believed that it's high time for the sector to get involved in this debate as if our organization's lives depended on it, because that's not far from the truth.

This is not simply a fight for those nonprofits who receive government funding; this is about all of us who care about what direction our society and our communities are heading. As has been said by many, a government budget is not simply a financial document, it is a direct reflection of a community's values. So what does the California State budget say about our values, that it sacrifices the jobs of teachers rather than inconvenience corporations?

The workshop was not all gloom and doom. Quite the opposite. Through humor and group participation, we learned more about the state budget, taxes, why all nonprofit professionals should care about it, and left feeling optimistic; that we can have some control and say over the future direction of our state.

For an example of how humor is used to talk about the topic, click here to take the "Nonprofit Tax Quiz" that Kim created (on Blue Avocado).

These workshops are free, and are available to any nonprofit group in California. For those elsewhere, I'm sure they'd be happy to provide some guidance to creating a Nonprofits Talking Taxes curriculum for your state.

Learn more at the Nonprofits Talking Taxes website.

Managing Expectations Begins with Your Members and Clients

From Guest Blogger: William Biggs. William is Communications Officer for Safe Haven, Inc., in Thomasville, Georgia, a free-lance communications and strategy consultant, and in his spare time, a part-time graduate student. View William's LinkedIn profile, or email him at william AT safehaveninc DOT org.

The first opportunity to perform a task does not always succeed. When it does, the next opportunity should become easier and hopefully more successful. Funding requests work the same way. This opportunity arrived at my request with deadline approaching. I have always enjoyed writing and most of my prior writing was for either personal relationships or financial analysis.

In this case, the task required a major re-write to provide the HIV humanitarian organization the best chance to receive crucial yearlong funding. Delivering food and humanitarian care for people affected by HIV and AIDS in South Georgia is important. It is clear this population needs quality, nutritious food and the donor was willing to provide it - for the right project.

The non-profit's executive director was certain the project needed $27,000 and was reluctant to push for more. The project's purpose, scope and numbers show much more is needed - $77,000 to be exact. The shocked director asked how she would justify such a request.

Seventy-seven thousand dollars ensures the project's success but chance of funding decreases as amounts increase. A lesser amount would probably receive funding but unless the amount is sufficient, the project has a 100% chance of falling short. We decided the donor may not provide the requested amount but we went with it because it was the smallest amount that could succeed.

Our write-up considered all the parties: the donor, the target population and us. Your organization is probably very similar. Both of us want the job and must balance, and manage capacities and capabilities - on paper and when the project is won.

Celebrate when the check arrives because the work begins when you deposit the check. In this case, the check did arrive - at 100% of request.

Your organization has the money, the staff and a plan. What could go wrong?

The funding win places you as an incumbent and incumbents usually win. The donor has not called, written nor even hinted of any concern so there cannot be much need for concern, right?

Our organization learned the hard way after we won a $100,000 grant the next year for a new project from the same donor. We followed the agreement exactly as the donor required, tracked successes and challenges and reported to the donor. One success should lead to another and we applied to repeat the successful program.

Here is a recap of my conversation with the director:

"What do you mean we were denied?"

"We were denied."

"Wow. That hurts."

"We provided everything the donor required. What do we do?"

It turns out it is what we did not do. We did not anticipate and we did not exceed.

We made the mistake but prevented its transition into failure. New procedures communicate meaningful and tangible expectations and results to donors and members. This is work but it is worthwhile.

How we turned lessons learned into results:

• Each member relationship starts with a two-party agreement
• We value member input and seek their input twice monthly
• Simple and thorough documentation validates mutual needs and successes
• Revised the information cycle to begin and end with our members

Every relationship is a cycle and each stakeholder needs at least one more stakeholder to survive and succeed. Our members are our end-users just as your members are your end-users. Without their input, a great project may receive funding one year but maybe not the following year. Ask your members how they define success before you begin your next project.

Copyright 2010 William Biggs

Stimulus Caution

With the drying up of donations from individuals, grants from foundations, and contracts from local governments, many smaller, locally-based nonprofits are looking to Washington for funding, hoping to get in on some of the economic stimulus packages as a means of surviving this recession.

While the temptation for "big money" or "easy money" is a terrific lure, and we do need to investigate all potential funding sources for our organizations, I do want to express my concern that you approach with caution.

Consider not only your short-term money needs, but the long-term effect of the funding, and your capacity to take on the project.

Most of these stimulus programs are not designed for grass-roots organizations; they pretty much require large structures, with already large budgets, and the capacity to take on new projects without much additional overhead.

Seriously, if you have an annual budget of only $500,000 you should not be looking at a grant for $300,000/year for only two years, and with only 5% allowed for administration.

First off, you're likely not going to be approved for such a thing, and the time spent pursuing this would be better spent on more realistic prospects. But secondly, if you did get the grant, are you really prepared for such a massive expansion of your program? Can you realistically manage it with what they allow for overhead? And what will you do when the money goes away? That will be quite a shock to your organization on all ends.

Now, that doesn't mean you can't benefit from the stimulus money that's been announced. By partnering with larger organizations as a sub-contractor, you can help them perform the work (keeping your staff employed) without being directly obligated to the Federal government and all the bureaucracy that that entails.

So, do keep your eyes and ears open for these opportunities, but do so with caution, with careful analysis of your own capacity and how the goals of the funds fit with your programs, and with a willingness to be a partner with others in your community.

(Of course, a stimulus bill aimed at "bailing out" small, local nonprofits would be quite welcome as well...)

Question: Seeking merger funds

From my email:

There are two nonprofits in my community that are considering a merger/acquisition scenario. I have advised them to bring in a consultant, which they will consider. Do you know of any capacity-building or other grants available that could help with the consultant and other costs of this major strategic move?
Redmond, Oregon

From my reply:

Usually funds for something like that are best sought locally. I can't think of any national foundations, off hand, that are interested in funding merger type activity.

Your best bet is to have honest (and confidential) conversations with the local community foundation, the local United Way, and some of the local funders who are already involved with one (or both) of the organizations.

Do healthy neighborhoods require nonprofits?

Wednesday morning I was at a "study session" for grantees of San Jose's "Healthy Neighborhood Venture Fund" (HNVF) to review their new strategic plan. HNVF money is a result of the tobacco settlements, and San Jose has been using the majority of their funds ($10 million) to make grants to nonprofits. Of course, whenever the city's budget comes up, there are those who suggest that the city could better use the HNVF money by adding it to the General Fund and spend it all within city departments.

Back to the study session... part of the agenda was to get together in smaller break-out groups to brainstorm things they may have left out of the implementation plan. The leader of our group asked if we thought that the plan should specify the percentage of HNVF money that would go to nonprofits. Of course, the nonprofit agencies present all thought that would be a great idea. And, of course, the woman in our group from the city library thought it would be a mistake.

My point for putting the percentage into the plan (and taking it out of eternal threat from the General Fund) was not simply self-interest. What I said seemed like common sense to me, but came as a surprise (if a pleasant surprise) to the rest of the group.

My point was this: Putting a commitment to fund nonprofits into the HNVF strategic plan would make a statement that Healthy Neighborhoods require a diverse and vibrant array of community-based nonprofit organizations. And, conversely, that a neighborhood where the providers of needed and desired social services were closing their doors due to lack of funding, is unhealthy.

I would not have made the same statement if the meeting had been for some other city funding source. But it seems to me that supporting local, community-based organizations should be have been a top priority of any "Healthy Neighborhoods" initiative.

Am I asking too much? What do you think?

A Scary Nonprofit Halloween Story

Once upon a time, a local government agency wanted to give grants in a particular issue area, so they put out an RFP and called all the area nonprofits to a special meeting.

The nonprofits came to the mandatory 3-1/2 hour meeting and received over 60 pages of instructions on how to complete the seven page proposal package (two pages of actual writing plus lots of forms). When they tried to ask questions, they were told to that they couldn't ask questions at the meeting, but that they should write them down on index cards and wait for the answers to magically appear on the government agency's web site - hopefully before the proposal due date.

So, did you recognize that story? How many times have you lived this nightmare? I experienced it again just yesterday morning. Now, nothing in this post should be taken to be a personal attack on the agency or people involved in issuing this RFP. The humans were all great, and made the 3-1/2 hours as painless as they could. My problem is with bureaucracy in general.

I just can't help but think that there is a more efficient way to achieve the same results - or better - without wasting so much time and resources on insignificant minutia.

When I talk to people about my career, and my progression from working for county government, to nonprofit agencies, to being an independent consultant, I often describe it as a natural reaction to being allergic to bureaucracy.

There isn't likely to be a cure for this overnight, but the situation isn't entirely hopeless either. Locally, the Silicon Valley Council of Nonprofits has been working with the city and county on streamlining some processes, and getting individual programs and agencies within the city and county to use the same forms for contracts, proposals, and reporting.

Not everybody is on board yet, but slowly, one agency, and one program, at a time, we eliminate a bit of the paperwork that has nothing to do with our mission. And, some day, maybe that little story I started with really will just be Halloween fiction.