"No Unsolicited Proposals" - What happens when there are no doors for smaller nonprofits to open

An October 2015 opinion piece in the Chronicle of Philanthropy noted that 72% of US charitable foundations do not accept unsolicited grant proposals, a significant increase from just four years ago, when that number was 60% (“Let’s Require All Big Foundations to Let More Nonprofits Apply for Grants,” by Pablo Eisenberg, Chronicle of Philanthropy, October 20, 2015). The author goes on to say that:

“Organizations that are small to medium size as well as those that represent poor, minority, and other grass-roots constituencies, pursue controversial causes and activities, or lack influential connections or friends struggle to get foundation support. This invitation-only system allows foundations to perpetuate inequality in American society, and that’s why Congress, regulators, and nonprofits must come together to force change... Foundations and their wealthy benefactors receive enormous tax benefits that subsidize their operations. Donors receive upfront deductions of 40 to 50 percent for their gifts, while foundations are exempt from local and state taxes as well as from taxes on their investment income. In exchange for these benefits, foundations and donors have an obligation to the public to ensure that their philanthropy is accessible to all nonprofits that want to apply for grants.”

As someone who has helped nonprofits pursue foundation grants for two decades, let me share with you how this looks from the nonprofit’s side:

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The nonprofit researches foundations that might be interested in its work.

The nonprofit sees that the foundation does not accept unsolicited proposals and gives up on the idea of reaching out to the foundation.

Unfortunately, every foundation the nonprofit identifies says that it does not accept unsolicited proposals. Lacking a robust major gifts program (attaining five-figure, six-figure, or higher donations from individuals) or other substantial funding streams, the nonprofit plods along with an annual fundraising campaign, wondering how it will ever expand its services to meet growing needs.

OR

The nonprofit’s in-house fundraiser or fundraising consultant says “Don’t worry about that ‘no unsolicited proposals’ thing – it just means that you have to reach out to the foundation, tell them about our organization, and get it to invite you to submit a proposal.”

A debate ensues about whether or not they should reach out to a foundation officer or the foundation’s board.

Because nobody wants to make a “cold call,” some passing-the-buck takes place around who should make the call.

The fundraising consultant says that she can no longer make these outreach calls on behalf of the nonprofit because she is not registered as a solicitor with attorney general of the state in which the foundation is located, and the foundation would rather hear directly from the nonprofit’s staff, anyway.

The Executive Director of the foundation reviews the prospect research and makes a call to the foundation’s executive director or a program officer.

The Executive Director does not hear back.

The Executive Director calls again a week later.

The Executive Director does not hear back.

The Executive Director sends a follow-up email a week later.

The Executive Director receives a polite email from the foundation, saying the foundation is not accepting unsolicited proposals, has spent out everything it can spend for this year, is no longer funding XYZ....

OR

The Executive Director does get a call back from the foundation. The conversation goes fairly well, and the nonprofit is invited to submit a proposal. The nonprofit spends 15-20 hours deciding what to apply for, compiling the proposal and all of the required ancillary materials (budgets, audited financial statements, board lists, and more) submitting the proposal, and following up – all while other projects and priorities fall by the wayside. The proposal (a) is rejected, (b) is moved to the next docket, which is happening in six months, or (c) gets an “entry level” gift of 10% - 20% of the original ask.

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Certainly, there are scenarios that play out more happily than this, scenarios in which the nonprofit and the foundation’s staff work collaboratively to present a proposal to the foundation’s board that will be accepted at a level close or equal to what was requested. This first gift will lead to a longer-term collaboration between the nonprofit and the foundation, one in which both entities pursue their visions and achieve their missions.

My experience says that this dream scenario is becoming a less frequent reality. As more and more nonprofits are established in the US (there now are more than a million of them, according to the National Center for Charitable Statistics), there is increasing competition for funds. I believe that there may simply be too many nonprofits in the US, and some of these organizations that cannot sustain themselves should probably close or merge. But I also have observed that many substantial foundation gifts are made because somebody knew somebody who opened a door. For those on the fringes, for those without connections, it does not seem to be a level playing field.

Meanwhile, smaller nonprofits are spinning their wheels, spending hours and hours preparing for and pursuing grants that they are very unlikely to secure. Those are hours that could be spent on more mission-driven activities.

I imagine that the situation at foundations can be equally frustrating. When they accept unsolicited proposals (and even when they do not), foundations can be inundated with phone calls, letters, emails and more from nonprofits that do not meet their giving guidelines, do not offer programs or services in which the foundation’s board is interested, or simply do not have a chance of receiving a grant. Distracted and overwhelmed by this, foundation officers cannot adequately turn their attention to the business at hand – helping the board make grant making decisions that advance the foundation’s mission. Furthermore, many foundation grant officers also spend their time helping their current grantees make other funding connections, run effective programs, and more. They do not have the time or resources to address every unsolicited inquiry that comes in.

And, of course, there’s the Golden Rule: He who has the gold, rules. If a foundation knows that they only want to support certain hand-picked projects, that is their prerogative.

So what is a foundation to do? What is a nonprofit to do?

Perhaps there is a way to reach a middle ground. For example, mid-size to large foundations could be required to accept unsolicited proposals, but they also could set parameters, such as “you may only submit one unsolicited proposal over a three year period.” That would force nonprofits to think carefully about those submissions, lest they squander a good opportunity. But even if they accepted those unsolicited proposals, I do not think they could be forced to fund them.

I don’t know what the answer is, but from where I sit, after 20+ years of working with nonprofits and foundations of all sizes and scopes, the philanthropic field and the public interest are not well served by the current hamster wheel of a system.  

A nonprofit sacred cow: The December Mailing

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With Giving Tuesday upon us, there is no doubt that we are in the throes of the holiday giving season. Traditionally, this is the time when many Americans make their charitable gifts (end of tax year + holiday season = donation season). It is also the time when many, if not most, nonprofit organizations are in a frenzy of year-end fundraising.

Nonprofits will move mountains to get their December “appeal” in the mail (and email) on time. They will lose sleep. They will lose focus. They will sometimes even lose sight of what’s best for the organization, or their key messages, or their organizational priorities, just so they can get that appeal out the door.

I recently posed a question about the December appeal to some fundraising groups on LinkedIn, and boy, did the fundraisers come out of the woodwork to share their two cents! In service to the larger nonprofit/fundraising community, I’m sharing my discussion topic, and a sampling of the responses, with you:

“Avoiding the December Mailing: Not Getting Lost in the Shuffle”

I recently counseled a client, who is in the midst of developing a new case statement, NOT to stress out about doing their biggest mailing of the year in December. Their organization has another major milestone in the spring, and they can craft their biggest mailing around that. Not only will this give them time to thoughtfully complete their case statement and accompanying materials, but it also will avoid the problem of their mailing getting lost in the shuffle of the overwhelming amount of appeals that get sent out in December.
What are your thoughts? Is December truly the end-all, be-all of the annual campaign mass appeal? Have you had success with doing your biggest mailing at another time of year?

[Let me start by saying that there was a bit of a misunderstanding about my question – my fault, no doubt. This client is not completely forgoing a December mail and email appeal. They are still sending something in December. But they are waiting until spring, around a milestone in their organizational calendar, to do a larger mailing that will serve as a rollout and announcement of a new fundraising campaign.]

A sampling of responses:

I've wondered this myself as it a) seems risky but b) makes sense. Everyone is zigging so you zag. I'd say you should do something, simple case and reminders but you don't have to do your big thing. I think that time and quality piece is in play here too. Crap in December can't be better than quality in the Spring.

I've never been a big fan of end-of-year solicitations or appeals that rely heavily on deductibility in their argumentation. As a result, I've encouraged clients (and students) to time appeals for occasions or events (ideally annual ones) that make sense in terms of their organizations' work. That being said, even if their "big" appeal is at another time of the year, organizations with older constituencies should generally still to do a major appeal by US Mail & Email during 4th quarter. There are still just enough habitual 4th quarter givers out there to make this worthwhile.

There are so many reasons the year-end appeal works, and I would suggest cautioning them away from giving up on this tried and true approach. If they feel the direct-mail approach is too cumbersome, they might consider tasteful email solicitations with direct links to an online giving page.

Year-end giving is actually less effort because donors are, to put it simply, in the mood! The media - and now social media - around the holidays provide plenty of encouragement to give. Further, savvy philanthropists put aside money to make charitable gifts at this time of year.

I would also caution not to forego year-end giving, as statistically, donors give at year-end, and it's that psychological momentum and habit (along with the tax deduction) that gets donors to give. Perhaps the organization can do a controlled experiment, and at minimum, mail the donors who have historically given in fourth quarter. If the organization buys mailing lists, they can split the mailing, doing half in December as usual and the other half with their event.

Has the organization looked at their own data for the last three years and seen which of their appeals are the most successful? Our Thanksgiving and year-end appeal is substantially more successful than our February and April appeals.

Your client should send both mailings. Save the big case statement for the spring, sure, but allude to it in the winter mailing. You can't miss the opportunity to be a part of a family's year-end giving decisions. Those same people may well give again in the spring.

I wouldn't be comfortable giving up the December mailing altogether. As [name] mentioned above, hesitant to give up on something so tried and true. 

One of my smaller organizations that is ten years old started with a general appeal at year end. We know that many if not most people make their charitable contributions at year end so we are going to continue to do it. But we have a lot of events in the summer and last year we added a mailing targeted at that time to larger donors only. Using highly personalized letters, we asked for specific, larger amounts to start a major donor society... So I agree that a year-end mailing is not necessarily the end all and be all. There may be other great opportunities during the year for special appeals, even major appeals and you can target them to specific parts of your donor/prospect base.

I think those who say it's the only time that most people give might be assuming peoples' habits without really checking with them to see if that's truly the case. I would suggest that all nonprofits do a survey of their donors to see when THEY would like to give.

It depends on the cause of the NPO, but generally speaking most of the Social Service NPO's I've known generally receive roughly 40% of their annual donations during the November-December time period. NOT doing an appeal in December, could have serious impacts to annual revenue. But, if your client is let's say, Easter Seals, well then obviously a differently timed campaign could be more effective. So, again, depends on the NPO, but from what I've seen, tapping that good ol' Holiday Spirit typically proves effective. 

What conclusions can I draw from these responses?

• We fundraisers are, for the most part, reluctant to give up our sacred cows. Especially when those cows have a tried-and-true track record of being lucrative. Conventional wisdom is conventional wisdom for a reason.
• If you're going to follow conventional wisdom, do it strategically. We have the technology to easily track when people give, how much they give, if they are repeat donors, etc. Use that information to send a December mailing that is targeted, tactical, and creates an imperative to give. 
• We also have the capacity to be more donor-centric when designing our mass appeals. If our donors don't really care about giving in December versus giving during an organizational milestone/touchstone in the spring... then ask them in the spring. If they really want to give in December, follow their lead. To that point: 

 Really, it's not about December. It's about giving when people are in the habit of giving. It's about riding the wave of a spirit of generosity that is in the air. We can target our appeals for whenever that spirit is most alive. Customization, my friends, is key.

Foundation giving hits an all-time high

A new report from the Foundation Center, among other things, foundation giving in the US has reached a record high of $54.7 billion. The report estimates that foundation giving will continue to grow at a few points above inflation in 2014, with independent and family foundations showing an even higher rate of growth. According to the report, in 2012 the US was home to more than 86,000 foundations.

The link above will take you to a one-page infographic/summary. From there you can download the 8-page report, which is also very graphic-heavy and easy to digest.

I put less stock in the numbers related to how/where foundations are giving (e.g. to education, health... or to economically disadvantaged, women and girls...), mainly because the sample size was relatively small - 1,000 larger foundations. However, I do think that the scope of the foundation world, the total amount of foundation assets, the rates of growth, and other statistics are interesting, revealing, and even surprising.

In my own work with foundations, I haven't necessarily seen that foundations are giving more, or are giving more easily. Securing foundation gifts still requires a skillful approach to cultivation and solicitation, ideally a partnership between foundation and grantee. While foundations may be giving more, my sense is that they are giving in a more focused, specific way, and there are more organizations out there doing the asking, which makes for a highly competitive field.

 

August at Your Nonprofit: Gazing Back, Looking Forward

As I spend this August morning working in my favorite local cafe, I realize that I am engaged in some of the same planning and reflection that I encourage my clients to undertake during this time of the year.

On a rare day not filled with deadlines, appointments, and phone calls, I am taking a couple of hours to review and update my annual plan, assess the progress I am making towards my goals, remind myself of new projects I wanted to undertake that seem to have fallen by the wayside... in other words - get energized for the last few months of the year!

August is a great time to review goals, track progress, and get revved up for the fall months. So many nonprofits just throw up their hands at the beginning of August and say "Oh well, we can't get anything done this month. We'll just pick up our fundraising in September." Not so! This is a great time of year to gaze back and look forward. And it is an important time to plan for September, which can be a vital fundraising month. If you don't engage in some planning now, you'll be behind the eight ball come fall. Here's my August checklist for nonprofits:

• Revenue goals: are you on track? If so, can you do more of what is working? If not, can you course-correct?
• Donor stewardship: When is the last time your donors heard from you, not to ask for something, but just to offer an update? Should you send a friendly update in September or October? Can you start writing that now?
• Grant proposal and reporting deadlines: Which of your grants are expiring in the fall or early winter? Should you be planning to reapply? Can you set up a time to talk to the grantor about a reapplication? If you need to gather data for grant reports, now is a good time of year to do that.
• Government grants and contracts: For those nonprofits that get funding from government agencies... the government's fiscal year ends soon, which often means that they will release RFPs in August. Should you be on the lookout for these? Or, better yet, should you be proactively searching for opportunities?
• Twitter and other social media: Imagine your donors sitting on the beach with their smartphones, checking Twitter or Facebook. While they are scrolling through vacation photos or updates from friends, will they see updates from your organization? 
• September milestones: Are back-to-school time or the Jewish holidays important times of year for either your donors or your organization? If so, what do you need to do now to capitalize on that time (late August - early October)?
• Board: When your board goes back to work or back to school in August and September, will they also be turning their attention to the latest accomplishments and needs at your organization? Should you schedule a board conference call, meeting, update packet, or training?

Wishing you an August filled with dips in the pool, cool lemonade, and the pace and expansiveness that allow you to do some great planning for the fall!

Wanna win $100,000 for your favorite nonprofit?

The 2011 Social Impact Business Plan Competition is open until December 10. Qualified nonprofits can win "up to $100,000 in financial and consulting awards." The Competition is sponsored by Social Impact Exchange, which is backed by some heavy-hitters, including the Robert Wood Johnson Foundation and The Rockefeller Foundation. Find more information HERE, and spread the word!

Very small nonprofits - heads up!

If you are involved in a very small nonprofit - a PTA, a little league, etc. - heads up! You may not have had to file with the IRS in the past (if you had less than $25,000 in revenues), but there is a form you have to file now, and if you do not do so by May 17, you may lose your nonprofit status.

The IRS is concerned that word has not gotten out about this new requirement, and as many as 300,000 nonprofits may lose their status. I've heard/read stories about this in the Chronicle of Philanthropy and NPR over the past couple of days, so I'm doing my part to spread the word! You can find more information HERE.

http://www.irs.gov/newsroom/article/0,,id=222668,00.html?portlet=6 is a link to the IRS site with more information on this easy-to-file form.

Recession Obsession Sale

Times are tough at America's non-profits. Donations are down, and, at many charitable organizations, the need for their services is up. To help non-profits through the crunch, I'm offering a 30% discount on "Grant Writing Quick Tips" - a focused, finely-tuned e-book that offers all of the highlights of a foundation relations and grant writing seminar in one, high-impact resource.

From tips to help your grant proposal stand out from the pack, to guidelines and a worksheet on proposal budgeting, to strategies for finding and keeping donors, "Grant Writing Quick Tips" is a great resource for any non-profit organization (or a great gift for your favorite charity).

Check it out HERE.