New column every Monday--"The Fundraising Guru"--Oct. 14, 2007

Foundation foundationals
by Dr. Stephen L. Goldstein,
author of 30 Days to Successful Fundraising
host and producer of "Fundraising Success" on WXEL/National Public Radio: Internet radio/podcast at www.wxelpodcasts.org

For many fundraisers, foundations are a tantalizing cross between Fort Knox and the Sphinx. They know that there’s “all that” money there, they know it gets given away —t o others, but they just don’t know how to get their fair share. So, here are some initial foundation foundationals to help you open sesame — and get your cash register to ring.

1. Know which foundations give money, and which don’t. The first two things you need to know about an organization calling itself a foundation is (1) that it’s a nonprofit and (2) that it makes grants. Some for-profit businesses may use the word foundation in their name. Of course, you could ask them for money, the way you would any business. Just don’t approach them as you would a nonprofit foundation. Some foundations receive, rather than give, grants. So, they may be your competition, certainly not your benefactors.The foundations you want are grant-making. Some give away large amounts of money; others have more limited resources. The best-known foundations in America have been established by major corporations or wealthy individuals and have become the brand-names of charitable giving — historically Ford, Rockefeller, Carnegie and now Gates. They have given the world of foundations its panache and mystery, because they are so big and involve rich people who appear remote and unapproachable.

2. Even if you can’t get to Ford or Gates, you are literally surrounded by local foundations that can help you, some even in major ways. Many, even sizeable, foundations are established by “average” people. They may literally be your neighbors, “the millionaires next door,” or their family members or friends. You probably don’t even know it. And yet, they may be far more approachable than you ever imagined. If they are sophisticated enough to have established a foundation, they not only have financial resources, but an unusually high commitment to ongoing charitable giving — every fundraiser’s dream donors.

3. Research the foundations in your area. Of course, you do not have to limit your approaches just to foundations in your community, but starting there is a great way to take the mystery out of the process and to begin forging an overall success strategy. First, go to www.guidestar.org and register for free, if you haven’t already done so. Then, in the search box, type the word foundation and your zip code. You may be amazed at what you’ll find. Once you make a list of foundations, you’ll have to sort through it to determine which give, and which receive, donations. But that’s just the beginning of (what could turn out to be) a most profitable adventure. Guidestar.org will give you perhaps your only reason to love the IRS: Annually, almost all foundations have to file a Form 990. It’s public information, chock-full of spicy details — readily available on the Internet. So, when you find a grantmaking foundation in your zip or others near you, click on its 990. You’ll find out how much money the foundation has, what its giving priorities are, how much it gives away and to whom. Best of all, you’ll also see a list of its board members, in some cases, even with their personal addresses. Obviously, they help make the decisions that will mean the difference between your getting or not getting a grant.

4. Your board is key to approaching all foundations, but especially your local ones. Fundraising is always about people giving to people they know and trust. Ask your board members if they are close to any of the people listed on a foundation’s Form 990 — or if they know someone who might be.

5. Remember: By law, foundations have to give a certain percentage of their money away — why not to you? Usually, foundations of any size establish priorities for giving — for example, health care, education, the homeless, music education. Larger foundations will have formal guidelines for requesting money and timetables for making awards. Smaller foundations operate more loosely. No two foundations are alike. Each has a personality, like an individual donor. Obviously, you want to look for foundations whose giving priorities match those of your nonprofit. But, no foundation’s priorities are written in stone. With the right entree from your board member or someone else who knows you, almost any foundation will befriend your worthy cause.
E-mail Stephen Goldstein your comments and questions at trendsman@aol.com.

New column every Monday: "Fundraising Guru"--September 3, 2007

Create budgets that make people want to give
by Dr. Stephen L. Goldstein, author of 30 Days to Successful Fundraising and host and executive producer of "Fundraising Success" on WXEL/National Public Radio, available at http://www.wxelpodcasts.org/ to anyone with Internet access or its equivalent at any time from anywhere in the world

The best way to bolster your case for your fundraising objective is to develop the (usually dreaded) budget. Every lofty purpose has to make dollars-and-sense to a potential funder's critical eyes. But don't look upon the process just as a matter of slapping dry numbers down next to likely expenditures. Turn it into an opportunity to inspire potential contributors.

If you are applying for foundation or government grants, you will have to provide funders the financial information they want in the form they want it. (Whoever has the money writes the rules.) Private donors may not hand you a preprinted checklist, but they don't want to get fiscal mush. Everyone wants clear budgets, timelines, and outcomes. Major donors want to know what percent of your tab they are being asked to contribute. For them, your proposal is a risk and an investment, even if they don't personally receive dollar dividends from it. They want to feel that you are doing something that is likely to succeed and will only be convined if you add responsible financial projections to a description of your worthwhile aims.

Dare to be different. Include a brief, but meaningful, narrative to explain the logic behind your budget proposal. Slip in choice editorializing wherever it strengthens your case. For example, make interpretive statements at strategic points about the cost-effectiveness of your proposal. Guide potential funders through your budget.

Follow these 10 basic guidelines to develop a budget that makes people want to give:

1. Don't pad your request, anticipating you will have a chance later to negotiate a more realistic figure. You will probably have blown it. Funders don't play games or like game-players.

2. Develop two or three different budgets for the same efforts, showing how much or how little you'll be able to accomplish, depending upon your success at getting funding.

3. Stress the "invisible" dollars your organization brings to the table: the value of staff and in-kind servcies, for example.

4. Demonstate the cost-effectiveness of the way your organization conducts business. Use comparative data to show how your expenses are in line with or more economical than those of comparable entities.

5. If it's true, sell funders by proving that you can deliver quality services more inexpensively than anyone else. (Even nonprofits must recognize that you compete in the marketplace.)

6. Resist the human tendency to ignore inevitable, unanticipatable costs and to think that they will somehow take care of themselves. Budget a lump sum for the unexpected.

7. Include dollars for public relations. Describe how the positive press you generate will help you attract additional donations.

8. Emphasize how you can stretch contributed dollars through collaborative efforts with other appropriate individuals and agencies.

9. Budget for your increasing self-sufficiency and, ideally, financial independence. Funders do not want to see a budget that will obligate them forever or that will rely solely upon the kindness of strangers. Be specific about how your project will be able to become less dependent upon contributed monies as time goes on.

10. In addition to budgeting for start-up costs, estimate what it would cost responsibly to close a project, should that be necessary.

A creative budget proposal can be your most persuasive fundraising tool--turning your good sense into other people's generous dollars.

Email your fundraising comments and questions to Dr. Stephen L. Goldstein at trendsman@aol.com.