One of the most critical skills in being a successful leader is the ability to read between the lines. This is doubly true when it comes to conversations that nonprofits have with funders. They say hindsight is 20/20, and I don’t think they’re wrong. There have been several occasions that, looking back on conversations, I recognize that I was in fact given a subtle warning about whether there would be a change to a funding stream. If only I had recognized the hints that they dropped.
I feel it’s important that I share these types of hints with you, as we are all experiencing a lot of upheaval in our financial reports due to changes in programming, events, and general life during COVID.
First and foremost, it is important to realize that most funders do not intend to fund an organization forever. This is especially true if they’re funding a specific program. Often this is self-evident as funders often indicate at the proposal stage that funding is limited to a certain time frame. But even when a nonprofit finds the golden opportunity of a funder that is willing to support operating costs, too often we become complacent, thinking that the support will continue over the long haul.
Suggestion: Have a conversation with funders about their expectations for you to be supported by them, how long they usually fund organizations, and whether you are eligible to reapply at the end of your funding cycle. Have it during the proposal stage. Most funders prefer to have those frank conversations and set expectations at the beginning.
Another thing to be aware of is that funders do not want to prop up an organization that couldn’t exist without them. In fact, if one funder provides your organization with more than 33% of its revenue, it puts you both in a very awkward position with the IRS, especially if it continues over a period of time. If a funder finds out that other revenue streams are drying up, they are also much more likely to not fund you. That does NOT mean hide the reality from them. That means you need to find a way to diversify your funding and ask the hard questions about WHY you are currently struggling to find support. Sometimes it is something outside of your control (Covid, anyone???), but often it’s because of mission drift or failing to connect with a real need in the community.
Suggestion: Don’t wait until you’re in crisis to develop a diverse funding plan that is a combination of grants, gifts, and income for services. If you wait until you’re in crisis, you’ll have a much harder time of it! So put this on your To Do list today.
Funding priorities change. Even the most stable stream of revenue from a funder can end when the board shifts priorities. Don’t be caught unaware. The best way to avoid this is to have a good relationship with your funders. The more they know you and feel like your organization is working hard at achieving its mission, the more lead time you will have when this sort of thing happens.
Still, this lead time often comes by reading between the lines.
For example, I worked for an organization that had received stable funding for a program for 6 years before I started in my position. When I came on, I was told by my board and long term staff that the grant application was a mere formality because the funder LOVED the program. When I went to meet with the program officer (along with one of those long term staff), we were told to be sure we got the application in as soon as possible because money was tight this year. We did as instructed and three months later were SHOCKED when we were not renewed for the grant.
The big hint I was given was the subtle comment that money was tight.
Had I not been new, had I been more embedded in the political climate, I would have known that priorities had shifted from supporting educational programs to safety programs. I also would have realized that we had already been funded for 6 years for this program, and I would have put priority into finding ways to diversify the funding stream. Alas, this was a horrible shock that meant I had to lay off staff and scramble to keep this program alive as the community thought it was important.
The moral of this story is to be proactive. Ask the tough questions, diversify your funding streams, and be ready to shift your programs. Don’t get stuck in the rut of thinking nothing will change, because change is constant. And right now, things are changing a lot. Funding is changing to meet new priorities. Tax dollars have dried up meaning that government support may no longer be available to our programs.
Get ahead of this potential concern, work on creating your strategic funding and communications plans now! If you need help, guidance or ideas, please know we’re here for you!
You may also be interested in our Recorded Workshop: *Crisis Fundraising: Donor Conversations During Coronavirus
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The weight of it all can be oppressive. Being a leader, being responsible for anything or anyone right now is a job filled with angst and stress, worry and fears. It can be hard to breathe through the anxiety.
You are exhausted, burned out and ready for a break.
The projections indicate that you will not get relief anytime soon. The people you serve are hurting, and they need you now.
The last several months most of us have just ducked our heads and focused on our feet – one foot in front of the other. Get through today. Get up tomorrow and do it again.
You must find ways to reenergize and renew. You must focus on selfcare. And encourage your staff to do the same. Be that role model! Remember their strength is your strength.
Take a minute, take a breath, lift your head, and see the horizon. You just ran a marathon and are being asked to run another.
There is much to be thankful for – you have, in fact, survived this far. You are smarter now. You are stronger now.
You have responded to your clients and eased their pain. You have served your mission. You have done much with little. But you are going to be OK.
Get sleep. Take your PTO. Move – every day. Turn off the news. Get fresh air. Take extra Vitamin D. Drink lots of water. Call a friend and laugh. Cook your favorite meal. Read a book. Listen to music. Doodle – with color.
You are not alone. It is OK to be the person you are today
And ask for help. Your community is eager to step up.
Katena Cain, PhD.
Nonprofit Management Consultant
Starting a nonprofit organization is an exciting way to make an impact in your community. Who wouldn’t want to be a part of this community of do-gooders? Well, with over 1.5 million nonprofits in the United States and roughly 51,000 (up from 43K in 2018) in Michigan, ensuring the sustainability and longevity of a nonprofit are not easy tasks. It takes a solid foundation, a strong board of directors, a willing group of volunteers, and lots of dedication. Resources can be scarce, and receiving your tax exemption status is just the beginning of the work that lies ahead. So here are three key things to consider when starting a nonprofit organization.
With millions of nonprofits out there, your vision and ideas may not be unique. Therefore, when considering to start a nonprofit begin by asking yourself the following questions:
Once you have completed your research and still want to start a nonprofit, begin the process of documenting your idea, mission, and vision as well as the formation path in a detailed business plan.
2) Incorporate and Establish
After documenting your plan, mission and vision, your next step is to complete all of the necessary paperwork and steps that are required to obtain your nonprofit status. Some of these things include,
Another critical piece of this process is to establish a Board of Directors of no less than 3 individuals. This group is very important and requires a large commitment from them because they will be legally responsible to help your organization meet its mission and vision.
Draft your bylaws with your Board of Directors' guidance. This will be your operator’s manual for your nonprofit. You will need to have a copy of these for filing your Articles of Incorporation and will need to submit these when applying for your federal tax-exemption. Your board will also be critical in assisting you with policy formation and financial development planning.
3) Work Your Mission and Stay Compliant
Once your nonprofit status is approved, your goal is now to ensure its success and sustainability. To do this, you will need to work your mission, develop policies, build a strong board, maintain a solid financial plan, and file your IRS 990 tax form annually to keep your tax-exempt status.
Starting a nonprofit takes a lot of work. Nonprofit Network is here to help you along the way. Do you know about the 1023ez application?
Attend our Starting a Nonprofit workshop and we'll take you through the process and provide you with a copy of our Guide to Starting a Nonprofit.
I think we can all agree on one thing - none of us "won" in this election. We voted (we should certainly celebrate how many of us did!), and those votes were counted, and we elected leadership. But we, the people, emerge bruised, disoriented, and bewildered.
In these days after an election that once again directed a spotlight at how divided this country is, and cast shadows on a clear path to unity, I hope to share tools that we can all agree on, especially for those of us in the nonprofit sector and employed and volunteer leadership.
The nonprofit sector can be the glue that begins to put our broken pieces back together. Maybe because we are designed to be nonpartisan, maybe because we were created to provide a social network for all, or maybe because empathy is the root of every mission, I believe that we are in the best position to start the healing process for our communities.
These are the truths that we hold to be self evident:
Power should be shared. The design of nonprofits require a shared power structure, decisions built on we - not me. We require multiple and diverse funding streams. The nonprofit sector was designed around a volunteer workforce, putting others before self.
Values and ethics matter. Nonprofits live and work in a fishbowl, working transparently in the light of day. We operate solely on the trust of our community, donors and constituents. If we sacrifice this trust, we sacrifice our mission.
Flexibility is critical. The world is constantly changing and the needs of our communities evolve. The strategies that used to work may not work today. Evaluation is a reflection of how we did and must be used to plan and adapt. Change is certain and modeling how to change is key.
Equity matters. The voice of one is as important as the voices of the majority. We seek unique and diverse perspectives in order to point out blind spots. Just because "most of us" prosper doesn't mean the programs or services work. We must always examine the views of all and determine what we can learn, ensuring barriers are reduced.
I hope that all leaders spend time reflecting on these lessons, and are living them out in our own roles.
Do you want one-on-one coaching?
Over the course of the last 24 months, the nonprofit community led Michigan’s efforts to gather a complete Census Count. Nonprofit organizations, as trusted voices, engaged in thousands of hours to reach deep into communities to ensure all people knew the census was occurring, its importance and providing access to complete their census.
Their efforts were herculean considering the challenges of a new way to count our residents (internet first), the pandemic and the multiple changes to the timeline.
The 2020 Census has wrapped up its data gathering phase and the apportionment counts will be delivered to the President by April 30, 2021, and redistricting data to be delivered to the states no later than July 31, 2021.
Apportionment is the process of dividing up the 435 memberships, or seats, in the House of Representatives among the 50 states according to population. It counts the population at 10-year intervals (yup – the Census). It uses the results of the count to calculate the number of House memberships each state is entitled to have.
The Census provides our community with population data – and this data is used to draw political districts and determine how hundreds of billions of federal funding will be distributed for 100’s of programs like:
The Census count started on March 10 – just days before the pandemic diminished our ability to utilize kiosks, door to door campaigns and events.
But our communities prevailed and found ways to engage the community.
The Census responses come in two forms: self-response (which means you and I completed the Census without the help of an government enumerator), and those that had an enumerator knock on their door and gather the necessary information.
The 2020 Census moved to an internet first model for the first time this year. This effort was due in part to the growing costs of conducting the Census and utilizing better ways to enumerate our population. The pandemic revealed significant issues regarding many family’s ability to access the internet, and we can see evidence of this in the internet response rates.
Early next year, demographers and data analysts will begin distributing the data gathered through the 2020 Census.
Michigan finished 8th in the U.S. self-response rate. We became the first state in the nation on June 17, 2020 to have exceeded its 2010 self-response rate. We also ranked 3rd-best in the nation for the largest gain in statewide response from the 2010 census at 71.3%.
Michigan’s self-response rate was 71.3%
Internet response was 55.9%
2010 self-response rate was 67.7%.
Here is a breakdown of our service areas response rate. You can dig deep into the data, explore response rates by census tracks HERE:
2020 Self Response Rate
2020 Internet Response Rate
2010 Self Response Rate
A big Thank you to all the nonprofits who supported the efforts! We are mighty when we work together!
You won’t know until you know...
Did you see my “oops" last week? I sent out our newsletter with the subject line of: “If you ax us the questions, we’ll provide the answers!” It was my play on words to draw you into reading our blog titled, Sharpen Your Ax, and in my humbled opinion, what I thought would be a cute and funny play on words.
Some of you maybe even wondered about our follow-up correction email: “How do you keep your tools sharp to be the best?”
After the first email was sent, I got a call from Regina who said she had received some negative feedback about the subject line of our email. I didn't understand. My first response was “Wait! I googled it. I know it's spelled correctly! I looked it up!”.
Even as it was being explained to me that I had used black American speech (or Ebonics) and some would consider it cultural misappropriation, I was still confused. I mean, I looked it up online. I was stuck on the fact that I even googled “Ax vs. Axe” . I wanted to be sure I wasn’t going too far off base with what I thought would be a fun play on words to draw you into reading our newsletter.
But… Clearly I did an “oops”
OOPS are statements made as a slip and inadvertently may be the cause of an OUCH.
An OUCH is when someone negatively feels the impact of a statement or action. In this case we can assume it is from an unconscious and unintentional slip of awareness
It took me a minute to absorb this, and then acknowledge it. Even with the hours, and I mean hours I have spent and dedicated to cultural competency professional development in 2020, I still missed this.
So how do we make an “oops” right? When someone says or points out an “ouch” we all must own it and say “oops” and apologize. None of us are perfect and the important lesson here is to learn together and from each other. I made a mistake, I’m not going to let this haunt me, and my learning will never be over. I am going to be conscious of what I say and do, and how I interact with others. And be conscious not only in the “workplace” but also at home and in my own social circles, because we never really know someone’s story until we listen.
So please accept this as my official, oops, and I am sorry for the ouch.
If you know me, you’ll know I grew up in New Jersey, which is a culturally rich and diverse place filled with people from all over the world. And there, the use of “slang” is common. Not to mention with a NJ ‘’joisy” accent, attempting to pronounce the word “asked” was virtually impossible to say and would always come out as “axed”. So hopefully you can see why I was initially confused about how someone would not find my play on words as funny. Offending anyone is never my intention.
At NN our intention is to create a courageous place. A safe place. Our goal is to increase our cultural sensitivity, understand and respect other’s values, beliefs and expectations. To be aware of one’s own assumptions and to be willing and able to adapt the way we communicate, in order to be harmonious with others. And I plan to keep fully embracing this goal.
If you would like to learn more about cultural competency, visit our Diversity, Equity & Inclusion page for blogs, articles, resources and tools and upcoming events. And of course, if you would like to have a discussion with us and yourself or with your organization, email us today, we’d love to hear from you!
Learn more HERE about the “ax” versus “ask” oops
It seems I'm always having a lot of conversations with leaders about self-care. Today, I'm specifically thinking about professional development.
When I contemplate professional development, I immediately think of the saying largely attributed to our 16th president, Abraham Lincoln, “Give me six hours to chop down a tree and I will spend the first four sharpening the ax.”
You will note his advice is deliberate—before the work starts, he spends a significant amount of time preparing himself completely. Two-thirds of the allotted time is spent developing a tool that will be ready for the task.
Prioritizing preparation does not have to cause you to miss your deadline. In fact, investing more than half of your allotted time to equip yourself can be a recipe for success.
From my perspective, this proverb is a resounding endorsement of professional development.
Which leads me to two questions:
1) Why are we jumping straight into the work?
I suspect our rush to start the work directly in front of us may be due to our addiction to urgency. Being compelled to put out all the “urgencies” (checklists, emails, social media, and unscheduled visitors) provides many of us with a sense of accomplishment. This is actually a physical reaction from your brain firing adrenaline and other feel-good chemicals. However, this comes at the cost of not addressing items that are most important. Self-care is made possible when we spend time working the “important” items instead of the most “urgent” ones that are right in front of us.
2) Why are we swinging a tool that's not up to the task?
Regrettably, we often defer professional development to "when we get the time" or "when we get the money." Sound time management practices tell us that these things don't happen on their own. We have to deliberately make the time and budget the funding. Sharpening the ax is all about working smarter, not harder. If you're a board member, make sure you're protecting a line-item for professional development for everyone—that's staff, your executive director, and yourselves. Seek out grants and funding that will cover the costs of professional development. This is soundly in your control. Own it. Take control and be intentional. Which, by the way, is the best approach for self-care.
What’s your ax? Is it a new hard skill? How about all the soft skills that are so important in our nonprofit sector? Becoming better at our profession accomplishes many things. It obviously impacts the quality of our outcomes, but also has a significant impact on our self-care.
Work that falls within your skill set also is done more quickly (sooner diagnosis of issue, less trial-and-error) and is done under less stress (because of your increased confidence). Working within your skill set is also a major contributor to job satisfaction. So identify an area of your work that needs to be refined or built. If you add sound time management and increased proficiency at your work, you are well on your way to the work/life balance we crave.
In response to the need for intentional and deliberate professional development, Nonprofit Network offers intentional focus to all Executive Directors, CEO's, Managing Directors and/or Direct Reports.
Peer Coaching and Executive Director Academy
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NN's Peer Coaching
Peer Coaching Groups meet online once a month for 7 sessions and are designed to facilitate goal-setting, coaching and action learning within a small group of peers. Each group member decides what real-world goals or issues they wish to address and guided by a cognitive coach, your peers will coach you primarily through asking open-ended questions to expand the member’s thinking and options.
Groups are no larger then 8, but require a minimum of 6 participants
NN's Executive Director Academy
The Academy is a 9-month cohort of 15 (or fewer) ED's who have been in their job for under 5-7 years or ED's in training. The cohort meets monthly online covering different topics important to your role and you will apply the information in real-time between these sessions.
If you're interested in a cohort for EDs who have been in the field for more than 5 years (or if you're a new ED but are not free for this season's cohort dates), let us know! We'll add you to the wait-list for the next relevant cohort!
*Updated from original post of Sept. 2019
Our Upcoming Calendar
As I prepare for the workshop I am leading next month on Project Management Basics, I feel like we need to highlight a tool that nonprofits need to embrace right now, and that is doing a Risk Assessment.
For project managers, a risk assessment is a series of calculations to determine what things may be likely to derail your project. The equation is simple.
Risk = probability of something happening x the Impact of it happening.
The people on the project team will list the "risks" and then assign a number from 0 to 5. 0 is no impact/probability and 5 is high impact/probability. Anything 12+ is High, 6-9 is Medium, and 5 and below is Low Risk.
Let’s say you are planning an outside event in the fall. A possible risk might be Bad Weather. The probability of a storm or other bad weather in the fall in Michigan is fairly high, I’d say a 3. Determine the impact, I'd say the impact of a storm on an outside event is fairly high, so I'll assign it a 5. 3 x 5= 15. So we've determined Bad Weather is a High Risk Factor. *Please note, at this step we are not looking for ways to mitigate a risk (that comes later!) we are only determining the risk.
12+ is High, 6-9 is Medium, and 5 and below is Low Risk.
Now, let’s say you’re planning a "Stream Clean Up" in the spring. What’s the risk of not having enough volunteers to your event? The impact of not having enough volunteers might be medium because you’d still manage to get some of the work done. I’ll say a 2. What are the chances of you not having enough volunteers? Maybe also a 2? 2 x 2= 4. Not having enough volunteers would be Low Risk.
So, why is this tool important for nonprofits right now?
Because we are in a time of unprecedented uncertainty for many organizations. Thus, using a simple tool like this with your board allows you to rate the risk to various programs, funds, and events. What is the Risk to your organization of losing a grant that your organization has counted on for years? Ask the people on the board to use the 0-5 scale and ask them what the impact would be, and what the probability of it happening is. If the Risk is high, then start now in trying to figure out what you need to do to mitigate that risk! Perhaps a call to the donor before the application is due is in order to get more information on their funding priorities. Perhaps it is time to cultivate other funding streams (hint: it is ALWAYS time to cultivate new donors!).
Go through the list. Assess your risks honestly, and use the scores to prioritize what you need to do NOW to keep your organization alive and afloat.
To discuss these scenarios and others further please join me on Wednesday September 2nd at 9 AM for our new workshop, Project Management Basics
From the moment we are brought into this world, we begin to hear how important it is to be kind to others. Whether it was sharing your toys with a sibling, or including someone at recess, shoveling a neighbor’s driveway, delivering a meal to a sick friend, we have always been encouraged to give to others. While we heard it often, most of us never questioned the phrase, “Sharing is caring.” That is, until we grew older.
It happens to all of us at some point. We begin to question if our efforts are really worth it. We begin to calculate if we have enough resources to allocate to others. Eventually, the kid who valued the idea of sharing whenever possible begins to question if they should even share at all. I’m here to tell you that you are more influential than you think and that every act of giving you perform creates a butterfly effect that changes the world.
Giving your time or a donation to an organization creates a shock-wave. A small donation to an organization can help carry out a mission that inspires others to give as well. Giving your time can inspire others to join an organization or be the extra boost it needed to succeed. Helping spread a message can help educate someone that otherwise would never be exposed to it.
You see, the simple act of giving is not so simple. Sir Isaac Newton's first law states that every object will remain at rest or in uniform motion in a straight line unless compelled to change its state by the action of an external force. As long as you are trying, as long as you are giving in some way, you are that external force.
You are the difference maker.
You don’t have to give a million-dollar donation to make a shock-wave. You can give your time to help build a playground for instance. A playground where someone may learn for the first time that “sharing is caring.”
All nonprofits benefit from public support and donations, and most depend on private donations to serve their communities. While an individual taxpayer only receives a partial tax benefit for charitable donations, the community served by the charitable nonprofit receives the full value of every hour and dollar.
Now more then ever your donations are critical to a nonprofits success. NN uses contributions to help fund scholarships, workshops and to provide resources.
A gift of any size is deeply appreciated.
There is strong evidence to suggest that the worst isn’t over. Many have tried to compare the pandemic with a natural disaster and utilize similar strategies to respond and recover. This pandemic could be compared with some of the most significant natural disasters in recent history, like Hurricane Katrina for example. As with that major event, the actual hurricane wasn’t the scary part – it was what happened afterwards.
We are in the eye of this storm and we have opportunities to regroup, replenish and prepare for a long road ahead.
As we all struggle to fight the onslaught of challenges brought on by COVID-19, let us not bury our heads in the fear, but look up and look forward and prepare for the realities we are now facing.
Let’s look at some sobering facts and begin to explore what we should be doing to prepare.
What does this mean for you? It means that the nonprofit sector will have more people to take care of. People will have to struggle to meet their basic needs and pay their rent. Foreclosures and evictions will increase. Our food pantries will be busy. Substance abuse and domestic violence will increase and so will child abuse cases. Mental health needs will increase. Now more than ever, you should be exploring and addressing any disparities to who and how your mission is delivered.
What can you do? Stay informed about what is going on at the state and national level. Watch for updates from resources like the Michigan Nonprofit Association and the Michigan League for Public Policy. Now is the time to be heard and use our collective voices. Know how every decision impacts you and the organizations that matter to those you serve.
What does this mean for you? It means if nonprofits who rely on state or government contracts, could experience delayed payments or even the cancelling of contracts. It means that some of the people we have been partnering with might not be able to hold up their end of the agreement.
What can you do? Check your financial history. Go back to 2008-2012 and review what happened to your funding sources. Were your payments delayed or were contracts decreased or cancelled? One thing to remember is that COVID-19 has changed the rules of this game – our legislators are less likely to cut education funding because our schools need more, not less, to get our kids back in the classroom. So that means things that were safe last time might not be this go-around. Make a contingency plan that will allow you to act quickly when the new budget details are revealed.
What does this mean for you? It means that if a nonprofit has relied on large fundraising events, that income will not return this year. Programs that rely on people gathering will be significantly impacted.
What can you do? Revisit your mission and remember that the programs you currently deliver are just one way you achieve your mission. Now is the time to change your fundraising strategy – if you haven’t already – and develop a vibrant individual donor program.
Nonprofit Sector Health
What does this mean for you? Some of us will not survive. And this will mean that our communities will rely on support provided by less organizations. Fewer support services will mean more individuals will struggle to navigate systems and receive services.
What can you do? Check on your neighbors, partners and friends. Understand who might be in jeopardy. Become more efficient, and eliminate waste: time, energy and resources. Continue to develop contingency plans. Affirm your organizational and institutional values so you know what to protect.
If you are an Executive Director, you need to gather your data and evaluate your risks. Your board members need to meet, regularly, and you need to begin preparing them for hard decisions. You will need to help them make difficult cuts. You need to ask for help.
If you are a board member, you need to check in with your Executive Director. They are not OK. The burden is enormous. They are managing the impacts to your clients, employees, the organization, the community and the threat to not only their livelihoods, but life’s passion and work.
For some organizations, drastic cuts and dissolution's are on the horizon. They might see it – they might not. They can’t do this alone.
We have upcoming workshops that will help you (see below).
Critical Conversations for Nonprofits Workshop Series:
As with any severe storm, the world will look different afterwards. We will emerge, changed and not quite the same, but stronger and smarter and understand how to be better equipped for the next one.
Call us if you need help, we will brave the storm together.
If your organization needs help with planning, feel free to reach out to us, it's what we do. As always, we’re here to help you make the world a better place. Call 517-796-4750 or email us today! We're happy to help!
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Our ED Regina Pinney adds her thoughts and voice behind this week's blog; Facebook Link
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