I've recently been interviewed by The Vault - an online career information and research site - about how I got into nonprofit consulting. The interview, conducted by Alex Tuttle, can be found by clicking Career Paths: Nonprofit Consultant.
I enjoyed doing the interview, and thought the questions were well thought out and helpful to others considering a career in nonprofit consulting, or just wondering what a nonprofit consultant does.
Friday, May 21, 2010
Friday, April 23, 2010
Will Your Nonprofit Lose Charity Status on May 15?
It may be April, but this is no Fool's joke. Up to 25% of the nation's officially recognized 501(c)3 Nonprofit Organizations have never filed an IRS form 990; the nonprofit tax return. That's been fine, as those organizations with income of under $25,000 have always been exempt... until now.
While smaller groups may still not required to file on an annual basis, a provision of the Pension Protection Act of 2006 included a requirement that the Internal Revenue Service revoke the nonprofit status of organizations that fail to file for three years in a row. That third annual deadline is fast approaching.
The IRS has sent out notices to thousands of organizations that may be effected and, with the lightning speed of bureaucracy, the actual de-certifications may not happen till January, but there are still likely to be small community organizations that fall through the cracks, don't get informed, and wind up with no tax-exemption.
Don't let this be your organization! If you are working or volunteering with a small, community nonprofit, make sure they've completed an IRS 990 or quickly request an extension and begin work on your filing.
I have mixed feelings about this new requirement. The 990 is not an easy form to complete. To compare it to personal taxes, it's more like the 1040 long form with extra schedules than the 1040 EZ. It frequently requires the assistance of professional accountants to complete correctly.
For an organization with less than $25,000 of income, this is quite an expensive burden and a cost way out line with their other expenses. That fact, of course, once reported properly on the next year's 990, will make the organization look inefficient and earn them poor ratings with those who analyze over-head to program cost ratios.
On the other hand, our sector is often accused of unprofessionalism and told to "be more business like." Tougher 990 standards that apply to all nonprofits is one way in which we prove our ability to manage donated funds in a prudent and professional manner. The 990 is required transparency; it is the window into our financial affairs by which we demonstrate the value of our work.
And, frankly, my own feeling is that the majority of the organizations that will be de-certified as a result of these new rules have probably ceased operating long ago. The de-certs will likely include many start-ups that never started, one and two-person organizations that lost steam and disbanded, and other dreams and good ideas that never quite made it.
Clearing these non-organizations off the rosters of legitimate charities could only be a good thing, as it will leave a clearer picture of what organizations are active, and all the good work that they are doing.
While smaller groups may still not required to file on an annual basis, a provision of the Pension Protection Act of 2006 included a requirement that the Internal Revenue Service revoke the nonprofit status of organizations that fail to file for three years in a row. That third annual deadline is fast approaching.
The IRS has sent out notices to thousands of organizations that may be effected and, with the lightning speed of bureaucracy, the actual de-certifications may not happen till January, but there are still likely to be small community organizations that fall through the cracks, don't get informed, and wind up with no tax-exemption.
Don't let this be your organization! If you are working or volunteering with a small, community nonprofit, make sure they've completed an IRS 990 or quickly request an extension and begin work on your filing.
I have mixed feelings about this new requirement. The 990 is not an easy form to complete. To compare it to personal taxes, it's more like the 1040 long form with extra schedules than the 1040 EZ. It frequently requires the assistance of professional accountants to complete correctly.
For an organization with less than $25,000 of income, this is quite an expensive burden and a cost way out line with their other expenses. That fact, of course, once reported properly on the next year's 990, will make the organization look inefficient and earn them poor ratings with those who analyze over-head to program cost ratios.
On the other hand, our sector is often accused of unprofessionalism and told to "be more business like." Tougher 990 standards that apply to all nonprofits is one way in which we prove our ability to manage donated funds in a prudent and professional manner. The 990 is required transparency; it is the window into our financial affairs by which we demonstrate the value of our work.
And, frankly, my own feeling is that the majority of the organizations that will be de-certified as a result of these new rules have probably ceased operating long ago. The de-certs will likely include many start-ups that never started, one and two-person organizations that lost steam and disbanded, and other dreams and good ideas that never quite made it.
Clearing these non-organizations off the rosters of legitimate charities could only be a good thing, as it will leave a clearer picture of what organizations are active, and all the good work that they are doing.
Thursday, April 08, 2010
Proposal to Funding Conversion Rates
Often, my posts here start as replies to emails I receive from readers. Today I got an email with the following question:
And my reply to the reader (in part) was:
The industry rule-of-thumb I've heard is that 1 in 12 proposals gets funded, or about 8.5%, and that's in a good year.
A professional grant writer should be able to do better than that, hopefully even one in four or better, but it really all comes down to the organization they're writing the grant for, and that organization's reputation and existing relationships with foundations.
An established, larger, or older nonprofit might be only working with the same foundations year after year, and only responding to direct invitations to submit a proposal. In such a situation where nothing is sent out as a "cold call," a 60% success rate might be easily achieved, or even exceeded.
Meanwhile, a newer, start-up nonprofit might be very happy with results of one in 15 proposals being funded, as virtually every proposal or LOI they send out is an introduction to the agency and an attempt to just get a foot in the door. Relationships with foundations have to start somewhere, and the LOI is traditionally that place.
So, your question was, is it reasonable for a prospective employer to "require" a 60% conversion rate. My answer is simply to turn it back onto them. What is their current conversion rate? Do they have established relationships with funders or have they had scattered luck?
If you're preparing for a job interview, you can figure out some of those answers by going to guidestar.org and downloading their 990 tax returns for the last few years. Check out who is funding them, and whether the list is completely different each year, or from a stable group of sources. Are they large grants, small grants, what percentage of the budget is funded through grants?
Meanwhile, in your letter and resume, you should explain that your success rate is based on the assignment given. If they client asks for LOIs to be sent to "a dozen new funders" that it will naturally be less successful than when a client asks you to write for a specific funder who has requested the proposal.
If they don't like that explanation, then, frankly, you're better off not working for them. If your job performance is going to be judged by an unrealistic goal your tenure will be short, stressful, and unhappy. Accepting a job you can only fail at is never a good career move.
I have written grants for years. I believe I have been fairly successful. My grant submission in relation to funding rate averages from 6-12%. However, I just applied for a full-time position where the organization listed that it REQUIRED applicants to have a history of a 60% funding conversion rate for grants submitted.
And my reply to the reader (in part) was:
The industry rule-of-thumb I've heard is that 1 in 12 proposals gets funded, or about 8.5%, and that's in a good year.
A professional grant writer should be able to do better than that, hopefully even one in four or better, but it really all comes down to the organization they're writing the grant for, and that organization's reputation and existing relationships with foundations.
An established, larger, or older nonprofit might be only working with the same foundations year after year, and only responding to direct invitations to submit a proposal. In such a situation where nothing is sent out as a "cold call," a 60% success rate might be easily achieved, or even exceeded.
Meanwhile, a newer, start-up nonprofit might be very happy with results of one in 15 proposals being funded, as virtually every proposal or LOI they send out is an introduction to the agency and an attempt to just get a foot in the door. Relationships with foundations have to start somewhere, and the LOI is traditionally that place.
So, your question was, is it reasonable for a prospective employer to "require" a 60% conversion rate. My answer is simply to turn it back onto them. What is their current conversion rate? Do they have established relationships with funders or have they had scattered luck?
If you're preparing for a job interview, you can figure out some of those answers by going to guidestar.org and downloading their 990 tax returns for the last few years. Check out who is funding them, and whether the list is completely different each year, or from a stable group of sources. Are they large grants, small grants, what percentage of the budget is funded through grants?
Meanwhile, in your letter and resume, you should explain that your success rate is based on the assignment given. If they client asks for LOIs to be sent to "a dozen new funders" that it will naturally be less successful than when a client asks you to write for a specific funder who has requested the proposal.
If they don't like that explanation, then, frankly, you're better off not working for them. If your job performance is going to be judged by an unrealistic goal your tenure will be short, stressful, and unhappy. Accepting a job you can only fail at is never a good career move.
Tuesday, April 06, 2010
Merger Complete
Now that the ink is dry and the papers filed and the merger official and done, I can publicly reveal that the Interim Executive Director assignment I was working on for the past 8-1/2 months was for the Support Network for Battered Women (SNBW), and that as of April 1, 2010, Support Network is now a division of the YWCA of Silicon Valley.
We completed the merger quicker than many thought possible, but we did it well. Because we knew we had an ambitious schedule we committed early to frequent meetings of the negotiations team, open and frequent communication out to the full board and staff of each organization, and to bringing together the implementation team and planning process even before the final agreements were completed.
The transition was smooth as the YWCA's CEO and COO each began attending SNBW staff meetings to assist with updates and get to know staff early. As negotiations wound down, the YWCA Administrative Director also began spending time at SNBW to begin answering HR questions and allay any concerns staff might have about transitioning to the YW's employment.
About that time it was announced that the YW's COO would be the Support Network Interim Division Director following the closing date, and she began dividing her time between the Support Network's office and the YWCA's office before the official merger date. When April 1 came, and my services as Interim Executive Director for SNBW were no longer needed, it was simple and stress-free to transition my duties over to her and make my exit.
Because of the focus on communications and transparency we managed to avoid the pitfalls of too-quick a transition and the potential jarring effect that could have had on staff and operations. As it was, when the official date came, it was a welcome move, well-understood by all, and a positive experience. Support Network staff attended a YWCA orientation session before the closing date, and a final private celebration of the 30-year history of SNBW took place to provide staff closure to that period in the organization's life.
Of course, while this was all happening each agency conducted their full due diligence review of the other agency's operations, including full financial review, personnel records inspections, etc., and a communications plan was continually updated to guide our messaging to key funders, constituents, and community partners.
As I've mentioned in earlier blog posts, this was my third time going through merger negotiations as an Interim ED. Each time is a little different, and the lessons learned help guide the next project, and then there's more to learn again.
And now, I'm available, once again, for an Interim (or the right permanent) Executive Director position, if you know of an agency in need of my services...
We completed the merger quicker than many thought possible, but we did it well. Because we knew we had an ambitious schedule we committed early to frequent meetings of the negotiations team, open and frequent communication out to the full board and staff of each organization, and to bringing together the implementation team and planning process even before the final agreements were completed.
The transition was smooth as the YWCA's CEO and COO each began attending SNBW staff meetings to assist with updates and get to know staff early. As negotiations wound down, the YWCA Administrative Director also began spending time at SNBW to begin answering HR questions and allay any concerns staff might have about transitioning to the YW's employment.
About that time it was announced that the YW's COO would be the Support Network Interim Division Director following the closing date, and she began dividing her time between the Support Network's office and the YWCA's office before the official merger date. When April 1 came, and my services as Interim Executive Director for SNBW were no longer needed, it was simple and stress-free to transition my duties over to her and make my exit.
Because of the focus on communications and transparency we managed to avoid the pitfalls of too-quick a transition and the potential jarring effect that could have had on staff and operations. As it was, when the official date came, it was a welcome move, well-understood by all, and a positive experience. Support Network staff attended a YWCA orientation session before the closing date, and a final private celebration of the 30-year history of SNBW took place to provide staff closure to that period in the organization's life.
Of course, while this was all happening each agency conducted their full due diligence review of the other agency's operations, including full financial review, personnel records inspections, etc., and a communications plan was continually updated to guide our messaging to key funders, constituents, and community partners.
As I've mentioned in earlier blog posts, this was my third time going through merger negotiations as an Interim ED. Each time is a little different, and the lessons learned help guide the next project, and then there's more to learn again.
And now, I'm available, once again, for an Interim (or the right permanent) Executive Director position, if you know of an agency in need of my services...
Tuesday, March 02, 2010
How Philanthropy Destroys Charity & More on Volunteer Giving
I have two short items to blog about today. The first is to point you to an article in the Guardian (UK) called "Why business won't save the world," in which the author talks about efforts, such as the Gates Foundation's work in vaccine development, and asks some very good questions about the effect on nonprofit work when a few wealthy individuals drive the nonprofit sector's agenda.
At the heart of the issue is the "philanthro-capitalists' desire for data and control" taking precedent over considerations of need. As the author states:
The other short note I wanted to post was to share a comment Monica posted on a previous blog here, "Money Follows Involvement." In that post, I restated my conviction that volunteers have already shown their dedication and interest in your cause, and that not asking them for donations was leaving money on the table.
Monica wrote (in part):
At the heart of the issue is the "philanthro-capitalists' desire for data and control" taking precedent over considerations of need. As the author states:
Investing in new vaccines against malaria is great, but there's no vaccine against poverty, inequality, violence or corruption, areas in which there are no "short-term returns on investment", only a long, hard slog through politics and social change. Does that mean only the easiest causes will be funded?This is something I've felt and feared myself for some time, as the agencies I work with strive "to reach their numbers" and potentially loose sight of the individuals those numbers represent.
The other short note I wanted to post was to share a comment Monica posted on a previous blog here, "Money Follows Involvement." In that post, I restated my conviction that volunteers have already shown their dedication and interest in your cause, and that not asking them for donations was leaving money on the table.
Monica wrote (in part):
I have been volunteering with one specific organization for over a year and they have yet to ask me to donate... If this organization has not asked me, I bet that they haven't asked other volunteers either - effectively missing a large pool of constituents. ... Hank Rosso suggests that the most likely potential donors have three characteristics – linkage, ability, and interest. Since the volunteer is involved it is clear that linkage to the organization and interest in mission are already in place. The remaining characteristic is ability. Often an organization will know if their volunteer has the ability to give, if the organization doesn’t know, the only way to find out is to ask. ...I usually think of the "linkage, ability, and interest" equation as the "Triple A Qualifications: Ability, Affinity, & Access." Whichever terms you use to remember this by, it's excellent advice. And thank you, Monica, for sharing your story.
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