Chapter 46. Planning for Sustainability | Community Tool Box

 

So your initiative has really taken off. Congratulations! Now you want to make sure that all of your hard work will not be washed away by time and inactivity. If you believe in the work you are doing, you want to find a way to keep it going when the grant lapses, the political winds change, or when someone important (even you!) must leave the organization. In short, you want to make your initiative a permanent part of the community. To do this you must sustain your initiative.

What does this mean?

Sustainability is the active process of establishing your initiative - not merely continuing your program, but developing relationships, practices, and procedures that become a lasting part of the community.

You may have several different reasons for wanting to do this, depending on what kind of an initiative or organization it is.

But one thing is clear: developing a plan for the sustainability of your initiative will increase its impact. And it will certainly make your life easier, because the group members will have a better idea of what they will be doing next month and next year. In this section, we will help you lay the groundwork you need to create such a plan.

What is a plan for sustainability?

Planning is a way to organize actions that will lead to the fulfillment of a goal. We've talked in other sections of the Tool Box about the importance of planning and how to do it.

Before you do that, however, it's important to look at what is unique to planning for sustainability. Your goal in this case is to maximize long-term benefit to your community. If you have created something of value, you don't want it to disappear. Because of this larger goal, planning for sustainability is more long-term than much of the other planning you will do, and it is also more all-encompassing. It asks you to step away from the daily details of running your organization and look at the picture as a whole.

How do you do that? By looking at the important questions, answering them frankly, and then using those answers to develop your strategic plan. Below is a list of eight questions that are basic to just about any sustainability effort. We suggest several key members of your coalition work together to answer them, and also decide together if there are other important questions unique to your initiative that should be discussed.

• What is the nature of our initiative (or organization)?
• What are the goals of our initiative?
• What has our initiative done?
• What publicity has our initiative received?
• How is our initiative structured and governed?
• Does our initiative have sufficient staffing?
• Is our budget sufficient to cover expected costs now and in the future?
• What are some obstacles we may encounter? And how do we get around them?

Example: We've worked really hard for over a year now. We believe our efforts to decrease the rate of homeless mentally ill in our city have been helpful; however, we cannot keep having bake sales every time we need money.

Because our initiative is new and lacks structure and legitimacy, we miss out on opportunities for funding. People don't even really know who we are. And besides, our fearless leader, Karin, is getting tired. He's been working over twenty hours a week in addition to his regular job on this initiative, and at this rate he'll surely burn out.

If we don't do something soon to provide our initiative with the staying power it needs to continue on into the years to come, it may be in trouble. But how do we go about doing this? How can we make sure our initiative will last?

• Here's the key point: Planning to sustain our initiative will help us if we want it to be around in the future. Answering the questions above will save us time in the long run, and increase the chances of accomplishing our goals.

Why should you plan for sustainability?

• To give yourself the time you need to solve the problem. The larger the problem, the longer it often takes to solve. In some cases, a full solution may not come about for years.

For example, we're not going to end child abuse overnight, sadly enough. If the issue you are working on requires a similarly long-term solution, you'll want to be around for a while.

• To help you map out how to get from point A (an initiative with little structure and an uncertain future outlook) to point B (a sustained initiative with the structure and legitimacy it needs for future years of service).
• To make your sustainability efforts more efficient and effective. A plan is important because it focuses on the set of steps you will need to go through to achieve your ultimate goal, in this case an initiative with lasting impact. A planned effort will almost always be superior to an unplanned, disorganized attempt.
• Also, developing a plan to keep your initiative alive will almost certainly be more cost-effective than starting a new program, or starting your initiative all over again!

When should you plan for sustainability?

Planning for sustainability can't come any too soon. Begin as soon as your organization creates its vision, mission, and objectives. Even as you consider which strategies to pursue, you should consider the sustainability of the planned efforts. Planning for sustainability is a process, not a one-time event.

How do you plan for sustainability?

As we mentioned above, the first step in planning for sustainability is to answer the important questions. Let's look at the eight key questions (or steps) given above in greater detail.

Step 1. Ask yourself: What is the nature of our initiative or organization?

Not all initiatives or organizations are the same. The decision to sustain your initiative or organization depends a lot on your purpose and future plans. Before you make any decisions about your initiative or organization's future, ask yourself, "What is my initiative all about?" and, "Where do we see ourselves in two years time?"

Initiatives and organizations tend to be purposeful. There's little doubt you will have answers for these questions. Otherwise, you would probably not have banded together in the first place. Now, you need to articulate or reaffirm your purpose.

Example 1: You may be part of an initiative to decrease the rate of teen-age pregnancy in your city. This is not an easy issue with a quick fix. It seems obvious that your organization is planning on staying around for a while. You must take steps to make sure your organization has the durability to survive in the non-profit world. But what do you do from here?

Example 2: Conversely, you may be part of a city-wide initiative to clean up the area around the river that runs through your city. People involved in this initiative may have varying reasons for getting involved, but the purpose of the initiative is clear: to clean up the area around the river. What is unclear is whether or not your one-time cleanup will do the job. Will or should this group of people ever meet again after the cleanup is complete? Will or should an organization form to clean up all of the city's eyesores? Here, you have choices. The answers to these questions aren't necessarily apparent.

An initiative that plans to meet in the future with a definite mission may feel that it has a need to develop an ongoing structure, whereas a group of volunteers that band together occasionally to clean may or may not. Thinking about the nature of your initiative or organization will help you decide.

Step 2. Ask yourself: What are the goals of our initiative?

Goals are important to any organization, no matter how large or small. Community building is not easy work, but it is rewarding and it can be fun. A key to getting satisfaction from any kind of community change effort is to be able to see your hard work turn into positive results. One way to mark these results is the achievement of your goals.

In order to have the satisfaction of seeing your goals fulfilled, you must have clear goals from the start. The goals of your initiative may seem to range from "a piece of cake" to "overwhelming," but don't worry - the whole reason you are planning to sustain your initiative is because you are planning to be around for a while.

So relax. Some initiatives may even produce unexpected positive results.

Example: Your organization may have formed to see that a set of traffic lights be put up at a dangerous intersection within your neighborhood. Since your "traffic light initiative" became widely known, neighbors have been coming out in droves to show their support. During your weekly meeting to discuss the traffic situation, some people have voiced other neighborhood concerns. Now your initiative must ask itself what it wants to be when it grows up.

What are its goals?

• Will your initiative be satisfied with the appearance of the one traffic light it set out to get? Or
• has its goals changed?
• Do people now wish to become a neighborhood organization with an open forum for neighbors to discuss concerns?

Once your initiative can decide what its goals are, you will be one step closer to its sustainability.

Step 3. Ask yourself: What has our initiative done?

When you start planning to sustain your initiative, it's an especially good time to step back and survey what you have accomplished so far. By seeing your successes and possibly re-examining some mistakes you may have made along the way, you will better understand where you are and where you're going. Take those accomplishments and use them to plan! Build on what you have done. You've learned a lot since you started. If you've done well, do more of the same, or possibly branch out in new directions. If you've struggled, take a look at why. Your accomplishments should help you to grow!

Example: Our initiative to form a coalition of agencies to lower the incidence of teen violence after school has met with mixed success. After only one year in existence, our initiative, TEVAS (Teens Erase Violence After School), has four member organizations, including the originators. The Big Brother Program is encouraging its big brothers to take their little brothers to the after-school basketball league; the YMCA is donating the basketball court time; and the local university has arranged for students to run the basketball league and teach the teens social competence skills.

These things are great! But stepping back and looking at our initiative more critically, we can see that only a fraction of our target population is involved in the league. For example, not everyone has a big brother, although some teens are joining on their own. In addition, we may be excluding teens who can't play basketball well and may be afraid to play for fear of embarrassing themselves. Also, we don't know how well the university students are teaching the social competence skills, nor if the teens are learning. We've heard reports that the basketball is great but the classes are "boring." And finally, we haven't built any evaluative component into our initiative. As we've seen just by stepping back, things are going well, but we're not perfect. The more complicated things get, the more we'll need to be able to objectively evaluate how things are going. We need to analyze and evaluate our accomplishments if we want to continue and improve our work in the community.

Wow! This isn't that hard. What's next?

Step 4. Ask yourself: What publicity has our initiative received?

Are you public yet? Who knows about your initiative? Let's hope it isn't the best -kept secret in the world. Your organization has probably worked very hard, and the more people who know about its existence the better.

Remember: You want people to know about you. You want your name in people's minds. If your initiative is kept quiet, people may wonder why - or worse yet, they'll never hear about you at all. An effective community organization is too good to keep secret. Besides, if you want new members, keeping quiet is not the way to go about it. Announcing your existence will make your organization feel confident. Opponents will begin to worry about you. Supporters will be happy you're around, and your initiative will have more staying power. It's a win/win situation.

How public do you want to go? Well, that depends on you. You may want to put flyers on every car in the city, advertise in the newspaper, participate in a demonstration, or even arrange a press conference to proclaim the existence of your initiative. It's up to you.

However you decide to publicize your work, just remember that what's important is that the public becomes aware of who you are, what you are doing, and the fact that the door is always open for people interested in helping out.

Example 1: Jon's initiative is not going so well. He is trying to get the city to remove all of the lead paint from the run-down buildings in the downtown area. Jon began his initiative by slipping flyers under the doors of a few people he thought would be interested in doing something about the lead paint problem. But whenever the group met, there were always fewer than ten people.

Few people are even aware of Jon and the efforts of his group. The initiative seems to be a secret organization. Not only are they small in number, but when their leader, Jon, contacted City Hall to discuss the removal of lead paint, they said that they had never heard of his initiative.

Also, members of Jon's group encountered resistance from Jon when they suggested that the group either try enlisting the help of the city council or demonstrating near City Hall. Jon was worried that the City Council would definitely say "no," and demonstrating would only anger the city.

Jon's method of continually meeting and brainstorming with his core and only members seems to work less and less as the weeks drag on and nothing gets accomplished. Members have been quitting and the initiative is all but dead.

Some problems Jon's initiative faces:

• Few people know about it.
• Few people are involved with it.
• The public is still unaware of the issue and Jon's initiative to fight it.

Marcelo's initiative is having better luck.

Example 2: Marcelo's initiative to keep some major corporations from dumping sludge in his town is going well. Marcelo has been quite a vocal spokesperson for the cause, being quoted in the local newspaper virtually every day. The initiative, Neighbors Against Sludge Around Here (NASAH), received wide press coverage when it picketed one of the proposed dumping sites. They have also had a few press conferences near the sites. The publicity his organization has received has prompted many residents to write to their town council, senators, and congress to protest the proposed sludge. At the latest "standing room only" town meeting, residents voted not to allow their town to be a dumping ground for sludge.

In Marcelo's case, publicity is doing a lot of the hard work for him. The more awareness exists around a problem, the easier it should be to get support.

The difference between the two examples is clear. Although both the issues of lead paint removal and sludge are important, neighbors have been vocal and supportive of Marcelo's initiative because they are more familiar with it. But in Jon's case, there has been little support for the initiative because it has been kept quiet.

Marcelo's initiative was publicized, and Jon's kept hidden. Which do you think is more likely to last?

Step 5. Ask yourself: How is our initiative structured?

The term "structure" may carry positive or negative connotations. To some it may mean something well organized and efficient. To others, it may mean endless paperwork or rules and regulations. But however one looks at it, some structure is necessary, because without it things fall apart.

Initiatives and organizations operate within different degrees of structure. The structure of an initiative is closely related to the ease or difficulty of its sustainability. Generally speaking, the better defined the structure, the easier sustainability becomes.

To help determine how structured your initiative is, try to answer these questions:

• Does your organization have clearly defined policies regarding membership, elections, establishing committees, changing laws, and spending money?
• Do you meet regularly, at the same time and place?
• Are there clear policies about how meetings should run?

The answers to these questions will help you decide how structured your initiative is. Knowing how well your organization is structured will help when it comes time to sustain. If you decide it needs more structure, you can start taking steps to build this in.

Another reason you want to sustain your initiative is so that it can continue to run smoothly when the present leaders have moved on, and when new leadership emerges. Grooming new leaders is one of the most important things an organization should do if it wishes to survive. Knowing how the organization works, and passing that information down to the next generation, will save these new leaders from some of the pitfalls you have experienced.

Example: Our initiative to reduce the rate of teen pregnancy has been around for a while, but it still needs structure. So far, we have done things mainly by the seat of our pants. Our dedicated leader, Betsy, has had the burden of making most of the decisions herself with the help of a core group of leaders. The reason for this is our initiative doesn't have any policies regarding decision-making. Because Betsy is the leader, the other members feel it is Betsy's place to make all the decisions. But Betsy won't be able to be the leader forever, and we're not sure what will happen to the initiative when she leaves.

Creating a sufficient amount of organizational structure, and transferring it to new leadership, will help ensure your initiative's survival. And if you know how your organization works, but you haven't already written it down, now would be a good time!

Step 6. Ask yourself: Does our initiative have sufficient staffing?

Basically, this question is easy; it doesn't involve brain surgery. Does your initiative have sufficient staffing? Do some members of your organization feel like they're doing more than their fair share? If so, you may want to recruit more members, take on more volunteers, or hire more paid staff, depending on your situation.

You may also want to consider spreading out the work. Naturally, some organizations have so much work that no matter how it's delegated, there's always too much. Other organizations may find that they have enough people power; they just need to split up the workload more fairly.

Think about which situation your organization most closely resembles; that will provide you with an answer. Remember, your organization has a much better chance or surviving if the workload is well distributed, so that everyone has at least a small piece of the action.

For more information, see Chapter 9: Developing an Organizational Structure for the Initiative.

Step 7. Ask yourself: What are some obstacles we may encounter? And how will we get around them?

Anticipate obstacles that may occur. Things don't usually run perfectly, and anything can and sometimes does happen. By knowing the history of your organization and that of the groups you work with, you'll have an idea of where many problems might occur, as well as how to prepare for them. Be prepared to overcome likely obstacles, and keep an eye open for those that spring up out of the blue. A hurdler doesn't worry about tripping over hurdles; he or she hurdles them. You must be prepared to do the same.

Step 8. Ask yourself: Is our budget sufficient to cover our expected costs now and in the future?

This question needs to be considered very carefully; it may determine the life span of your initiative. If you feel you have enough funding to cover your costs, you may want to start thinking about expanding. If you feel you don't have sufficient funds to cover your costs now and in the future - it's time to start thinking seriously about raising money.

In Summary

Answering the eight questions brought up in this section isn't enough, on its own, to ensure that your program will remain in existence through changes in leadership or funding, or when other important events affect your initiative. Nonetheless, answering them is an important "first step" to be taken before you write your action plan for sustainability. This thorough understanding of what you stand for, what you want to achieve and how to get it will almost certainly lead to an effective, well-respected organization - in short, one that's almost guaranteed to be around for a long, long time.

Example 1: Sustainability in WASH governance programmes

Taken from the Sustainability in WASH governance programmes, A WaterAid and Freshwater Action Network publication. Written by Hilary Coulby.

 

“For WaterAid and FAN, sustainability means that the benefits and progress achieved during the life of the programme not only survive and continue long after it has ended, but also continue to progress on an upward course. This definition implies that there is no end point for sustainability. Even if a completely ideal state is reached, this too must be continually sustained. If at any time the benefits of the programme begin to disappear and communities slip back into the pre-intervention situation, then the intervention cannot be said to be sustainable.”

This handbook focuses on:

• Sustainability definitions and frameworks.
• Achieving sustainability (at local and national levels).
• Sustainability for non-governmental​ organisations (NGOs) and their networks.
• Limits on the reach of NGOs and international NGOs (INGOs) and implications for their sustainability strategies.

Visit this guide and additional sustainability handbooks online at: www.wateraid.org/gtflearninghandbooks

 

Example 2: Jackie's Internship

Jackie was a graduate student in community psychology at a state university. As part of the rigorous training for her Master's degree, she was required to complete a two-semester internship.

Jackie jumped at the chance to get some hands-on, practical experience in a setting where she could learn about community organizing in a carefully supervised placement. She chose to do her internship in the office of the city's youth activities director.

Jackie arrived for the first day of her internship ready to learn all about organizing activities. Her supervisor, Takisha, informed her that she was to work on the "Annual Women's Basketball Tournament."

Jackie was so excited. She had attended this tournament for the past three years. "Great!" Jackie told her supervisor, "Where's the contact list of sponsors?"

"Oh, I don't know what our last graduate student did with it," her supervisor said.

"That's okay; do we have the mailing lists of girls that participated last year?" Jackie asked determinedly.

"Not that I know of," Takisha answered.

"No problem," Jackie said. "But do you know where the source book explaining how to organize this event is? It would save me a lot of time and trouble. "

"Sorry Jackie, I moved to this position last year after the tournament. The woman who had this job didn't mention anything to me about the tournament. But don't worry ; didn't you say that you wanted a challenge?"

Jackie sat down at her desk and wondered how she was going to recreate the tournament that had taken place so flawlessly for the past five years, starting from scratch. Jackie was looking forward to a challenge, but she did not consider reinventing the wheel a good use of her time. Her time could have been spent organizing the tournament and finding ways of making it bigger and better. Now she was starting from square one.

As Jackie organized the tournament, she clearly documented her every action so that the next person in her position could use what she had done to make the next tournament go more smoothly. Jackie realized that it was necessary to plan to institutionalize the tournament.

Jackie clearly indicated in the "Tournament" source book she created:

• The goals of the tournament
• The accomplishments of the tournament
• The types of publicity she used to promote the tournament, and the extra media coverage it received
• The structure with which the tournament ran
• The budgetary and staffing needs for the tournament
• The obstacles she encountered (and thanks to her predecessors, there were many)

Jackie planned out a way for the tournament to go off smoothly for years to come. The tournament was a success; and thanks to Jackie, the next intern won't get stuck starting from scratch. The tournament will almost be able to run itself.

You don't have to be a graduate student to perform this kind of work. Jackie's documentation, and her tournament source book, did not do the entire job of institutionalizing her program. But it certainly helped!

___You understand that institutionalization is the active process of developing relationships, practices, and procedures that become a lasting part of your community.

___You understand that planning for institutionalization gives you the time you need to solve the problem.

___You understand that it helps you map out how to become an institutionalized initiative with the structure and legitimacy needed for future years of service.

___You understand that it makes your efforts more efficient and effective.

___You understand that it is cost-effective.

___You understand that you want to begin planning for institutionalization once you have a clear idea of your goals and the opinions of your constituency.

You know the answers to the following questions:

___What is the nature of our initiative?

___What are the goals of our initiative?

___What has our initiative done?

___What publicity has our initiative received?

___How is our initiative structured and governed?

___Does our initiative have sufficient staffing?

___Is our budget sufficient to cover expected costs now and in the future?

___What are some obstacles we may encounter? And how do we get around them?

Tool #1: Twelve Tactics for Sustainability

For a downloadable worksheet in Microsoft Word, click here.

 

Tool #2: The Matrix Map: A Powerful Tool for Mission-Focused Nonprofits

The Matrix Map is a visual tool that plots all of the organization’s activities—not just its programs—into a single, compelling image. By illustrating the organization’s business model—through a picture of all activities and the financial and mission impact of each one—it supports genuinely strategic discussions. Read more.

 

Finding and keeping money for a group to do its work can be a challenge. However, financial sustainability is essential to allowing you to stay in the game long enough to accomplish your goals.

Sustainability should be planned for early on, even as your initiative is conceived. This section provides an overview of common strategies for sustainability.

Strategies for financial sustainability

Marketing your organization

No matter what other strategies you use in pursuit of financial sustainability, you will need to think about marketing your organization. We've all seen commercials, giveaways, and sponsorships of events by corporations, but how about marketing by and for nonprofit groups?

One of the best definitions of marketing for nonprofit organizations comes from the Amherst H. Wilder Foundation:

"Marketing is a process that helps you exchange something of value for something you need."

These kinds of exchanges occur all the time. For example, an adult literacy program offers education and skills training, which will lead to a more capable work force for employers in the community. In return, the organization that runs the program needs clients, referrals, and resources to allow the program to continue.

The concept of marketing requires you to look at everything you do as potentially helpful or harmful to your campaign. When the receptionist at your office picks up the phone, you probably don't think of that as part of marketing, but it certainly is. How he or she greets the caller says a lot about your organization: what you do, how professional or casual you are, and so on. The same is true of the follow-up to that phone call--whom the caller talks to next, the information he receives in the mail, or the visit he makes to the agency. Image may not be everything, but it probably counts for more than we would like to admit.

Marketing includes:

• Image-building
• Friend-raising
• Membership development
• Community relations
• Political activities
• Citizen education

These activities are critical for building goodwill among potential donors. 

Sharing positions and resources

Another strategy for sustaining your initiative is collaboration with other organizations. Collaboration can take place in a variety of ways, from writing grants together, to sharing such resources as space, equipment, or staff. 

The important thing to remember when collaborating is to think carefully about who your natural partners are, and whether you share enough of a philosophical and practical base to work together successfully. Before you enter a collaborative arrangement, ask yourself whether and why sharing positions or resources would meet both your needs.

Becoming a line item in an existing budget

A line item is a part of a budget that is dedicated to a particular need. For example, line items often exist for office supplies, payroll, and travel. Parts of your initiative may be picked up as a line item by another organization, especially if your operating costs aren't too high. For example, a church or council of churches may be willing to pick up the cost of running the local Peace and Justice Coalition, if the main costs are office space, a half-time coordinator, and basic office and mailing expenses.

An organization may decide to pick up one of your programs as a line item. For example, the local school district may be willing to pay for a mentoring program your organization has started.

Incorporating activities or services in organizations with a similar mission

Your organization may start an activity or service with the goal that, within a few years, that activity will be taken on by another community group. Ideally, the group will plan the activity with representatives from the community group that will be responsible for the program. 

For example:

• A coalition might begin an after-school program, and plan for the YMCA to pick up the program after a few years.
• An organization might develop a school-based alcohol and drug abuse prevention program, with the goal of shifting its management to school health educators.
• The coalition might start a program to prevent homelessness, and work with the interfaith council to adopt it.

Applying for grants

Grant money may come from public sources or from local or federal foundations. Many communities have some community foundation or local trust whose funds must be spent locally, so take advantage of them.

For our purposes in this chapter, grants mean monetary awards to your group or organization to carry out a community project you have proposed. However, grant awards are sometimes given in resources other than cash (e.g., travel expenses, time off the job), and occasionally, especially for research, grants can be made to individuals as well as groups.

Tapping into personnel resources

Personnel resources are people and positions that exist in other organizations and that can be shared by your organization for little or no cost.

Some common examples include:

• Time-share positions
• Volunteers
• Interns
• College work-study positions
• Staff-on-loan
• In-kind donations of time

Soliciting in-kind support

In-kind support refers to resources other than money that you would have otherwise needed to pay for with money. For example, the local hardware store might donate paint for renovations, or a local food bank may receive in kind support in the form of a commercial refrigerator or donated food. When someone volunteers to give you a service, supplies, or free help, you're receiving in-kind support.

In-kind support can be an important part of a sustainability plan. If your group is going to succeed, you'll need more than just money: you'll want goods, people, and services, too.

Developing and implementing fundraisers

A fundraiser is an event sponsored by an organization to raise money for the group and its programs. Fundraisers usually require the group to provide a product, a service, or an event that will encourage others to contribute money.

Examples of fundraisers include Girl Scout cookie sales, car washes, and carnivals. In each case, the group charges money for a product (cookies), service (car washing) or event (carnival) to raise funds to support their cause.

Pursuing third-party funding

Third-party funding takes place when someone not directly involved in work being done provides resources that allow two other parties to interact. The funder in these instances is called the "third party."

For example, if a staff member and student are having counseling sessions, an HMO may reimburse the staff member's time if the student belongs to that insurance plan. Or, a private business may pay for the salary of someone from a nonprofit organization to do job training with adolescents.

Usually, the third party has some interest in providing financial support.

In the examples above, the HMO has an interest in a healthy client, and the private business has an interest in a better-prepared workforce in the area.

Developing a fee-for-service structure

A fee-for-service structure requires that clients pay for services as they receive them.

For example, the local crisis counseling center may charge for sessions or parents may pay to attend a "Living Through the Teen Years" workshop.

Charging fees may make your group's services less available to vulnerable populations. To counteract this, some groups use a sliding scale to make services available to more people. It's also not uncommon to have a policy of helping everyone regardless of ability to pay; if potential clients are unable to pay, the fee is waived.

Another option is to offer some services free of charge, but have a fee for others.

Acquiring public funding

Another way to sustain your initiative is to obtain public money or resources. This is often money appropriated from a state legislature, city council, or other similar governing body.

By working with your legislators or local elected officials, you may be able to acquire public funding for your group on an annual basis.

Securing endowments and planned giving arrangements

An endowment is a gift given to an organization which is invested so that an annual income is produced. An organization uses the interest earned by the fund and leaves the principal to gain further interest.

Planned giving arrangements are arranged in the present and allocated at a future date. These charitable gifts may be acquired through wills, trusts, gift annuities, life insurance, securities, and real estate.

Planned giving arrangements are referred to as deferred gifts. Deferred giving is an arrangement between a donor and an organization in which the donor earmarks funds for an organization's future use. When the funds become available to the organization is decided upon by the donor. Some allow the organization to use a certain percent of the funds during the donor's life, while others make the funds available upon the death of the donor.

Establishing membership fees and dues

Membership fees or dues can be another method for generative revenue.

The main advantages of using this strategy to gather resources include:

• Dues are a simple form of income to generate.
• Because they come from your own members, dues test commitment to the group.
• Membership dues increase the organization's self-reliance.

The main drawbacks:

• Dues tend to yield less money than outside sources.
• Sometimes, not enough potential members can afford paying dues to make dues collection worthwhile.
• Dues make money a condition of membership, which may be contrary to your group's principles.

Some coalitions skirt this last point by calling dues "donations" or "sponsorship fees." Similar to that which can be used for fee-for-service programs, a sliding scale can lighten the burden for some members. You may also have different support expectations for organizations and single individuals.

Making a business plan

Some groups create a business to support their work. A business plan is a written document that describes in detail what kind of business you intend to operate, how you intend to operate it, and why you believe it will succeed. It is backed with logical, factual, and financial documentation. A business plan is similar in form to other types of plans you may have seen, however, "success" in this case is in large part defined by making a profit.

Your group may decide to form a business as a nonprofit organization or form a separate "for-profit" side of the organization in order to avoid some of the regulations put on not-for-profit organizations.

Choosing among strategies

The above list of strategies gives you an idea of some possibilities for sustaining your initiative. No one option is best and there is no need to choose only one of the strategies; they can be combined. And more strategies can always be created.

The question remains, however: how do we make these decisions? What is the best way to choose among strategies, and pick the one (or several) that make most sense for your organization?

Look over the steps below, decide which make sense to you, and modify the process to fit your own needs.

• Decide who will make these decisions. If you have developed a financial sustainability committee, as we discuss in the next section of this chapter, these are the folks to do the work. If you don't have such a committee in place, you might consider forming one (or at least a temporary working group). Board members are often key to this type of committee. Choosing among strategies is easier, more enjoyable, and more effective with shared leadership.
• Have your mission, vision, and objectives in mind as you begin this work. This should help to orient you to what is important to think about.

If you are working in a group, you might make a handout with your mission, vision, and objectives listed, so that they are right in front of members as they work. At the very least they are worth stating at the beginning of the meeting.

• Brainstorm possible strategies for your organization. You might start with the list given in this section, but be sure to think about options in the context of your own unique situation. Which of these possibilities definitely won't work? Which need to be modified for your group? How? Are there other possibilities that are unique to your organization?
• Gather input from key people, such as current funders, staff, volunteers, and clients. The more people you listen to, the more you can gain from different perspectives.
• Choose the strategy or strategies that make most sense for your organization. Diversifying your funding by using several different strategies provides security should one source dry up.

Remember to be careful that you don't use all of your time and personnel resources trying to earn money or obtain resources. Try to strike a good balance.

Also, take advantage of your current resources and talents. If your group has someone who is very good at writing winning grants, for example, write lots of grants. If, on the other hand, you have had excellent luck with state legislators, then work with them to continue getting state funding. In short--build on what works.

In Summary

There are many possibilities for funding. This section has only touched on some of the more common of these prospects; later sections go into more detail on each strategy. Think strategically about your funding needs to develop a vibrant approach that will allow your initiative to thrive for a long time to come.

Tactics for Sustaining the Work: Together on Diabetes Sustainability Tools

The Together on Diabetes initiative assembled sustainability resources drawn from the Community Tool Box. The custom tips and Together on Diabetes-related examples of sustainability are supports for the ToD projects as they plan for the long-term sustainability of their initiatives. This mashup was done in collaboration with the KU Center for Community Health and Development, an evaluation partner in the ToD initiative.

___Financial sustainability is an essential goal of your organization.

___You have decided that you will pursue financial sustainability.

___You have decided who will make the decisions.

___Your mission, vision, and objectives where in mind as you began this work.

___You have brainstormed possible strategies for your organization.

___Key people such as current staff, funders, volunteers, and clients have given input.

___You have decided which strategies are best for your organization:

• Marketing your organization
• Sharing positions and resources with other organizations
• Becoming a line item in an existing budget
• Incorporating activities or services in organizations with a similar mission
• Applying for grants
• Tapping into personnel resources
• Soliciting in-kind support
• Developing and implementing fundraisers
• Pursuing third-party funding
• Developing a fee-for-service structure
• Acquiring public funding
• Securing endowments and planned giving arrangements
• Establishing membership fees and dues
• Making a business plan

Tool: Twelve Tactics for Sustainability

For a downloadable worksheet in Microsoft Word, click here.

You believe in your work, and naturally you want others to believe in it. In fact, there are many ways your initiative can benefit when you encourage others to adopt its mission and objectives. This section shows what your initiative can gain by promoting your mission and objectives, and how you can do so effectively.

What do we mean by promoting adoption of the initiative's mission and objectives?

Promoting adoption of your initiative's mission and objectives can mean many things. In a broad sense, it can mean getting others--potential funders, other organizations, or members of the community--to think your program's mission and objectives are generally a good idea. However, promotion of your program's mission and objectives can be part of a more tangible goal, such as:

• Getting others to provide financial or in-kind support
• Getting other groups to do the same types of things you do, or to partner with you in an initiative
• Getting others to promote your mission and objectives.

Promoting your organization's mission and objectives is a little bit different from promoting your group's activities. While you're probably accustomed to promoting what your group does--teaching adult literacy classes, providing meals to homeless people, or setting up infant immunization drives, for example--promotion of your mission and objectives involves, as much as anything, selling what you stand for. There are many ways you can go about doing this; this section will show you how.

A mission statement describes your organization's statement of purpose--what your group is going to do and why.

Objectives are short-term goals that your organization can use as intermediate markers of its progress.

As an analogy, suppose you decide to travel from Seattle, Washington to Memphis, Tennessee to visit Graceland. Your mission is to see Graceland. On your first day, you decide to drive 839 miles from Seattle to Salt Lake City. The second day of driving takes you to Kansas City. Your last day of driving ends in Memphis. These cities that you visit along the way are short-term goals, or objectives, with which you can gauge how much progress you're making on the way to your final destination.

Why promote the adoption of the initiative's mission and objectives?

By promoting your initiative's mission and objectives, you encourage others to take them to heart and make them their own. This will increase the overall impact of your work.

Promoting the adoption of your mission and objectives will also help insure that your work will continue when or if your group is no longer around (heaven forbid!)--or if you simply decide to move on to other things.

Your mission and objectives are part of your legacy, which you are handing down to your spiritual heirs. As with many non material legacies, you may want to line up your heirs in advance and maximize the chances that they are going to carry on your work.

Whom should you encourage to adopt your mission and objectives?

First and foremost, you will want to connect with people or groups that are similar to you or your group. They are more likely to be attracted to you and your work; and because of their similarity, they are more likely to have the people and other resources (e.g. time, money) to keep your work alive and moving forward.

So, for example, if you are a labor union working on occupational safety issues, you may want to target other unions to participate in your work. Parent-teacher groups aren't going to do much for you here. But if you want to work on increasing parental control of local schools, your primary target may be other PTAs.

To insure the longevity of your mission and objectives, you will also want to try to appeal to broader audiences as well. This is best done by winning over those who are influential to the general public.

These "opinion leaders" can be the members of local groups, which may include:

• Civic organizations
• Business groups
• Grassroots organizations
• School boards
• Labor unions
• Parent-teacher groups
• Church organizations
• The local press (editors, editorial boards, or just the beat reporters that normally cover your group or initiative)
• Health organizations
• Elected and appointed local government officials or entities
• Grant makers

Depending on your goals, state/regional groups and national groups can also come into play.

Example: Potential adopters of the Jackson Falls CARE Program's mission and objectives

In Jackson Falls, the Child Abuse Reduction through Education (CARE) Program seeks to reduce the incidence of child abuse through a variety of educational means. Some of its methods include teaching anger management and parenting skills to parents, training teachers and school counselors to recognize signs of abuse, and teaching children to report any sort of abuse happening to themselves or their friends to a responsible adult. Lauryn Yamamoto, the director of CARE, wants to find other groups to adopt CARE's mission and objectives.

Care's mission:

"To lower the incidence of child abuse by educating parents, children, and school personnel about prevention techniques and the importance of reporting abuse early."

A few of Care's objectives:

• To reduce the reported incidence of child abuse in Jackson Falls by 15% by January 1, 2001.
• To have at least 200 parents complete the CARE parenting skills seminar by October 1, 2000.
• To give annual presentations on Care's peer advocacy program to all students in grades 1 through 8 in the Jackson Falls Public Schools.
• To have 150 students per year go through Care's peer advocacy training program.
• To do a one-day in-service training each semester for all teachers and counselors in the Jackson Falls Public Schools.

Groups that CARE might be able to get to adopt the mission and some of the objectives:

• The Jackson Falls Parent-Teacher Association
• The Child Welfare Association
• The local chapter of the National Education Association
• The police department
• Senator H. J. Bigpockets
• The local Social and Rehabilitative Services office
• Interfaith Council
• The local Headstart office
• Area substance use programs
• The women's shelter

How do you get others to adopt your mission and objectives?

Here are some ideas to help you bring other groups and influential persons around to your way of thinking about what sort of things need to happen in your community and convince them to endorse your group or initiative's ideals, principles, and programs. Getting others to adopt your mission and objectives isn't something you do by following a specific series of steps, so you don't necessarily have to follow all of these suggestions. They're meant as a starting point for you and your group to begin making important contacts in the community.

Decide who you want to adopt your mission and objectives.

Figure out where you want to concentrate your efforts. As we said before, groups with similar goals to your own will be the most likely targets.

For example, if you run a coalition of gay, lesbian, bisexual, and transgender organizations working to change the human rights code in your town, you will probably want to work on getting the support of other organizations that deal with minority group issues.

Cultivate bonds with those persons or groups.

Get to know these people! This can be done informally.

For example, the new director of the Labrador Falls Humane Society called the president of the local chapter of People for the Ethical Treatment of Animals, introduced himself, and set up a meeting over coffee to discuss goals the two groups had in common. As a result, the two groups eventually collaborated on several very successful anti-cruelty initiatives.

Never underestimate the power of schmoozing -- informal networking and casual conversation. Giving people a favorable impression of you personally will lead to them having a more favorable impression of your organization or initiative and what you're trying to accomplish. Ways to get to know people and groups whose goals are similar to your own -- include doing things like attending conferences and workshops, getting involved in regional and national coalitions, and participating in email lists related to your field or purpose.

You can also work on building formal partnerships, collaborative agreements, and coalitions. These ways of joining forces offer those groups and people you want to reach out to a more "official" way of adopting your mission and objectives.

Get the word out through the media.

Make yourself known. Any organization that is talked about in the newspapers and on television all the time is going to be more likely to draw support than one that nobody has ever heard of.

How much effort you put into this depends on how far you want to cast your net. If you are looking simply for local groups to adopt your mission and objectives, then use the local media. If you want others across the country or planet to pick up your work, then you're going to be online a lot, pushing your own website, and taking advantage of what electronic technology has to offer.

Show that your initiative has been tested in practice and proven to yield positive results.

Your chances of having others take your mission and objectives to heart will be greater if you can prove that your ideas work, that your programs accomplish what they're supposed to, or that your services are needed. Therefore, having proof of your accomplishments--usually in the form of evaluation results--is crucial.

Focus on mutual interests.

You've already identified groups with similar interests to your own. Now, as you prepare to approach these groups, it's time to zero in on the specific interests you have in common, and present yourself to these groups in terms of those interests.

Example: Shared interests of the Jackson Falls CARE Program and potential adopters

Back in Jackson Falls, Lauryn Yamamoto is trying to sell various local groups on adopting the mission and objectives of the CARE Program. She has made a list of groups to approach, and now she is making notes on what common interests her organization may share with these groups. With most of these groups it will simply be that both CARE and the group want what's best for the children, but Lauryn is trying to come up with a "spin" that is unique to the group whenever possible. Here's a look at what Lauryn has on her notepad:

Groups or individuals that Lauryn is thinking of approaching:	Interest(s) that CARE shares with each group or individual:
Parent-Teacher Association	We both want what's best for our children.
Child Welfare Association	We both want to protect our children from harm.
Local chapter of the National Education Association	We both want children to learn--and being healthy, happy, and free of abuse is more conducive to children's learning.
Police department	We both want to reduce child abuse in our community.
Senator H. J. Bigpockets	We both want to fund programs that help reduce child abuse in our community.
Local Social and Rehabilitative Services office	We both want to reduce child abuse in our community.
Interfaith Council	We both want what's best for the children and to strengthen our community's families.
Local Headstart office	We both want to reduce child abuse because we want children to have a better chance at success in life.
Area substance use programs	We both want to reduce child abuse because it goes hand-in-hand with substance use.
Women's shelter	We both want to reduce child abuse because it goes hand-in-hand with domestic violence.

When Lauryn talks to representatives of each group, she will stress the specific issues the group and CARE have in common.

Avoid issues that aren't pertinent to your shared interests.

You may have to do a little fancy maneuvering to get some groups to adopt your mission and objectives, especially if your group or initiative is at all controversial. Some groups may not be willing to adopt all of your objectives, so you may have to try to get them to adopt only those that they agree with. For example, let's say you run a teen pregnancy prevention initiative, and your objectives include both running a peer counseling program that stresses abstinence and making condoms available in the schools. You could probably get the local faith community to help out with the peer counseling program, but you're probably wasting your breath if you're trying to get their assistance with the condoms! With each group that you want to involve, focus on the things that your program does that are in line with that group's mission, values, and beliefs.

Make specific proposals and offers.

Before you ask a group to adopt your mission or objectives, you should be prepared to answer the question, "We think your program is great, but what do you want us to do?" When you want groups to adopt your mission and objectives, you should have specific ideas about exactly how they can do so. For example, you can present them with a particular set of costs for a program that they can cover, or a service you'd like their staff to provide. You can set up some sort of exchange--e.g., They provide funds for one of your programs, and in exchange you allow them to use your building for occasional workshops and staff retreats.

Coming up with a proposal before approaching these groups can also eliminate unpleasantness later on down the line. Let them know what you want so that you both know what's expected of you. Spelling out exactly what you hope to gain from them may spare you from hearing things like, "Well, yeah, we said we'd help out with your teen literacy program, but we didn't expect to have to pay any money!"

Example: Proposals made by the Jackson Falls CARE Program

Lauryn Yamamoto, the director of CARE, wants to find other groups to adopt CARE 's mission and objectives. For now, she's focusing on trying to promote this particular objective:

• To have at least 200 parents complete the CARE parenting skills seminar by October 1, 2000.

For this objective, she has decided to make the following proposals to these groups, asking that they each take a specified responsibility in becoming sponsors of the quarterly parenting skills/anger management seminars:

Jackson Falls Parent-Teacher Association

• Lauryn proposes that the PTA pay for all printing and photocopying costs involved in seminar materials, including manuals, flyers, workbooks, and posters.

Jackson Falls Social and Rehabilitative Services office

• Lauryn proposes that the SRS office provide personnel to assist with the seminars.

Interfaith Council of Greater Jackson Falls

• Lauryn proposes that the Interfaith Council provide personnel to assist with the anger management program which is part of the seminars.

Jackson Falls Headstart office

• Lauryn proposes that Headstart host the seminars in their building.

In Summary

When other groups take your mission and objectives to heart, everyone wins. You can gain powerful allies; the groups with which you work can partner with you to meet some of their own objectives (as in the case of the Jackson Falls CARE Program above), and the people you help can only benefit by having additional organizations on their side. Promoting the adoption of your initiative's mission and objectives can be a lot of work, but it can result in new and exciting opportunities for your initiative and the people you serve.

Tool 1: Shared Interest Worksheet

In the column on the left, list any groups or individuals that you're considering approaching to adopt your mission or objectives. In the column on the right, write any ideas you have about interests that you share with those groups or people. Try to word in a way that will appeal to that particular group or individual.

Groups or individuals you're thinking of approaching:	Interest(s) that you share with each group or individual:

 

___You understand what missions and objectives are.

___You understand what it is to promote adoption of your initiative's mission and objectives.

___You understand the reasons for promoting your initiative's mission and objectives.

___You understand that you need to connect with people or groups that are similar to you or your group.

___You understand that you need to try to appeal to broader audiences as well.

___You have decided who you want to adopt your mission and objectives.

___You have cultivated bonds with those persons or groups.

___You have gotten the word out through the media.

___You have shown that your initiative has been tested in practice and has proved to yield positive results.

___You have focused on mutual interests.

___You have avoided issues that aren't pertinent to your shared interests.

___You have made specific proposals and offers.

Institutionalizing a program means making sure that people realize it is needed and necessary to the community's interests, and that steps are taken to make sure the program becomes permanent. One way that a program can be institutionalized is to convince other area agencies, organizations, and coalitions to support it.

What do we mean by attracting support for specific programs?

In this section, we'll talk about ways to attract support--not for your entire agency, but for a specific component of your agency, or for a single activity your agency conducts. There are different forms that this support can take:

• Having someone else run the program: You might be able to get another group to take over a program entirely.

For example, if your literacy coalition starts a writing program in the elementary schools, you might be able to get a child advocacy group or a college preparatory initiative to take over running that program.

• Having someone else provide funding or resources for the program: You may find that while another group might not be willing to take over the nuts and bolts of running the program, they may be willing to give you money, supplies, or personnel time for it.

For example, you might be able to find a local print shop that's willing to do all the printing and photocopying for your writing program. 

• Having someone else house the program: A very simple way for another group or agency to provide support is to give you office or meeting space.

For example, the schools could designate rooms to be used for workshops in the writing program we've been talking about, or a local business could let your program use an office in one of their buildings.

Why try to attract support for specific programs (as opposed to the whole initiative)?

• To make your program permanent. Obviously, if you have a program that you think is worthy and effective, you will probably want to see that program continue. Getting others to help support that program will go a long way toward making it permanent.
• To get support from people who might not normally support your overall initiative. Some potential supporters might be willing to support a specific program even though they might not be willing to support all of your work.

For example, let's say you work with a county-wide AIDS and HIV prevention coalition. You might find that although your local faith community is reluctant to back your coalition because you distribute condoms and conduct safer sex education programs, you still might be able to get their support for a specific program on abstinence.

• To make a limited-time program go on for a longer period of time.

For example, let's say you you've received a grant to conduct a one-year street drug prevention program in your town. The program has been successful and you'd like to see it continue, but the funding can't continue beyond the end of that one year. This would be a good reason to start looking for others to support this program.

• To make you less dependent on any one source of support. If you depend on a single source of support, you run the risk of losing it all if something goes wrong. What if you get all your funding for your youth theater program from a single source, and then that source decides that it should be able to dictate the content of the plays your group performs? Or what if that source decides to stop funding your program at all? Getting support from a variety of sources gives you more autonomy to do the things you want to do and more certainty that you'll always be able to do them.
• To raise support for your organization as a whole. Getting support for a specific program can raise awareness about your overall organization. Being able to show that people support one of the things that you do can get people interested in the other things that you stand for. This can interest other agencies and bodies in adopting your programs and philosophies.

When should you try to attract support for specific programs?

You should try to attract support for specific programs throughout the life of the program--from the initial planning all the way through implementation. Appealing to others for their support, gaining that support early on, then going on to maintain it is far easier than trying to garner support after the fact. Then, once the program is place, you should appeal for even more support in order to institutionalize it

Other times you should try to attract support for specific programs:

• When the program isn't something your group plans to continue doing, but it is something you'd like to see go on.
• When the program was the result of a "one-time" grant and you don't have the resources to continue it.

Using a fictional example, let's look at a situation in which someone working with a community organization could decide to attract support for a specific program.

Example: When to look for support for the Cheyenne Young Parents Program

Sally Sitting-Up works with a social services organization at a Cheyenne reservation in Montana. She started and runs the Cheyenne Young Parents Program, which provides workshops on parenting to teen parents on the reservation. In two months, Sally is moving on to a job at the Bureau of Indian Affairs in Washington, D.C. In addition, unfortunately, budget cutbacks at the social services organization mean that her job--and with it, the Cheyenne Young Parents Program--are going to be phased out. Funding is secure for the next two years because of a grant, but Sally needs to find someone to take over running the program before she leaves or else it will cease to exist.

Whom should you try to attract support from?

• Civic organizations: This includes groups like the chamber of commerce, the county historical society, local preservation groups, community health coalitions, and other types of citizens' groups. These organizations include members from a broad spectrum of the community, and getting the support of any of these groups can help draw further support from other organizations.
• Governmental officials or bodies: Getting the support of your city council, the mayor, the state legislature, or others in the government can go a long way toward making your program permanent, especially in terms of funding. If approaching legislative bodies, it is important to be familiar with any lobbying laws and regulations that might apply to your program. A good guide for this is The Nonprofit Lobbying Guide by Bob Smucker (see the Resources list at the end of this section for more information on this book).
• Other social service or public health agencies: Depending on your program's purpose, you can approach a variety of agencies that deal in service or health issues. These may include the local mental health center, the county health department, your area Planned Parenthood office, and local chapters of national organizations like the American Red Cross or the Muscular Dystrophy Association.
• Key community influentials: These are the movers and shakers of your community--prominent business people, well-known local activists, religious leaders, and so on. These people can have an enormous amount of influence on others, and can be instrumental in helping you gain a broad base of support.
• Foundations and other grant makers: Probably the most important type of support you can hope for is money. Attracting the support of funding agents, especially local ones, is vital.

Example: Potential supporters of the Cheyenne Young Parents Program

Sally came up with the following list of groups that she might be able to enlist to support her program:

• The state chapter of the National Education Association
• The Parent-Teacher Association at the reservation school
• The Child Welfare Association
• The local Social and Rehabilitative Services office
• The reservation medical clinic
• The local Head Start office
• Area substance use programs
• The women's shelter

At this point, you may find it useful to do an informal (or formal, depending on your scope) survey of potential supporters to find out what their reasons for supporting or not supporting your program could be. Often, those who aren't supportive can be broken down into three distinct groups:

• Those who are resistant to supporting you. Depending on the reasons for their resistance, you may or may not be able to win these groups over.

For example, if you work with an AIDS/HIV prevention group and you run a needle exchange program for intravenous drug users, the local drug abuse prevention groups may be resistant to supporting your program.

• Those who are indifferent to your cause. These don't see the benefits of supporting your program, or don't see your work as having anything to do with theirs. You will need to convince them that supporting your program is worthwhile, important, and relevant to their own causes.

For example, if you run a domestic violence prevention program, you might find that the local child welfare agency is unresponsive to your efforts, until you emphasize the correlation between domestic violence and child abuse in your town.

• Those who are under-informed about your cause. These groups just don't know about your program. This might include the general public or groups that might not normally see the connections between their causes and your own. You'll need to educate them through media campaigns, social marketing, word of mouth, or other methods.

How do you attract support for specific programs?

Decide what program you want to attract support for.

This may be something you've already decided on, since you're reading this section. But if your organization has more than one program, perhaps you should spend some time thinking about which one (or which ones) to concentrate on.

Let's continue with the example we've been using so far. Sally Sitting-Up doesn't have to decide which program she wants to attract support for, because she already knows she wants to attract support for the Cheyenne Young Parents Program.

Decide what kind of support you want to look for.

As we discussed earlier in this section, this can mean having someone else run the program, having someone else provide funding or resources for the program, or having someone else house the program. Think about what exactly you want to accomplish and how other groups can help you accomplish it.

Clearly, Sally knows that the type of support she needs to look for is someone to take over running the Cheyenne Young Parents Program.

Decide who is most likely to provide that support.

Try not to waste too much time barking up the wrong tree; if at all possible, limit those you approach to the agencies, organizations, and individuals that you think are most likely to respond positively to your request for support--or at least those that you think you might be able to persuade.

Example: Deciding who is most likely to take over running the Cheyenne Young Parents Program

Sally carefully went over the list of potential supporters she'd come up with in our last example. After thinking the matter through and getting input from other people she worked with, she decided that the reservation medical clinic would be the most likely candidate for taking over her program, for several reasons:

• Sally's social services organization has had a long and productive working relationship with the clinic.
• The medical clinic took over a baby-sitter referral program from Sally's agency a couple of years ago, and that went very well.
• The grant for the parenting program includes some general operating costs that go to the agency running the program, and the clinic has been strapped for cash lately.
• The clinic already serves almost all the teen parents who would be eligible for the program, so it makes sense for the program to go there.

Come up with a written request for the support.

Next, give some thought to how you can best make your program seem like an attractive thing for the potential supporter to take on. As we showed in Promoting Adoption of the Initiative's Mission and Objectives, some brainstorming can help you come up with common goals between your program and the potential supporter. Coming up with a list of common goals can help you make your "pitch," but you will also need to clearly outline what sort of support you need and make sure that what you're asking for is unambiguous.

Put your request in writing. Depending on the extent of the support you're requesting, this may be as simple as a one-page letter, or it could be a detailed proposal. Whatever form it takes, your proposal to the potential supporter will need to outline the following details:

• Exactly what sort of support you're requesting, or at least an invitation to meet and discuss these details
• When you want the support to begin (and, if applicable, end)
• Why the potential supporter should go for it

As with anything you write, be sure to have others look over a draft of your work and give you feedback before coming up with the final version.

Example: Sally's request for support for the Cheyenne Young Parents Program

Because both the agencies and the program involved were small, the director of the clinic was very familiar with Sally and her program, and she had already spoken informally with the director about the possibility of taking over the program, Sally decided to make her proposal in the form of a simple letter:

                                                  Eagle Feather Social Services
                                                  9876 Big Trail Rd., Suite 316
                                                  Anytown, MT 12345

Walter Little Coyote
Director
Pine Ridge Family Clinic
P.O. Box 765
Anytown, MT 12345

February 16, 1999

Dear Walter:

I am writing to you today in reference to the Cheyenne Young Parents Program. As you already know, I will be leaving the Pine Ridge Reservation in April for a new position in Washington, D.C. at the Bureau of Indian Affairs. While I am excited about this new opportunity, I am sad to have to leave my work here in Montana. Perhaps the thing I'm most sad to leave behind is the Cheyenne Young Parents Program.

As you know, Eagle Feather Social Services has been dealing with a lot of budget cuts over the past year. In an effort to stick to the budget, our director has decided that when I leave, there will be a restructuring of staff responsibilities so that my position can be phased out. Unfortunately, in order to do this, it will be no longer possible for Eagle Feather to sponsor some of the projects I have worked on during my time here. One of the programs that will be affected is the Cheyenne Young Parents Program.

I am hoping that you and your staff at the Pine Ridge Family Clinic will consider adopting the program, much as you did the baby-sitter referral program in 1997, so that it can continue serving the many teen parents here at the reservation. The program is fully funded by a grant from a private corporation, so as long as you have a staff member who is willing to devote about 5 to 10 hours a week to it, your expenses for doing so will be covered. It is only because of the staff restructuring here at Eagle Feather that the program is being discontinued.

In addition, the grant includes some general operating costs that go to the agency running the program, which may be helpful to the clinic as a whole. I think that taking over the program would be fairly easy for the clinic to do, since it already works with almost all the teen parents on the reservation who would be eligible for the program.

I know that working with the young parents of our reservation is of great importance to you and everyone else at Pine Ridge Family Clinic, and I can think of no other agency I would trust as fully to take over operation of a program so near to my own heart.

Should the Pine Ridge Family Clinic decide to take over the program, we would need to notify the funding agent as soon as possible. I would gladly take the time to work with whoever takes over running the program to insure that he or she feels ready to start before I leave town. Please take some time to discuss this proposal with your staff and consider this possibility, and feel free to call me should you have any questions whatsoever. I will call you in a few days to discuss your decision.

Sincerely,

Sally Sitting-Up
Cheyenne Young Parents Program

Follow up.

After submitting your proposal, make yourself available for any questions or concerns the potential supporter might have--as Sally did in the previous example. Contact the potential supporter to find out their decision. If they decide to support your program, be ready to spend whatever time and energy it takes to help them begin--this could be as simple as handing over some paperwork or it could be as complicated as performing staff training sessions.

Example: Following up on the Cheyenne Young Parents Program

To Sally's delight, Walter Little Coyote called her the very next day to say that the Pine Ridge Family Clinic would love to take over running the Cheyenne Young Parents Program! Over the next few weeks, Sally had a lot of work to do--getting the grant transferred from her agency to the new one, making sure all the program's supplies and paperwork got moved to the new location, notifying the people the program serves of the change, and training the staff member at the clinic who'd agreed to run the program.

"All the effort was absolutely worth it," she said later. "This program serves an important purpose, and I'm really relieved knowing that it's going to continue doing so after I've left the reservation."

General tips for attracting--and keeping--support:

• Be helpful to others. That way, later on, you can collect on those favors by asking for support.
• Giving public recognition to your supporters is also important. Thank your benefactors publicly.
• Gather and interpret information about the target population, other potential client populations, new service opportunities, and the community as a whole.
• Give supporters lots of feedback about their efforts. This helps them know how they are being most helpful and ways that they can improve.
• Impress them with outcomes. The best motivator for potential supporters is how good your cause is. Show what a good cause your group or organization is, and how effective your program is in helping that cause. This means showing that your program is needed and effective. People who are going to give you resources--funders in particular--want to see results. Strategies include letting supporters see that the people the program serves are pleased with the results, being as involved in high-level decision making (e.g., lobbying, campaigning for sympathetic legislators, participating in hearings where rules affecting your group are being considered, etc.) as possible, and appealing to their particular vested interests by showing them how your program can help them accomplish their own goals.

In Summary

Finding support for a specific program means that you will need to draw upon your skills in networking, communicating, and forging good working relationships with those whose support you want. It's a good way to make sure that a program becomes institutionalized, whether or not your own initiative or organization remains.

Example 1: Sexual Abuse Nurse Examiners Program

Tulsa, Oklahoma

In Tulsa, the Sexual Abuse Nurse Examiners Program, a national program, has been recognized by the Ford Foundation and Kennedy School of Government for its innovation and effectiveness. The program, which brings together police, forensic nurses, and health and legal agencies to provide fast and humane treatment to victims, has worked to treat over 500 sexual assault victims. Victims are examined in a peaceful area of the hospital, warmly decorated in a homelike manner to provide a supportive, welcoming environment. Tulsa police officials have found the program to be effective in improving the quality of forensic evidence, and they've been able to increase the rate of convictions because victims are more willing to undergo the examinations.

We spoke with Kathy Bell, SANE coordinator for Tulsa, about how the program has managed to attract support from the many agencies and offices involved.

CTB: Can you tell me a little bit about how the SANE program got started?

Bell: What was happening here in Tulsa is that rape victims went to any one of the five hospital emergency departments. Law enforcement came out, and then they sat and waited their turn. A lot of rape victims (gave up and) went away. The people that actually did do the exams hadn't been trained in evidence collection. So there were just a lot of frustrating situations for everybody involved--the victim, the advocacy program, law enforcement, and prosecutor's office.

So we developed a task force and started doing some problem identification and problem solving. In the course of that, we found out about some nurse examiner programs that were out there, in places like Memphis, Amarillo, and Minneapolis. We got information from them, and then took the things that made sense for this community. Then we got a group of nurses together--there were thirty that were originally trained--and then developed a training program. The task force had met for about a year, up to a year and a half. And then they started doing exams in July of 1991.

They started with about 15 or 16 nurses that had been trained. One of the main issues that came up early on was a site to do the exams. They had been being done in all of the hospitals. We originally decided that they weren't even going to do the exams in a hospital; they were going to do them outside the hospital at the College of Medicine. But about two weeks before we were going to start, the College of Medicine backed out as a site for the exams for security reasons. They're not a 24 hour facility, and I think they hadn't really thought through that the exams aren't all done Monday through Friday during business hours. It's evenings, nights and weekends, holidays--times when people aren't around. So they were trying to figure out something else because the ER is not an appropriate spot for rape victims. With that, the mayor got involved and pulled together all the powers that be within the different organizations : law enforcement, prosecutor's office, health department, all the hospitals, victims advocacy programs, etc. Various community leaders then just volunteered the things that the program needed to go. the CEO of Hillcrest Medical Center volunteered their building as a site for the exams. So then we got it set up, and they started doing exams on July 1, just like they had originally planned.

CTB: Wow. So it was this task force that you mentioned earlier that really started the ball rolling on getting all of these groups together?

Bell: Yes. And it primarily was led by the police department and the advocacy program. It was a joint push there to develop the task force and get everybody to sit down at the table.

CTB: So how do you keep all of these different pieces involved now that the program is going? What kind of things do you have to do to maintain those relationships ?

Bell: Just mainly open communication with them. You know, we're going to be working hand in hand with each one on a very regular basis. The nurses are in the exam room with law enforcement and with the advocacy program every time we do an exam. We interact with the health department each time that we refer someone to them for STD follow-up. Every time we do an exam we interact with law enforcement. And then the law enforcement, the prosecutor's office, and our examiners interact in the filing of the charges. Ongoing, constant communication is the key. We have regular meetings every other month. We've asked the defense attorneys to come participate in our training and they don't want to do that, but we don't see ourselves as a prosecutor's witness only. That's how the defense sees us. I also have a monthly newsletter that goes out to all of these people plus a lot of other people. There are 65 people on my mailing list that regularly get communication from me. Those are probably the main ways.

CTB: So, aside from the groups that are immediately involved, what other groups or persons do you look at as being really important to keep interested in supporting for the program?

Bell: I would say maybe not necessarily any group, per say, but maybe just the community as a whole. And they're going to do that with educational programs out in the community, whether Call Rape (the local victims' advocacy group) is presenting them, whether the police department is presenting them, whether the nurses are presenting them. We get some media attention with that.

CTB: It sounds like a very effective program, and a perfect example of bringing together people from a bunch of different segments of the community and putting together a really effective program.

Bell: Right. And what makes it work is the respect each group will have for the other groups. We each have our role, and even though the roles may overlap a little bit, we each have our own distinct piece of the pie. For example, I'm not going to step in and do the investigation because that's law enforcement's role. It's my role to provide medical treatment. I'm not going to try the case; the prosecutor's office is going to do that. And so we have to respect the other groups involved and know that they're going to take the ball when it gets to them and they're going to carry it until it moves to the next person.

 

Example 2: Gaining Support for Specific Programs: The Sanitary Towels and Undergarments Program for Disadvantaged Young Women in Kiambu County, Kenya, by Fountain of Hope Youth Initiative

Sarah Mintz, who brought a donation to the program, with James Waruiru, project manager of Fountain of Hope Community Initiative.

 

Background

The Sanitary Towels and Undergarment Program for Disadvantaged Young Women was established, rather inadvertently, by James Waruiru and Grace Mutura, and is now coordinated by Polly Kamau and Penina Muthoni.

One afternoon in 2007 while the team was handing out food donations to needy households, a poor single mother brought her daughter to the center for counseling. The daughter had bled through a rag she utilized as a makeshift sanitary pad. The menstrual blood saturated her dress, showing an embarrassing red stain. This made her peers laugh and ridicule her, which was traumatizing. She vowed never to return to that school with no desire to place herself in an environment where she faced shame and scorn from her classmates, both boys and girls.

Through the Fountain of Hope Youth Initiative (FOHYI), which was founded to respond to the psychosocial needs of families affected by or infected with HIV/AIDS, the team counselled the girl and bought her a single packet of sanitary pads. The following month she turned up again and the team contributed about half a dollar to buy her another packet. On the third month she showed up with five friends, all in the same predicament, suffering in silence. This is how the program was born.

FOHYI needed to gather more information to better understand the issue and respond appropriately. A study was conducted by reviewing published reports from humanitarian agencies and compiled citations that offered brief but concise information on the problem.

Problem Statement

Significant barriers to high-quality menstrual hygiene management (MHM) persist across Kenya and remain a challenge for low-income women and girls. Research shows they face monthly hardships, with 65% unable to afford sanitary pads. Only 50% openly discuss menstruation at home. Just 32% of rural schools have a private place for changing menstrual products, and only 12% of young women and girls are comfortable receiving related information from their mother. More jarring statistics signal that menstruation is tied to fundamental risks and issues of gender inequality, with studies showing two out of three users of pads in rural Kenya receive them from sexual partners and one in four girls do not associate menstruation with pregnancy. (Reference: Menstrual Health in Kenya|Country Landscape Analysis http://menstrualhygieneday.org.)

According to a 2007 UNICEF report, a girl in primary school between grades six and eight (three years) loses approximately 18 weeks out of 108 school weeks due to her menstrual period. A girl in high school (four years) loses 156 learning days, which is equivalent to almost 24 weeks out of 144. Most impoverished women use dirty pieces of rags, cotton or wool, leaves, and paper as improvised menstrual napkins. This unsanitary and degrading practice exposes women to a number of diseases, including bacterial vaginosis and yeast infections. It also brings discomfort and lowers self-esteem.

Current Menstrual Hygiene Management

Menstrual Hygiene has remained a taboo subject, stigmatized even among practical engineering circles that are accustomed to dealing with unmentionables such as excreta. Women and girls make up 50% or more of the users of Water, Sanitation, and Hygiene (WASH) services, which seem to ignore the needs of half the population that menstruate on an average of 3,000 days over their lifetime. These are basic needs regarding water, space for washing, personal cleaning, menstrual materials, and facilities for the proper disposal of used materials.  Women need to be able to manage this biological function with safety and dignity. – Reference: Preparatory Input on MHM for End Group by Archana Patkar, Year 2001

WHO/UNICEF Joint Monitoring Program for Water Supply & Sanitation - http://www.unwater.org/publication_categories/whounicef-joint-monitoring-programme-for-water-supply-sanitation-hygiene-jmp/

Beneficiaries of the sanitary towels program.

 

Why try to attract support for specific programs instead of the whole initiative?

To make a program permanent

By examining how this program was started, we see that a fundamental need drove the FOHYI team to respond. The team was passionate about helping disadvantaged girls stay in school during their menstrual periods, but the organization struggled with raising funds for a program while the number of those in need kept increasing. The anticipated funds from the government and local corporations was not forthcoming, and the risk of closure was inevitable. The team needed to find other means of support for this project to ensure sustainability.

In order to achieve that goal, they sought support from the following groups and organizations:

Women’s Groups

They spoke to women’s church groups and urged members to consider buying just one extra sanitary pad each month to donate to the project. Many found this easy, so the donations started to trickle in. Before long the project was collecting enough supplies to keep a number of girls in school. The project now enjoys the solid support of volunteers who serve in the distribution of supplies while educating girls on hygiene, sexuality, Christian purity, abortion, and career mentorship. These services are free, provided by the women who support the project. It has greatly relieved financial strain, allowing the small funds that are collected to pay off fiscal debts for the program.

School Leaders, Guidance Counselors, and Teachers

School leaders, guidance counselors, and teachers have all helped in the selection of program beneficiaries. Because of a very tight budget, it’s important to ensure that the neediest recipients, who would most likely stay at home during their periods, are the ones first served.

Schools and Churches

During distribution and training, church and school halls were used for meetings. These spaces were donated by the community, equipped with chairs, tables, and projectors, which offered a fitting environment for learning.

Transport by Expat-to-Expat

The significant growth of this program can be attributed to the generous support from Expat-to Expat, a company owned by a Dutch business man based in Nairobi, Kenya. Expat-to-Expat focuses on helping expatriates settle in Nairobi. For years, with its fleet of cars, the company has provided reliable assistance whenever the program needs to transport supplies and volunteers for its activities.

Program volunteer Mrs. Wambui Kigoiyo provides reproductive health and hygiene education.
 

Support from Unlikely Sources

Menstrual Supplies Donated from Post-Menstruating Women.

The program has sparked the interest of older, post-menopausal women who donate to the project as a show of solidarity and support. This has become a morale booster for the team and a competitive challenge for menstruating women in the churches to offer their support to the program.

Former Beneficiaries as Program Ambassadors

To ensure sustainability of the program, former beneficiaries are recruited to become ambassadors after they have completed school or after marriage to return and offer support by either fundraising or volunteering. Currently a number of young women offer assistance during distribution as a show of gratitude to the program. This has greatly lessened the workload of the program team.

 

Making a Limited-Time Program Last Longer

A year after inception, the number of beneficiaries keeps increasing. What started as a one-off helping one girl has given birth to a program commanding attention and sustainability. The impact has been phenomenal. Many teachers attest that academic performance has improved for girls who missed school during their periods, prior to the program. They have noted more engagement in extracurricular activities as well.

Because this program is not dependent on a single source of support, there are increased survival possibilities. Diverse contributors make sustainability a reality. There is also increased local ownership of the project, and every stakeholder feels obligated to keep this program going.

 

Raising Support for the Whole Organization

When FOHYI began this sanitary towels program, the organization had no idea it would grow in terms of impact and popularity, more than any other programs run by the organization. It has won a number of accolades including second place in 2010’s Out of the Box Prize competition run by the Community Tool Box. Proceeds raised through this project have gone a far to ensure sustainability of other programs run by the organization.

As a result of the sanitary towels program, FOHYI has been featured in print and electronic media. The praise and recognition it receives has helped the organization gain much-needed publicity and support mobilization.

 

Conclusion

When designing a project it is advisable to have a wide resource mobilization strategy. A project can be shut down if it depends on a single donor as its source of support. Diverse contributors make sustainability a reality. When you increase local ownership of a project, every stakeholder feels obligated to keep the program going.

 

Contributed by James Waruiru, founder of Fountain of Hope Life Centre, 2016 Community Solutions Program Leader, and Intern with the Community Tool Box.

 

___You understand that attracting support for a specific program can mean having someone else run the program.

___You understand that attracting support for a specific program can mean having someone else provide funding or resources for the program.

___You understand that attracting support for a specific program can mean having someone else house the program.

___You understand that attracting support for a specific program can make your program permanent.

___You understand that attracting support for a specific program can get support from people who might not normally support your overall initiative.

___You understand that attracting support for a specific program can make a limited -time program go on for a longer period of time.

___You understand that attracting support for a specific program can make you less dependent on any one source of support.

___You understand that attracting support for a specific program can raise support for your organization as a whole.

___You understand that you should try to attract support for specific programs throughout the life of the program.

___You understand that you can also try to attract support for a specific program when the program isn't something your group plans to continue doing, but it is something you'd like to see go on.

___You understand that you can also try to attract support for a specific program when the program was the result of a "one-time" grant and you don't have the resources to continue it.

___You understand that you should try to attract support for specific programs from civic organizations, governmental officials or bodies, other social service or public health agencies, key community influentials, and foundations and other grant-makers.

___You understand that t hose who aren't supportive can be broken down into three distinct groups: those who are resistant to supporting you, those who are indifferent to your cause, or those who are under-informed about your cause.

___You have decided what program you want to attract support for.

___You have decided what kind of support you want to look for.

___You have decided who is most likely to provide that support.

___You have come up with a written request for the support that includes exactly what sort of support you're requesting, or at least an invitation to meet and discuss these details, when you want the support to begin, and why the potential supporter should go for it.

___You have followed up by making yourself available for any questions or concerns the potential supporter might have, contacting the potential supporter to find out their decision, and being ready to help them begin.

___You understand the general tips for attracting and keeping support.

Marketing is not a word that comes easily to the lips of community health and development professionals. When we do think about it, we tend to do so in a negative way. The expression "smoke and mirrors" comes to mind; we think of corporations spending huge amounts of money to convince people to buy something that they don't really need.

What is marketing?

Although it's true that marketing can be done for items and ideas of questionable worth, it is not in and of itself a bad thing. In fact, marketing can be a powerful tool to help your organization succeed in its quest for financial sustainability. This section will tell you how.

But what exactly is marketing? One of the best definitions of marketing for nonprofit organizations that we have seen comes from the Amherst H. Wilder Foundation. In their words:

"Marketing is a process that helps you exchange something of value for something you need."

In any community, these exchanges occur all the time. For example, an adult literacy program offers education and skills training, which will lead to a more capable work force for employers in the community. In return, the organization that runs the program needs clients, referrals, and resources to allow the program to continue.

Or, take the example of a neighborhood revitalization coalition. Members might want businesses to move to the area to provide jobs and improve the economy of the area. In exchange, they might offer a semi-skilled work force and tax breaks.

Marketing can be done in many ways, and it includes different things. That's because the idea of marketing asks you to look at everything you do, and to do some of it differently. When the receptionist at your office picks up the phone, you probably don't think of that as part of marketing, but it really is. How he greets the caller says a lot about your organization: what you do, how professional or casual you are, and so on. And that's true of the follow-up to that phone call--who the caller talks to next, or the information he receives in the mail, or the visit he makes to the agency. Image may not be everything, but it probably counts for more than we would like to admit.

When you think about marketing, then you're really thinking about all of the following:

• Image-building
• Friend-raising
• Membership development
• Community relations
• Political activities
• Citizen education

--You're not just asking for money.

In this section, we will assume that the bottom line for your marketing plan is obtaining resources: either money or in-kind support. And because of that, we will discuss how to market your organization, not the problem or issue your organization is working to change. That is, if your group is working for honesty in government, we will discuss how to convince people that your group should take on the issue. We will only discuss the importance of honesty in government to the extent that people must believe it is important if they are going to support your organization.

Changing people's ideas and behavior about issues, such as honesty in government, or drunk driving, or maintaining a healthy lifestyle, are known as social marketing.

Does all of this make sense to you? Then let's move on.

Why should you market your initiative for financial support?

As we suggested above, you do some marketing anyway in the way your organization presents itself every day. By focusing your energies and making a concerted effort to do it better, you can:

• Obtain more resources to survive and thrive. If your organization is known as an effective group that works hard and gets important things done, people will want to jump on the bandwagon. Marketing lets the right people know about your successes, and also how and why they can add to them.
• Gain valuable insights on your community. As part of a marketing plan, you will be asking people what they think. This will give you a better understanding of why some people don't give to your organization at all, why others do support your group, and how you can convince both groups to donate more.
• Better focus your current resources. With the knowledge you gain through marketing, you will have an improved understanding of the best ways to use resources your organization already has to reach your goals.

How do you market your initiative?

In its simplest form, marketing your initiative for financial support means doing three things:

• Letting everyone in your community know your group exists and what it does.
• Making everyone in the community like your group.
• Convincing people to support your group.

Doing those three things, however, can get a bit tricky. To meet the challenges of marketing your organization, you should develop and follow a marketing plan.

Below, we outline twelve points that are important parts of marketing your organization. In brief, they are:

• Decide who will be primarily involved in the development of your marketing plan.
• Involve everyone in your plans.
• Define, revise, or affirm the organization's role.
• Set goals for your marketing plan.
• Determine how far you are from your goals.
• Brainstorm possible sources of support.
• Consider the donors' points of view.
• Decide which possibilities to focus on.
• Develop contacts.
• Develop a plan.
• Pretest and implement your plan.
• Evaluate and revise what you are doing.

Let's look at these one by one.

• Decide who will be primarily involved in the development of your marketing plan.This should be a core group who has the time and energy to work on the plan. In some cases, it might be your financial sustainability committee in others, it might be a combination of staff, board members, and volunteers. If there are members of your organization who work in the fields of advertising or marketing, be sure to take advantage of their expertise!
• Involve everyone in your plans. This doesn't mean that everyone should be helping draft the marketing plan, but everyone in the organization should know what you are doing and why. People can't support what they don't understand.
• Define, revise, or affirm the organization's role. Before you can market your group, you need to decide exactly what you are going to market. That is, members of your organization should answer the questions:
  • How do you want people in the community to perceive the organization?
  • When people hear your name, how should they finish the phrase "Oh, that's the group that..."

Your organization's role should be clearly understood and agreed upon by all of the members of the group, including your board of directors. If members of the organization define it differently, the community at large will end up with a view of your organization that is confused at best. Almost certainly, they won't see your organization the way you might wish.

One way to help do this is to develop a paragraph that explains your organization and what you do. It should include your mission statement and one or two other points you want people to remember about your group.

For example: Founded in 1991 and the recipient of numerous awards, the Rockville Melting Pot was born on the belief that conversation over good food can greatly assist in enhancing understanding and tolerance among Rockville's many ethnic groups. The group meets monthly for potluck dinners, to which people bring traditional dishes. Each dinner features a speaker discussing topics of cultural and community interest. Additionally, the group offers newly arrived immigrants support and aid in obtaining necessary resources.

Simply writing a paragraph like the one above, however, is not enough. Your organization has to make sure it is read by community members.

You might use it:

• On the back of your organization's brochures
• In your organization's newsletter (for example, along with the credits)
• As part of a media packet to send with press releases

Deciding who you aren't

An important part of defining an organization's role is deciding what you don't want. Opportunities may arise that would mean a change in the focus of what you do. What do you do about them?

For example, perhaps your organization is dedicated to reducing child abuse and neglect, and a large grant for improving the nutrition of young children becomes available. Neglected children are often malnourished, so there is some overlap, but the terms of the grant would require you to go farther afield, and broaden your scope significantly. Is the money you would bring in worth the time that would be taken away from your primary mission?

Like many choices your group probably makes, there's no easy answer for the above dilemma. While each case will be determined individually, you should think about this idea generally from the start, and it should be clear in the paragraph you have developed. For example, if you want to be open to that grant or similar opportunities, you might prefer to market yourself as a children's advocacy group, instead of as a group only interested in child abuse and neglect. (You could still note in the explanatory paragraph, though, that you work extensively in those areas.)

If you make these general decisions early, friends and colleagues will have a better idea when to suggest new opportunities. Who you are will be clear in their minds

Set goals for your marketing plan.

What, exactly, do you want to accomplish with your marketing? What is the ideal situation for your organization? Dream big.

Think about two different kinds of goals: general marketing goals and specific monetary goals.

General marketing goals discuss how you want people to see your organization. For example:

• The Difranco Literacy Project is committed to being known as the most comprehensive adult education center in the region.
• Teen House offers a safe place for all area youth to come for help with all kinds of troubles.

Here are some examples of financial goals:

• An operating budget of $500,000 a year.
• An endowment that covers 8% of your operating costs.
• Certain programs are paid for or run in perpetuity by local organizations.

When developing your marketing plan, you should keep in mind both types of goals. A natural tendency is to want to focus on the money--after all, that's why you are developing this plan. Remember, though: it's much easier to sell something when its worth is obvious. There's a tendency to say, "We're trying to do good. You should help us!" But donors want to know that their donation is being used well, and that the money or services they have given is really having an impact. If you effectively market your organization, potential donors are likely to have heard things they like and to open their checkbook.

As we said above, it's important to dream big when you develop your goals. However, those dreams can be a little daunting for a group just starting out. For example, if your long-term goal is "An operating budget of $500,000 a year" and you don't have a dime in your pocket, it's hard to see how you'll get there from here.

That's where shorter-term goals come in. These help you achieve your larger goals by breaking them down into doable pieces. They also allow you to gain the experience and confidence to accomplish your objectives.

Here are two examples of short-term financial goals:

• A 10% increase in donations by the end of the year.
• Two of your programs being picked up by local agencies on a trial basis

And examples of short term general marketing goals:

• Students in all of the area high schools will know what Teen House is and where we are located by the end of this school year.
• Spring enrollment at the Difranco Literacy Project will be twice what it was last year.

In both cases, your goals should:

• Be formed around an understanding of who you are as an organization.
• Be very clear about what you want to accomplish.
• Take into account what you think your strengths, weaknesses, opportunities, and threats will be in the next few years.

Determine how far you are from your goals. This is sometimes known as doing a "marketing audit." Simply put, before you go after your goals, it's important to know how much work you have to do. If, as in the example above, you want to be known as the most comprehensive adult education center in the region, how many people in the area already see you as such? How many people in the area haven't even heard of your organization?

Brainstorm possible sources of support. Your general marketing plan may target the entire community, but you probably don't expect to receive support from everyone. Some people (or groups of people) are much more likely to support your effort than others. So your next step is to sit down and write a list of potential markets, or types of donors, and ways to gather support.

Some of the most common categories include:

• Government agencies
• Members (through fees and dues)
• United Ways
• Foundations
• Individuals
• Corporations and businesses
• Users--for example, these people may pay a fee for a class
• Are there others you can think of?

Consider the donor's point of view. The next step is to write down what you think members of each group want from you in return for their donation. In his book Mission-Based Marketing, author Peter Brinckerhoff offers some suggestions of what these markets generally want from an organization in return for their donation. The best way to find out what people want, however, is to ask them. Every organization, like every individual, will have desires and dislikes of their own. And, since what people want will change, you should ask often (or at least occasionally!) to make sure they still want the same things. If you have the opportunity, you should learn what these potential markets want by asking them formally.

Some of the questions you might ask include:

• What do you want from our organization?
• What is your opinion of our group? How do you perceive us?
• Why do you donate to our organization/use our services? Or:
• Why don't you donate to our organization/use our services?
• What groups do you give to? Why do you donate to them?
• What would convince you to donate (or to give more) to our organization?

How do you ask these questions? Some of the most typical ways to find out what people want, include:

• Focus groups.
• Surveys and questionnaires.
• Telephone polls.
• Informal queries.

The first three of these might be best when dealing with individuals, such as members or users (it's unlikely that you will be able to get representatives of 20 foundations together for a focus group), but every situation is unique. Be creative, and find the options that will work best for your organization and in your community.

Decide which possibilities to focus on. It's unlikely that you will be able to target all of the different funding sources in your community, or at least to do it well. After careful deliberation of your own desires and capabilities as well as those of potential funders, decide which ones you want to spend the lion's share of your energy on.

Develop and nourish contacts with potential funding sources. Knowing people inside of funding sources is very important when dealing with organizations such as foundations and government agencies. Community activist Ray Shonholtz says, "[F]oundations fund people first and ideas second. The foundation wants to know that the person they're funding isn't a kook. Regardless of what the idea is, they want to know that the person has a reasonable chance of delivering it, or at least making a reasonable effort to attempt to deliver it, especially if it's a very risky idea. So credibility becomes the first and primary issue for most sophisticated foundations."

Develop a plan. Your marketing plan should be complete with a timeline for activities, who will do what, a budget, and baseline markers, so you will be better able to evaluate what you have done. 

Along with all of the basic elements of planning (such as including the "who will do what by when") your plan should also incorporate each of the"4Ps" of marketing: product, price, place, and promotion.

Product--The product is what you are marketing.

Here, you are marketing your organization (or one or more of its programs) and its ability to give potential donors or client what they want. This could be a healthier community, a thriving arts program, or after school programs for kids. An important first part of your marketing plan, then, is to make sure your program is in top shape for when people come to check it out. In other words, continue doing what you do, and look for ways to do it better. When people do find their way to your door (and we'll talk about how they can do that in a few moments) they need to find something worth support waiting for them.

There are many ways to do this, of course--the Tool Box contains many different ways to make your organization more effective. One thing worth noting here, however, is the importance of making a good first impression. Staff and volunteer training is an important part of this.

Remember, the first people that clients or donors meet are often the people who are paid the least, or who feel the least "ownership" for the organization. How can you make sure they give the impression of your agency that you would like to project?

Exercise: Think for a moment about the following questions:

• If a millionaire walked through your front door right now because he was thinking about making a large donation to your group, what would he see? What would be his first impression?
• Look at your organization with fresh eyes. Would you give a donation to such a place? Why or why not?
• Think about places or organizations to which you have given money. Why do you donate money to those groups, and not organizations working for other causes you believe in? What makes you give away money?
• What really bothers you when other organizations try to raise money?

Price--The price is how much it will cost a person to stop (or take on) a certain behavior. An important step in marketing is trying to reduce that price. But wait, you say, you're trying to earn money, not reduce the cost to donors. Very true. But by price, here, we're talking about three things monetary value, nonmaterial costs, and perceived value.

First, of course, is monetary value. But for some people, donations are more expensive than for others. A large foundation may be able to give a $100,000 grant without blinking--but the cost of doing so would certainly be too high for most people in your community. An important point, then, is finding the easiest way for people to make donations that aren't too expensive for them personally.

For example, a local executive may allow you to use an empty office suite for free or at a reduced cost, and a housewares store might donate paint and fixtures to renovate that office. But if you had asked either donor for the amount of money it would have cost to rent the space or have it decorated, the price in dollars might have been too expensive for them. Likewise, you might just get that high-dollar foundation grant, but could find the program officers unwilling to offer their services as volunteers.

The lesson here? Find out what people have and what they can give you without much sacrifice. Then, make it easy for them to do so. Always send out donor cards with self addressed, stamped envelopes and feasible amounts written as suggestions. Offer to pick up the paint yourself, instead of asking the store manager to drop it by. Finally, do not overlook the highly profitable area of in-kind support.

Second, when we talk about price, we are also talking about non material costs-- the emotional, political, and moral gains and losses of supporting your organization.

For example, if your organization is trying to reduce teen pregnancy, one of the activities might be to distribute free condoms to teenagers. For community members who are against the use of condoms, the price of donating to your organization might be very high in a moral sense. It might be politically costly if your donor is a corporation or a well-known figure that has constituents who are against the use of condoms. This isn't to say your organization should change its ways, or not do something it believes important. However, always be aware of the consequences.

Also, look for alternatives that are less expensive for donors. For example, you might suggest donors contribute exclusively to an abstinence-based program run by your organization.

Third, we are talking about the perceived value of supporting your organization. This ties in with the first two ideas. Potential donors become real donors when they feel they will get more than they will give out of the arrangement.

For-profit companies understand the concept of perceived value very well. Consumers might spend hundreds of dollars on a pair of tennis shoes because they are seen as being "cool." Nonprofit organizations need to learn from this example. The perceived value of supporting your organization will include the good the donation can do, how it will make donors feel, the recognition they will get in the community, and so on.

Place--The place, in terms of marketing for financial sustainability, discusses how accessible, or easy, it is for people or groups to support your organization. For members and users, this can be a physical place: where and when do classes /activities take place? Are they a few blocks away, or across town? Are they easy to get to, or do they require a long subway trip?

However, place also includes the ease of donating to your organization. Do people know how to donate to your organization? Is it easy for them to do so? Are their donations tax-exempt?

For example: A small public radio station recently held its annual fundraising drive. People were encouraged to contribute whatever they could, no matter how small. The donations could be called in for any amount, and that amount could be paid in up to 12 installments over the period of one year. Corporations called in and agreed to put up matching funds for all donations called in during a certain time period, thus increasing the perceived (and real!) value of people's donations. The result? The radio station made the goal they had set for themselves in record time.

Place also includes things like how the issue affects potential donors. For everyone from whom you ask for a donation, you should be able to answer the question, "How does your issue affect me, personally?" or, "How will your group's work make my life better?" For example, if you are trying to reduce youth violence, how is it important to them? Is their neighborhood violent? Are their children's schools safe? Does the problem affect the entire community? Why is it important to them?

Promotion--Promotion is the last of the "4 Ps," and the one most easily associated with marketing. If people haven't heard of you, they can't support your work. So the last part of your marketing plan should be to advertise, advertise, advertise! This advertising can be almost anything: television commercials, chatting with community leaders at meetings, developing brochures, letters soliciting donations, or red ribbons tied to car antennas.

Whatever you decide, however, your promotional planning should occur in two phases. First, advertise to promote interest in your organization. Then, develop promotional items such as letters, brochures and ads specifically to ask for money. You need to do the first to do the second effectively. You don't want the first time people hear of you to be the day you are knocking on the door asking for help.

General promotion

General promotion of your organization should occur on an ongoing basis. Here are some common ways to promote your organization:

• Make speeches to civic clubs and leave brochures on the tables.
• Develop a newsletter.
• Hold "open house" days.
• Give tours of your organization.
• Offer incentives. For example, you might offer classes at a 'two for one' price to help bring in new members.
• Design posters.
• Develop brochures.
• Keep the press informed about your organization, an event you hold, or ask a sympathetic member of the press to do a feature about one of your members.
• Hold a booth at public events (local fairs, craft shows, etc.)
• Hold community forums that give people a chance to voice their opinions on the topic that concerns you.
• Sponsor a well-known speaker on the subject.
• Network--the more people you know, the more possibilities will open up before you.

Promoting to win support

The second type of promotions are those asking for support. While these are very important, they are done less often than general promotion, which should occur all the time.

Some of the ways of obtaining support include:

•  Direct mailings
• Telemarketing
• Fundraising events
• Direct solicitation of corporations known to be friendly to your cause
• Applying for grant money
• Soliciting individual donations

These different methods of getting support each have advantages and disadvantages. 

Pre-test and implement your plan. After you have developed your detailed marketing plan, try it out on a small scale basis, to work the bugs out. Then, modify your plan based on what you've learned.

Evaluate and revise. After your plan has been in effect for a certain amount of time, stand back and take a look at how it's working. What should you keep? What can be done better? Part J of the Tool Box, Evaluating the Initiative, has a lot of good information that can help you when you get to this point.

In Summary

Despite all of its negative connotations, marketing doesn't have to be a dirty word. In fact, it can be used honestly and well as a very powerful tool to help your organization or group succeed. The successful use of marketing can help your organization live a long, successful life in the community. After all, you have built something to be proud of with your group or coalition--don't you want to let others be a part of it?

Tool #1: What your donors want from you

What follows is a list of desires that are typical of many groups of donors, such as government agencies, foundations, and individual donors. By knowing what members want, you will be able to target your marketing to their desires.

All of these suggestions should be taken as a starting point. Just as different nonprofit organizations want very different things, different donors will have their individual desires as well. It's your job to figure out what they are, and how your organization can best fulfill them.

Government agencies (federal, state, city, or county) want:

• A carefully defined set of services, provided by a carefully defined set of people , in a set period, often in a set manner, with no audit exceptions and with all paperwork in on time.
• Generally, government representatives want you to know regulations cold.
• You should meet all of their regulatory and bureaucratic requirements.
• You might also design materials (such as reports or brochures) targeted specifically toward government donors. They should emphasize outcomes, quality, and certification levels.

Members want:

• Clear, tangible benefits that they actually receive.
• Updates on what the organization is doing.

Foundations want:

• Innovative projects that meet their criteria.
• A demonstration of strong community support
• Self-sustainability within approximately three years.
• Usually, they want general information, such as your mission, history and goals.
• Letters of endorsement from community leaders or collaborators can be helpful

We should note here that foundations are a slightly different case than other potential donors. Many times, they are located across the country, and each may be unique in its desires and goals. Talk to program officers of foundations if you can, and ask what they like to see most and least in applications. Read the foundation press and consider getting help from an experienced, successful grant writer.

United Ways are an excellent source of funding for many small community organizations. They want:

•  Guidelines for funding met precisely.

If your United Way does needs assessments, make sure that you participate so that your service area needs are included.

Donors, both individual and corporate, have wants that vary widely. Some want:

• To support a program.
• To support an endowment.
• Some want to be visibly thanked for your contribution; many others don't. Ask.

Organizations should learn who is most likely to donate, and focus energies on these potential donors.

Users who pay fees want;

•  High quality and value for their money. Note that we say value, not low prices. Many people who pay fees won't balk at a high price tag if they feel they are getting a lot out of it. For example, a group of tourist may willingly pay ten or twenty dollars to tour a historical site if they have heard that it is particularly beautiful, or that the guide is exceptionally charming.

While this list gives many of the more common ways for a nonprofit organization to raise money, it isn't meant to be a complete list. Does your group have other potential means of funding? What are they?

Information from Peter Brinckerhoff's Mission-based marketing. Reprinted by permission.

Tool #2: Fundraising Effectiveness Chart

Ways/places for asking for support	Definition	Effectiveness tips	Prospect ratio	Cost per dollar raised
Direct Mail	Money raised through the mail by sending a solicitation package to a broad base of potential supporters.	Most effective way to achieve these NEW donors: Repeated solicitations	100:1	$.80-$1.25
Telemarking	Money raised through the telephone by calling with a solicitation script to a broad base of potential supporters.	Most effective way to achieve these NEW donors:Repeated solicitations	10:1	$ .10-$ .20
Fundrasing Event	Money raised from individuals who are new to the universe of your organization or upgrading to a higher level through the sale of tickets and other event collateral	Most effective way to achieve these donors: Multiple solicitation tactics	Direct mail sales 100:1; Face to face sales 4:1	$.50
Corporate Sponsorship	Money raised from corporations who support the work of your organization and/or are seeking recognition opportunities	Most effective way to achieve these donors: Face to face solicitations	4:1	Widely variable; approxi-mately  $ .10-$ .
Grants	Money raised from private and public foundations and/or various branches of the government	Most common way to achieve this money: Grant applications	11:1	For program grants $1; For operating grants <$.15
Individual Donors	Money raised from individuals who support the work of your organization at a philanthropic level	Most effective way to achieve these donors: Face to face solicitation	4:1	<$ .10

 

___You want to secure financial support through marketing your initiative

___You know what marketing is

___You know what marketing includes

___You know why you should market your initiative for financial support

___You know how to market your initiative

___You are familiar with the 12 points in marketing your organization

___You know the "4Ps" of marketing

A community health clinic offers free counseling space to a domestic violence prevention program. A job training program offers services to participants in a community development agency in return for time for its participants with the other agency's housing counselor.A child protection agency lets a grassroots anti-child abuse initiative use its copier.

Sharing resources often makes it possible for organizations to provide services or fill needs it couldn't manage on its own. Just as organizations and initiatives take different forms, there are many different ways to share positions and resources. The basic goals of sharing, however, are almost always the same: to help the sharers gain access to positions, services, or goods that they couldn't afford on their own, to increase their capacities to fulfill their missions, and to advance their organizational goals. Cooperating or collaborating in this way can expand an organization's viewpoint and teach its staff new skills. But there are barriers to sharing positions and resources as well; and unless those barriers are recognized and overcome, sharing resources can turn out to be difficult, if not disastrous, for everyone involved.

How do you know whether you want to enter into a sharing arrangement with one or more other organizations? What might such an arrangement look like? How can you make an arrangement that benefits everyone involved? In this section, we'll discuss...

• Why you might want to enter into a sharing arrangement.
• When it makes sense to try to create a shared position or other resource.
• The different shapes an arrangement of this sort might take, and what kinds of resources can be shared.
• How to create and manage a shared position or other resource.
• Barriers to the success of sharing arrangements, and how to overcome them

Why share positions or other resources?

There are a number of reasons for creating a shared position or other resource. While money is by far the most common and compelling, organizations may also desire to create better services or a stronger initiative, or may want to support other organizations for philosophical reasons. Merging the talents and purposes of two or more organizations through coordination, cooperation or collaboration, may lead to financial viability, better services, or positive changes in the community.

Money: Grassroots or community based organizations and initiatives are often underfunded at best, and sometimes downright strapped. They might need a position or service, want to provide a needed service to participants, or lack organizational essentials (clerical support, a copier, a phone system, even office supplies). Banding together is one way to meet those needs cheaply. One organization may be eligible for a grant that can be shared with another doing similar or related work. Organizations may be able to barter services, or to offer services to one another extremely cheaply. Whatever the arrangement, each partner gets something it finds valuable, and one or both is usually enabled to do or get something it couldn't otherwise afford.

Although money is certainly an important factor in the operation of grassroots and other non-profit organizations, be careful not to make it the most important factor. The question to keep asking is "How does this further the mission of the organization?" Often, an organization may apply for shared grants or jump at offers of shared positions without thinking carefully about how the particular funding or position fits into the philosophy and purpose of the organization. If a partnership doesn't mesh with what the organization is already doing or wants to do, it is likely to cause more trouble than any financial gain is worth.

Creating better services or a stronger initiative: Sometimes, an organization's larger vision can move it to participate in a sharing arrangement that may not benefit it financially. For example, several groups concerned with public health may coordinate their publicity campaigns, advocate for one another's issues, and provide volunteers to work on one another's initiatives. While their efforts may not have an immediate impact on any one group's finances, by sharing resources, they may call more attention to public health issues than any one of them could by itself.

Shared philosophy: An organization or initiative which supports particular social or political goals may want to share resources with other groups that feel similarly, in order to create more community support for those goals. By pooling resources, these groups may be able to have a larger voice in the community than if each spoke only for itself, and thus influence the thinking of the public in a more powerful way.

When should an organization consider a sharing arrangement?

Timing is important in almost everything an organization does, and sharing resources is no exception. The timing of a sharing arrangement often depends on external factors, but may also be driven by the immediate internal needs of the organization. Times when considering a shared position or other resource might be reasonable include...

• When money or something else is available, especially when whatever is available specifically fits something you hoped to do anyway. Perhaps another organization or group knows of a grant it wants to apply for jointly, or has money it wants to spend on a service your organization wants to provide, or has space available to share in a community you want to serve. Some grants require collaboration; sometimes your organization or another only has the capacity or the desire to do part of what a grant calls for. If the arrangement makes sense, the time may be telling you something.

An adult literacy provider and an area sheltering organization had been struggling to find ways to get adult education services to shelter residents and the homeless population in general. When money became available for adult literacy for the homeless, the two wrote a successful proposal to deliver services to residents of the shelters. The collaboration lasted for three years, provided much-needed staff time and services for both organizations, and forged a connection that persisted long after the grant was gone. One result of the shared program was that one of the shelter residents eventually became a staff member of the literacy provider.

• When there's an emergency or a deadline to deal with. If your new landlord has decided that your space will make a great condo, and your lease is up in two weeks, sharing space may look like a good idea. If funding for an important position has just been cut, you may want to try to keep the service going by negotiating a sharing arrangement with other organizations. If your copier has just died, and you have a big public event coming up, you might be grateful for the use of someone's equipment. Sharing is one way to cope with potential disaster.
• When there's a particular need in the community that you and other organizations want to address. A sudden spike in AIDS deaths could be the spur for several organizations to band together to get information out as quickly as possible, through a shared community health educator or a street worker. An economic downturn might dramatize the fact that many individuals in several organizations' target populations lack the basic skills to get and keep a job, and might lead to a joint effort to provide adult education. What one organization can't do alone, several might be able to do easily.
• When it seems that sharing resources is simply a good idea whose time has come, and a group comes together to explore the possibilities. A group of organizations in rural area of Massachusetts--including a battered women's shelter, a pregnant and parenting teens program, a community action agency, family planning, a community theater, an adult literacy provider, and an elder service agency--began meeting specifically to look for joint projects that would better serve the area and bring in needed cash for the agencies. Several collaborations grew out of these meetings, and, in addition, most of the organizations began working more closely with one another in other areas

Different types of sharing arrangements

Sharing can take a number of different forms... Each has its own advantages and drawbacks, and comes with its own set of ground rules.

Donations:

An organization--or a business, a town office, a church or synagogue, even a landlord -- might donate staff time, services, space, or equipment to you because it believes in what you're doing, wants to see what you do available to the community, or simply wants to perform a community service. Sometimes there are tax advantages to the donor. These donations generally fall under the heading of "In-Kind Support," and often involve a larger organization flat-out giving some non-money resource to a smaller non-profit organization: businesses may provide Board members; organizations may allow others free use of copiers, computers, and faxes, or donate furniture.

Bartering:

Two or more organizations may agree to trade resources. In return for a certain number of hours a week from your counselor, for instance, another organization could provide you with space, or a computer, or the services of one of its staff. It's a barter situation; no money is involved.

Problems can arise with this kind of arrangement when one organization feels it's being shortchanged, or that what it's getting isn't what it wants, or that it no longer needs the exchange. The other organization may then be left without something it's come to depend on.

Sharing of costs:

Two or more organizations might simply share equally the costs of renting space, hiring a staff person in a position they all need (a bookkeeper, for example), buying a piece of equipment, etc. The advantage here is that each party has to pay for only what it needs (e.g. 1/3 of a bookkeeper's time), thus reducing costs for everyone.

Under these circumstances, each would have equal rights to the resource, and there would need to be a very clear understanding about how it is divided. If someone feels they're not getting as much out of the arrangement as the other(s), the whole thing can fall apart.

Joint grants:

Two or more organizations apply for a grant to cooperate or collaborate in the delivery of a particular set of services to a particular population. Although very common, this can be the most complicated type of arrangement, because there are at least three different possibilities, depending upon the grant requirements and how the proposal is written:

• The partners may spell out who does what, and simply share the money as specified.
• One partner may be the "lead agency"--the one actually funded, and to whom the checks are issued, and may hire the other(s) to provide specific services under the grant. In this case, those providing the service get paid for work performed (as if they worked for the first organization itself), and the service is very specifically and narrowly defined.
• One partner may be the lead agency, and may contract with the other(s) for specific services. A contractor gets a lump sum to perform services, and is responsible for how the services are delivered and how it spends the money.

The potential benefits here can be great, but the potential pitfalls are also huge, bigger than Florida sinkholes. The bottom line is that all partners are responsible both to one another and to the funder for using the money exactly as they said they would. If someone doesn't do the job, everyone involved could be hurt. Writing and managing a joint grant is discussed in more detail in the Appendix.

Different types of resources that can be shared

Whatever the resource, there's probably a way to share it to the mutual benefit of all the organizations involved.

People.

Staff might:

• Be employed by one organization, but their services might be accessible through other organizations to a broad range of the target population. A day care provider, for instance, might apply for funding to hire a teacher specifically to provide child-care services for other organizations' participants while they attend their programs (job training, adult literacy, counseling, etc.) A counselor may be paid by a family planning agency to run support groups for pregnant and parenting teens from a high school in-school program, a public health clinic, and a welfare office. Volunteers for one organization might make phone calls or recruit participants for another.
• Provide services to, and be employed by, two or more organizations. A street outreach worker might be paid by both a program for homeless teens and a substance use clinic to work with both populations, among whom there is often a good deal of overlap. Two or more organizations may pool their resources to hire full- or part-time clerical or bookkeeping support, computer help and technical assistance, counseling services, or medical care, which will then be shared among all. Several organizations may jointly hire a grantwriter, either to research and generate collaborative projects, or to work independently for each organization.
• Provide services to participants of another organization in return for services provided by that organization to participants of theirs. A job counselor might help adult literacy students conduct job searches in return for literacy instruction for employment training participants. You can probably imagine any number of other exchanges like this: family planning and mental health counseling, public health and homeless services, etc.
• Share training and professional development opportunities with staff from other organizations.

In any sharing arrangement involving people, make sure that the individuals who will actually be involved understand beforehand what the sharing entails, and how it will affect them and their jobs. They should have a hand in designing the shape of the concept, and they should be comfortable that the arrangement being proposed is actually workable for them, rather than saddling them with a job and a half. If they don't buy into the arrangement for whatever reason--they don't like the people in the partner organization, they don't want to do what the partnership will demand of them, etc.--the chances are that your arrangement is doomed before it starts. They need to be involved from the beginning, and their concerns need to be heard and addressed.

Space.

Organizations share space for economic reasons, of course, but beyond that are shared goals and philosophies, shared target populations, and the chance to share programs.

Some shared-space arrangements are just that: two or more groups use all of the same space at the same time, a difficult arrangement if the use of space is for direct service. A variation on this is one in which two or more organizations use the same space, but at different times. Yet a third shared-space possibility is that of dividing the space, not necessarily equally, among two or more organizations, which may or may not use the space at the same time. Any of these arrangements might be a joint rental, a sublet, or a donation on the part of the original renter or owner.

A literacy program rented--at a low rate--an office at one of its sites to a battered women's sheltering and advocacy group. Not only was there constant cross -referral, but each program had a profound effect on participants in the other. Many, particularly male, literacy students became far more sensitized to the issue of domestic violence; and many of the battered women realized the value of education, for both their independence and their self-esteem. In addition, the battered women's counselor became a full member of the community formed by the literacy program staff and students, taking part in program events and activities, and serving on a staff-student site management committee. The arrangement cemented an already good relationship between the two organizations, and made it easier for them to work together in creative ways.

The ultimate shared-space arrangement is one in which two or more groups jointly buy a building to house themselves, and perhaps several others as well, under one roof. The advantages of this situation include locking in rent (i.e. mortgage payments) for as long as twenty years; generating income (perhaps enough for mortgage and upkeep) from renting out the unused part of the building; and creating a center for organizations with similar goals serving similar populations.

Equipment.

Equipment may include office paraphernalia such as copiers, faxes, phone systems, computers, etc., as well as other equipment needed for specific types of organizations. Sharing arrangements could take place among those sharing space as well, or could mean one organization's staff coming to another site to use equipment there. Common ways to share equipment are joint purchase (which can mean everyone pays an equal amount, or that everyone pays a proportion geared to how much they expect to use the equipment), or one organization paying another a fee or offering services in exchange for use of equipment.

Other things that can be shared

 Include mailing lists, conference facilities, referral networks, resource libraries, newsletters, information (grant availability, for example), computer listservs, and supplies (for instance, joint buying for cheaper rates.)

How to create and manage a shared position or other resource

We've seen several different ways to share resources, most of them involving resources that already exist in one way or another. So how do you become part of a sharing arrangement? A good arrangement is like a marriage: someone has to suggest it, if it's going to happen; it needs constant attention; and both parties have to be committed to making it work.

Here are some tips on how to make a sharing arrangement work.

• You have to make it happen. Operate on the assumption that an offer to share resources is not going to fall into your lap. The first step is to clarify what you really need, and then to determine whether a sharing arrangement, and if so what kind, is in fact a good way to meet the need. If you think some sort of sharing arrangement is a possible solution to a financial or service problem you're having, then it's your job to come up with a preliminary suggestion or offer, and find potential partners to discuss it with.
• Find partners you can get along with. Look for organizations that you know are compatible with yours, that share philosophy, purpose, and world view. Seek them out, make contact, and maintain it whether or not you think there are sharing opportunities available. You'll all do your work better if you're talking to and supporting one another; and if sharing opportunities do arise, you'll be part of an already-formed group that you know you can work with.
• Be honest and clear about what you're proposing. If your proposed arrangement is truly mutually beneficial (and it's ideal if you can come up with something that is), then present it that way. If in fact, you're asking for a favor, be straightforward about that, and about why you think it should be granted ("This is good for the community, and particularly good for the people you serve.") Be willing to offer something in return in the future if it's possible.
• Don't assume that a refusal is the end of the idea. Have backup partners or alternative ideas in mind, in case the first organization you approach isn't willing or able to share resources with you. If you don't have a good idea for a backup-- or perhaps even if you do--you might ask that first organization for ideas. It would also be reasonable to ask your contacts in the community about who might be interested in your plan, or might have the resources to work with you. Some organization you ask might itself be willing; if not, people are sure to have ideas, and everyone will know what you're looking for.
• Draft a written agreement. Once you've found a partner, work out the terms of the arrangement carefully and clearly, so all involved know what they're offering and getting in return, and who's responsible for what. Then draft a written agreement, making it as specific as possible, so there won't be any misunderstanding about any part of the arrangement.

The written agreement may include a timeline (how long the arrangement will continue, at least initially), with an evaluation period built in (During the first 90 days, either party can back out if it doesn't seem to be working or to be meeting their needs.) You may also want to include an escape clause ("Either partner may terminate the agreement on 30 days' notice. The agreement may be terminated immediately if the following situation arises...") It sounds like a lot of legal mumbling, but a good agreement that spells out exactly what the arrangement is about can save a whole lot of grief.

• Communicate, communicate, communicate. Once an agreement is in place and a sharing arrangement begins, communication becomes the key to making and keeping it successful. If a position is involved, then supervisors need to be in regular contact with one another and with the person in that position. If a joint program is being run, there has to be regular discussion about how it is going from all points of view. If space is involved, any minor irritations or problems need to be dealt with while they're still minor.

Any arrangement should have built into it through the written agreement regular, scheduled communication among the appropriate people, and everyone should take that communication seriously. Be honest, even when it hurts, and be willing to acknowledge difficulties and work to eliminate them. If you keep talking, your arrangement will probably work out fine. If you don't, you're almost undoubtedly going to have a tough time.

• Keep reevaluating the arrangement. As part of your regular communication, look closely at what you're doing and how well it's working. Don't be afraid to suggest changes that you think will improve it, and encourage your partner(s) to do the same. If you want the arrangement to keep working, you have to keep working to make that happen.

Common barriers to sharing, and how to address them before they wreck your partnership

There are a number of reasons that a sharing arrangement or collaboration can go wrong. The best way to deal with these issues is to anticipate them, and thereby prevent them from becoming problems in the first place.

• Turf issues. These are by far the most common barriers to successful partnership. Turf issues arise when an organization sees the possibility of another stepping on its "turf," i.e. performing (and getting paid for) services or activity that the first organization sees as its own province. These issues are sticky because they most often involve funding, philosophy, or ego.
  • Especially when funds are scarce, organizations can get threatened and angry when money they see as "rightfully theirs" goes to another organization. They may see the situation -- sometimes rightly -- as threatening their very existence.
  • Organizations may have strongly held philosophical or social biases. They may disagree -- philosophically, politically, or even ethically -- with approaches to an issue, a population, or the provision of services. If the two are trying to cover the same area, one or both may see their overlap as a life-or-death struggle, or one of good vs. evil.
  • The "ego" of an organization may be tied up in its being seen -- by the public, by funders, by other organizations -- as a leader, and thus wanting to be the lead agency, or first among equals in a partnership. If the organization is striving for legitimacy, it can be particularly sensitive to this issue.

Turf issues can best be addressed by facing them head-on when the partnership is being formed. If there is agreement at the beginning on the following points, and if they are regularly revisited during the course of the partnership, you can probably keep the dragons away.

Each organization should think beforehand about its compatibility with other organizations in a proposed partnership. Choose your partners carefully, with an eye toward philosophical and political compatibility.

Try to plan for the good of the collaboration as a whole. Then it's likely that everyone will see the result as good for their organization.

Keep the real purpose in mind. What is the goal of the partnership? Who will ultimately benefit? Why are you doing this in the first place? Try to remember this is a collaboration, not a contest. If there really is a common goal, then there ought to be a way to work together to accomplish it.

Be prepared to compromise, so that all partners can get as much of what they need as possible.

Again, draft a written agreement that lays out clearly the relationship among the partners, so that everyone has a clear understanding of it.

• Lack of communication. If the parties to an agreement don't communicate adequately, it is almost inevitable that they'll run into problems. This is why it's so important not only to set up a workable communication system, but to specify how it's going to be used. There should be clear agreement about the type and frequency of communication, and each partner should hold itself and others to the agreement.
• Non-performance. Nothing can destroy a collaboration more quickly than one partner failing to fulfill its part of the agreement. This may mean anything from not putting paper in the jointly-owned copier to not providing the service called for in a contract. There is no way to be absolutely certain beforehand that a partner will do what it's said it will, but...

Think carefully about whom you partner with. What's the organization's reputation--Has it been involved in partnerships before? Can you talk with its former partners?  If it's been a successful partner before, if it's known as an effective and reliable organization, the chances are it will continue to be so.

Make sure your written agreement or contract contains clear explanations of what happens if a party doesn't fulfill its obligations. The circumstances under which the contract can be broken, what the penalties are if work isn't done, deadlines if necessary -- all should be written into the contract and observed.

Address problems the instant they become apparent. If there seems to be a problem with an organization's performance, don't wait to see if it gets better. Call attention to it instantly. Although the first approach to the issue should be supportive ("You seem to be having trouble getting your part of the contract done. What can we do to make it happen?"), it should be direct and specific. If there are things other partners can do to help, or are not doing that are contributing to the problem, then those should be addressed and/or corrected as well. But the final result should be nipping the problem in the bud. If the situation doesn't change, the escape clauses and penalties in the written agreement need to be brought into play.

In Summary

Sharing positions and resources can be an effective and creative way of providing services or fostering an initiative when funding is tight, or when collaboration makes more sense than going it alone. Partnership isn't always easy, however, and success in sharing takes work and forethought.

• Think carefully about what you need, and about whether or why a sharing arrangement would meet your need.
• Remember that, although money may be a major reason for a sharing arrangement, it should never be the only reason, and that whatever arrangement you make should further your mission and fit into what you're already doing.
• Always think carefully about who the natural partners in a sharing arrangement would be, and about whether you share enough of a practical and philosophical base to work together successfully. If there's outside funding involved, be sure that the philosophy and standards of the funder and those of the partners are compatible.
• Work out who will be responsible for what and to whom, how communication will work, and other specifics of the arrangement before you ever enter into an agreement or begin to write a proposal. Make sure that all individuals involved in the actual sharing arrangement have discussed the conception and agreed both to the arrangement and to their roles and responsibilities in it.
• Be sure that your conception is clear and practical--i.e. that it can be carried out--, and that you have, under the arrangement, the resources and commitment to make it work.
• Draft a written agreement that spells out both the general outlines and the specifics of the arrangement, and stick to it.

If the formation of a partnership is careful, and includes everyone involved, there is every reason to assume that it will be successful and benefit everyone. Partnerships can make all the organizations involved, as well as the communities they serve, stronger, as long as they are based on shared goals, mutual respect and honesty, and ongoing communication.

You know the reasons to consider sharing positions or resources:

___Money

___Creating better services or stronger initiatives

___Shared philosophy

You know when to consider a sharing arrangement:

___When money or resources are available

___When there's an emergency or deadline

___When there's a particular community need to address

___When it's just a good idea whose time has come

You know the different types of sharing arrangements:

___Donations

___Bartering

___Sharing of costs

___Joint grants

You know the different resources that can be shared:

___People

___Space

___Equipment

___Miscelleneous

You have done the following in your attempt to create and manage a sharing arrangement:

___Taken the initiative to organize an arrangement

___Found partners you get along with

___Been honest and clear with your proposal

___Haven't been discouraged with refusal

___Drafted a written agreement

___Communicated with the other members of you arrangement

___Continued reevaluations of the arrangement

You have addressed the following barriers:

• Turf issues

___Chosen your partners carefully and thought out beforehand your compatibility

___Planned for the good of the collaboration as a whole

___Kept your real purpose in mind

___Been prepared to compromise

___Drafted a written agreement

• Lack of communication

___Set up a good system of communication

___Specified its use

___Defined and upheld clear communication agreements

• Non-performance

___Considered your partners carefully

___Made sure written agreement includes clear explanation of repercussions should a party not fulfill its obligations

___Addressed problems immediately

Example: Kansas City Develops MOU and Shares Space with Community Organizers

Case study: the Kansas City, Missouri Health Department has developed a long-term close and synergistic relationship with Communities Creating Opportunity, a largely faith-based community organizing group. The relationship has enriched both organizations’ capacity to do meaningful community engagement and enact upstream policy change. Read more.

For three years, the Patterson Youth Alliance had been working with Patterson's at-risk teens with great success. The program's combination of straight talk, clear structure, fairness, and responsibility, along with its teaching of life skills and academic support, spoke to teens with few positives in their lives and very little self-esteem. Most of the older participants had stuck it out to graduate from high school, and many had become real forces in the student community - peer mediators and student advocates. A considerable number were now enrolled in college. The younger kids were going through adolescent hell, generally complicated by horrendous family situations and their own self-destructive behavior. But with the support of the Youth Alliance, most of them were managing to stay out of trouble and in school, and were learning skills that would eventually equip them to become leaders in the community.

Nonetheless, the Alliance was in deep trouble. Its pilot funding had run out, and the foundation that had provided it wasn't interested in funding an ongoing program. The state agencies concerned with youth thought that the private sector should fund programs like this; the private sector thought the state should. The Alliance was caught in the middle... without money to operate for the coming year, and without future prospects.

The organization still had an ace in the hole, however: the county Human Service Coordinator really liked the program. PYA decided to approach her with a request to put a line item specifically for the program into the county budget.

Desperate circumstances sometimes call for desperate measures. In a case like this, where the existence of an effective and necessary program is at stake, one way to institutionalize it might be to get the program written into the local budget under its own name. Another option might be to get it included in the budget of a larger organization.

This section will examine what it means to become a line item in an existing budget, explore when and why you'd want to (and not want to), and explain how to go about it.

What do we mean by becoming a line item in an existing budget?

Becoming a line item, in its simplest terms, means being specifically written into a public or organizational budget for the long term. Your organization, by name, is granted a sum of money in the budget each year

A line item is one expense category, with the expense attached, in a formal budget. In the situation we're describing here, the expense category would be your organization.

Becoming a line item can take several different forms.

• Your organization can be written into a line item as a specific expense to be taken from a larger sum. The county budget allotment for Youth Services, for instance, might include this line item: "5051-0001: $435,000 for the provision of support and training services to at-risk youth, with at least $78,000 to go to the Patterson Youth Alliance for this purpose."
• Your organization can be written into a budget as a specific line item in its own right. Thus, a separate item in the county budget might read "5051-0010: $78,000 for the provision of support and training services to at-risk youth by the Patterson Youth Alliance."

The numbers at the beginning of budget items here are the line-item numbers by which the line items are identified, and they're the same year to year. (For those familiar with accounting and bookkeeping, these are really account numbers.) Because governmental budgets are often big and complex, line item numbers become very important. Sometimes, the only easy way to find a particular line item is by number. If you 're advocating for or conferring about this process with a government official, you have to be familiar with the appropriate line item numbers: it may be the only way they'll be able to find them in the budget.

• Your organization can become a line item in a public agency budget, one remove from the public budget process. The county Department of Youth Services, for instance, may specifically include a line item for your organization in its internal budget. (You might convince the director to do this through political pressure, or she might choose to do it on her own, because she's familiar with your program and wants to make sure it's funded.) Thus, although you might not be in the county budget, you'll be a specific line item in the Department of Youth Service's annual budget. You might be able to obtain the same result from a regional or city agency.
• Policy makers at the state or local level might create a generic line item for the work that you do, describing it in a way that would make your organization a very competitive bidder for the funds.
• A particular program of a coalition or organization, or even a small organization itself, might become a line item in a larger organization's budget. This could mean that the larger organization takes over the work completely (likely in the case of a coalition, which, after starting a program, would probably look for a home for it.) It could also mean that the smaller organization would establish a long-term contractual relationship with the larger, and would be paid through the larger organization to do its work.

We focus in this section on local and organizational budgets, because getting your own line item is far more likely at the local than at the state level. At the town or county level, this is sometimes how health or human service appropriations are made: at the state level, this option is always at the discretion of a legislator who's willing to make it happen, and is seldom advisable. For these reasons, we include information on obtaining a line item in the state budget as Tool #1, but advise against it except in extreme circumstances.

A note about federal budgets. In this section, we assume most of our audience is composed of smaller grass roots and community-based organizations. Getting written in as a line item is also possible in the federal budget, but only if your organization is big enough, has a mission that would justify its inclusion in a national budget, and either has the lobbying power to sway a congressman or senator, or that politician has some personal or ethical reason to include it. Our assumption is that few Tool Box users have the kind of clout necessary to become part of the federal budget, and that those who do already know how to use it.

When might you try to become a line item in an existing budget?

In most circumstances, this is a step that shouldn't be undertaken lightly, as we'll explain below. It carries some potential disadvantages with it, and it may, in some instances, be unfair to other organizations. Therefore, trying to become a line item shouldn't be entered into without a good deal of consideration, and without a compelling reason.

That compelling reason is usually (although not always) money. It may be the result of having your financial back against the wall, or it may simply have to do with trying to find a stable and reliable funding source.

• You might have been a successful pilot program - like the Patterson Youth Alliance - but have been unable to find funding to take over from the start-up money.
• Because of politics, a poorly-written proposal, or the funder's lack of commitment, your successful program might have been defunded, making it doubly difficult to find replacement funding.
• You may be a new or unique service, offering something for which everyone agrees there's a desperate need, but for which there seems to be no funding available. Often, funders - especially those in the public sector - are fully committed to their "regular" grantees, and have little or no money left over to accommodate new programs.
• Your funder may have gone out of business, or had its funds transferred elsewhere. This may be a result of a state or local reorganization of departments, or the collapse of a community foundation or other private source.
• The state or municipality may simply no longer be interested in your issue. Public funding is notoriously fickle. If your issue isn't currently hot or popular, you may find funding drying up only because politicians don't see it as connected to their reelection.

A caution here: be sure your organization should continue to exist. Are you actually doing a good job at whatever the work of your organization is? Are there other competent organizations available to take over if your organization folds? Have you done any sort of evaluation of your services or activities to determine whether you're doing what you think you are?

You don't necessarily have to do formal, quantitative research to get the answer to that last question. Looking at the actual results for participants, for instance, will tell you a great deal. (If most of the kids working with the Patterson Youth Alliance could have been expected to drop out of school and/or get in trouble with the law, and didn't do either, that's a pretty good indication of program effectiveness.)

Many organizations are simply unwilling or unable to look at reality: they're not doing a very good job. Sometimes funders notice this, and stop giving them money. (That "sometimes" isn't meant as a joke - inertia grips funders just as it does organizations. They often continue funding ineffective programs simply because they always have. As long as the programs do the paperwork and jump through the proper hoops, they continue to get their money.)

• You may not have the personnel resources to keep finding and applying for the small grants and contracts that have kept you going so far.
• You may be seeking to stabilize your funding so that you can turn your energies to the areas for which you founded the organization in the first place - service to the community and the target population.

Some communities may also provide other types of line-item funding opportunities:

• Basic funding. Some municipal and county budgets use line items in particular sections as regular avenues to fund local organizations and agencies. In other localities, there may be a city or county human service budget, which in turn includes line items for local organizations. You're not likely to get enough to fund all your operations, but you can at least lock in a piece, and this funding doesn't carry the disadvantages discussed later in this section.

Either of these basic funding situations might include a competitive proposal process, or simply involve administrators choosing organizations to fund. In an "I -win-you-lose" competitive situation, especially one which doesn't involve a proposal process, beware of popularity contests and favoritism. These generate bad feeling and aren't good for anyone, even if you're on the positive end. If the situation is charged with these issues, you may want to think carefully about the implications of taking part in it.

One way to think about this process is to ask whether it's good for the community as well as for your organization. Will it lead to divisiveness among agencies and community based organizations? Will it adversely affect services to your target population? Who will lose if you get what you're asking for? If the answers to these questions are unsatisfactory, or raise more questions than they answer, you might want to be cautious.

• Becoming a line item may be a step in changing policy toward your issue through a sympathetic official. You might want to consider it if the issue is important, but largely unrecognized. It can raise the consciousness of officials and the public alike.
• If you're a new organization, becoming a line item may help to establish you as an integral part of the local health and human service system, and give you credibility.
• You may have a one-time-only opportunity, thanks to a helpful official.

Organizational budgets. There may be a range of opportunities for becoming a line item in the budget of another organization. These include:

• Another organization obtains funding for the same work you do, and offers to contract or collaborate with you.
• A friendly organization is willing to apply for funding specifically to support your operations.
• A joint funding proposal results in a grant award to another organization, as lead agency, to fund your work.
• A coalition or initiative sponsors the founding of a program to meet a particular need, and seeks to spin it off permanently to a community organization that will sustain it.
• You completely give over a program to a larger organization that has the capacity to keep it going.

Why would you want to become a line item in an existing budget?

Local government budgets.

Becoming a line item in an existing local government budget, especially at higher levels, is not to be done lightly. It carries both distinct advantages and distinct disadvantages.

The obvious advantages here:

• Your organization will stay alive and continue to operate.
• You'll get a chunk of stable funding that you don't have to compete for every year.
• You'll gain the attention and protection of the official who put you in the budget. By making sure to maintain the connection between him and your organization, you may be able to get his help in other ways as well. In addition, he's more likely to be aware of the importance of your issue.
• Having stable funding may allow you to be more creative in what you do, or to use your funding in ways that make more sense for your organization than the ways funders might have mandated.

Be aware that if you're part of a department or agency budget, you'll probably still have to adhere to the funding rules of that body, just as if you'd been funded through the normal process.

With these positives, however, come a number of equally powerful negatives:

• You may anger colleagues by bypassing a funding process they still have to contend with, and you may find it hard to work with them in the future.
• You may be taking money away from other, equally-needed services.
• Rather than freeing you to be creative, it may make your organization complacent: Our funding is secure, so why try to improve, or advocate for the field, or think about expansion?
• It may not be ethically consistent with your organization's view of the world, and could turn the organization as a result into something very different from what you had in mind.

There are other elements to consider here as well. For one thing, you are likely to know a number of the people who create and vote on the local budget, and thus have both a better chance of getting what you need and the opportunity to keep your needs in people's minds when they're not thinking about the budget. Furthermore, if a line item in the local budget is the norm for agencies, very few if any of the above disadvantages are relevant.

In some ways, many of the disadvantages may be irrelevant even if it's not the norm. You may be breaking ground for other agencies and organizations by convincing the local government that it has an obligation to fund health and human services or other community programs. Your line item may be the foot in the door that allows local organizations to be considered for funding, and that starts local officials thinking differently about their responsibility for community services.

In addition, a line item, as discussed earlier, can provide a higher profile for both your issue and your organization. Once you're in the budget, it means that local officials have to consider the issue each time they engage in budget deliberations, and that puts it before the public as well. Your presence in the budget lends legitimacy to your work - it's worth funding in the budget, after all - and establishes you as a respectable organization.

Organizational budgets.

As with public budgets, a line item in the budget of another, especially larger, organization, has its pros and cons.

Some of the positives:

• It provides you with a stable source of funding.
• It can free you to be creative, rather than tying you to the whims of a funder.
• It can free you from administrative drudgery: that may be the responsibility of the other organization.
• It can expand the range of services of your organization by giving you access to those of the other organization as well.
• It can leave you with a mutually beneficial collaborative relationship with the other organization.
• It establishes you as a partner of a larger organization, and may thus work to improve your standing in the community

On the other hand, there are risks and other possible negative consequences here as well:

• You're dependent on the other organization's funders, just as you were on your own funders in the past.
• You're dependent on the other organization's continued interest in sponsoring your work.
• You may have to give over control of your organization and your work to the other organization in return for the budget line item.
• The other organization could use its position to push you in directions different from those you'd prefer to go in, or even to take over your work (assuming that wasn't part of the original agreement).
• You may find, after the fact, that you have serious philosophical differences with the other organization, or that your methods of operation are incompatible.

Perhaps even more difficult to deal with is the possibility of serious personal differences among directors or staff of the two organizations. This can lead to all sorts of complications, as you can easily imagine.

You have to consider all these and other possibilities before you make the decision to enter into an agreement that makes you a line item in the budget of another community organization.

How do you become a line item in an existing budget?

Once you've weighed the pros and cons and decided to go ahead, how do you actually get yourself into a local government or organizational budget? The short answer is politics, but that's not quite enough. The first step is to learn everything you can about the budget process you're concerned with: who creates the budget, to whom is it distributed for comment and editing, by whom and how is it voted on, who are the key players? These questions can have very different answers in different places.

A free-form guide to becoming a line item in a local government budget

A local government budget may be one that covers a city or town, a region of several towns, a rural area, a county, or - in a large city - even a neighborhood. Each type of budget may be administered totally differently - or may or may not exist - in different places, and the possibility of your becoming a line item may vary greatly as well (thus the freeform rather than step-by-step nature of this part of the section ).

Local budgets really have no one "typical" process. As a result, finding one major sponsor might not help you at the local level the same way it would in a state legislature. In a rural area where the author worked, for instance, human service agencies - in addition to applying to the County Human Services Coordinator - had to make presentations for funding before the County Finance Board, made up of selectmen and private citizens from towns with populations ranging from 400 to 20,000.

If, as discussed above, separate line items for organizations represent the way health and human services are funded locally, then becoming a line item becomes simply an issue of convincing the local government in question that your organization is worth funding. Your chances may be enhanced by the fact that you're the only local organization providing the service or doing the job in question. If that's not the case, you might consider forming alliances with other providers to get a line item that includes everyone.That might not be possible in a large city, where there could be tens, or even hundreds of agencies doing similar work; but it might be very possible in a rural area or small town, or even in a small to mid-size city (up to a population of perhaps 150,000).

Even if a separate line item is not the norm, it may be the only way a local government can fund you. In a rural area, that may mean getting a line item into the annual budgets of several different communities. Whatever the situation, it means legwork.

Tip O'Neill, the former Speaker of the U.S. House of Representatives, said that all politics is local. By that he meant that votes are won, deals are made, and initiatives are built one person and one small group at a time, whether those people are your neighbors in Somerville, Massachusetts (where O'Neill began his political career), or members of the U.S. Congress. When politics actually is local - and make no mistake: getting yourself a line item in any public budget is political - this observation is doubly accurate

What you can learn from Tip O'Neill is that you have to make and maintain personal contact with the people who make up the local budget, with those who approve it, and with those who can put pressure on either of those first two groups. That means:

Know the budget process inside out - who's responsible for what, who has authority, what the budget is based on, what the timelines are, etc.

Know which individuals and groups are really the keys to the process

Establish personal contact - ideally, personal relationships - with those key individuals and groups:

• Elected officials and bodies: mayors, city or town councilors, aldermen, selectmen, county commissioners, boards of health, etc.
• Appointed officials and bodies: Town planners, town or county human service administrators (if they exist), county health commissioners, finance boards, etc.
• Public employees who may have influence on the budget process: Town or county accountants, bookkeepers, administrative assistants, community developers, etc.
• Influential members of the community, especially those who are in some way affected by your issue: business leaders, political and community activists, the media, opinion leaders, clergy, service groups, leaders and spokespeople representing particular groups in the community, and average citizens with higher-than average credibility

An example of this last appears elsewhere in the Tool Box as well. A local man had been shot down as a fighter pilot during the Vietnam War. He came home without the use of his legs, and the whole town watched as he, without complaint, learned - slowly and with great pain - to walk with crutches, drive a car, and resume a normal life as a family man, owner of a small business, and participant in the community. His standing and credibility in that town are unquestioned, and when he ventures an opinion, people usually listen.

Convince or remind these people and groups of the importance of what your organization does. 

• Numbers and data are helpful here. If you can show that you're performing a service for a large number of community members, and that the need is far from being met, local officials are far more likely to look with favor on your request.
• Even more helpful is the testimony of participants. This testimony is extremely powerful at the local level, because the hearers probably know, either personally or at no more than one remove, the people whose stories they're hearing. They went to school together, or their kids did; they're related by blood or marriage; they belong to the same clubs, the same sports teams, the same volunteer fire department or ladies' auxiliary or veterans' organizations. It's very difficult to ignore an issue when it directly affects your family, friends, or neighbors.

A learner in an adult literacy program, who had graduated from the local high school unable to read 25 years before, agreed, with great misgivings, to take part in a presentation the program was making to a Chamber of Commerce breakfast. He was embarrassed because he knew - indeed, had grown up with - many of the people in the room. Nonetheless, he talked about how difficult being a non-reader had been for him for years, about how even his wife hadn't known. And he described what it was like for him to learn to read after all that time, and the elation he felt when he could actually read a menu or a newspaper without faking it... when he could be like everyone else.

There was dead silence while he spoke. When he finished, the applause was deafening, and person after person, many of whom he'd known most of his life, came up to him afterwards to tell him how awed they were by his courage and persistence. He gained more support for the program that morning than any number of TV specials or newspaper stories could have, because the experience of the people in the room was personal.

• A third argument is cost effectiveness. It has been reckoned that every dollar spent on human services brings back or saves four in the long run. For some kinds of issues - job training, adult literacy, and preventive health, for instance - the return is easily shown. If a local government can be convinced that its investment will have a visible return - and it's much easier to see returns at the local level - it will be willing to fund you.

Once you've made your contacts, keep track of the budget process, and keep gently making your point to anyone who's involved in it. Furthermore, it's your responsibility to mobilize support, both from participants in your organization and others in the community, and to help your supporters make your case.

Follow-up

Even though you have a line item in a local budget, your task isn't over.

You have to keep at it indefinitely.

• Keep in regular contact with the folks who helped get you into the budget, and, if they leave, with their successors.
• Remind them what a good job you're doing (and make sure that your reminders are true), and how important your work is to the community.
• Continue to give them numbers - how many people you're serving, what the results are, etc.
• Invite them to visit and to organizational events, and introduce them to beneficiaries of the organization. Political memories are short: it's your job to make sure no one forgets about you.

An even more freeform guide to becoming a line item in an organizational budget

In the case of a public budget, being included in a line item is virtually always a favor, even though your being funded may greatly benefit the community. In the case of an organizational budget, you may be asking for a favor... but you may as easily be offering one, as in the case of a coalition spinning off a successful program.

Furthermore, organizations are even more likely to be different from one another than local governments, so the actual steps to getting yourself into an organizational budget will vary tremendously. There are, however, some basic guidelines that it's worth paying attention to.

• Consider carefully the mission, philosophy, methods, target population, etc. of the organization you're considering. Do they match, or are they at least compatible with, those of your own organization? Are you likely to find yourselves at odds over basic issues, or over the importance of doing things in particular ways? It's important that you agree on some basics before you decide to work together.
• Make personal contacts at more than one level of the organizations. If the relationship begins with the directors, for instance, make sure that other staff as well get a chance to meet and to discuss what they do and how they view it. The better the personal relationships, the better the organizational relationship is apt to be.
• Think about what each organization can offer the other. If you're getting funding, what are you bringing to the table that will benefit the other organization or its target population?
• Establish mutual trust before you enter into any agreement. No matter how important money is in this arrangement, you can't allow it to be the only driving factor. There are so many things that can go wrong here that you have to be sure that if something does, you have enough trust and good will to resolve it (and that you start out trusting that each organization will do what it says it will).
• Work out any agreement carefully beforehand. In the ideal, the terms of the agreement should be the result of internal discussions that include, in some way, all the stakeholders in both organizations. The final agreement should be accepted by both organizations, and everyone involved should understand how it's going to work, whether it's as drastic as one organization being absorbed by the other, or as simple as a fee-for-service arrangement.
• Put it in writing. Once you know exactly what it means to be a line item in the other organization's budget, you should draft an agreement to be signed by both parties, spelling out just what your relationship, obligations, expectations, etc. will be. This can save both organizations from enormous grief later..
• Continue to maintain and build your relationship, even if you reach a point where you no longer need the line item. Once a relationship has been established, it can become the basis for collaboration, and for better functioning for both organizations, as well as more benefit to the community.

In Summary

One way to institutionalize your organization is to acquire a line item dedicated to it in a local government or organizational annual budget. This strategy has to be carefully considered. While it will bring you stable funding, it also carries risks. At the community or county level, a line item may in fact be the normal route to health and human service funding, or it may lead to jealousy and anger among colleagues. At the organizational level, it can leave you at the mercy of a larger, more powerful organization, and even jeopardize your mission.

At the same time, in addition to money, a local line item may gain recognition for your issue, add respect and credibility to your organization, and even help local government understand its obligation to fund health and human services in the community. An organizational line item may evolve into a mutually beneficial collaborative relationship. If you decide to pursue it, gaining a line item for your organization can be an effective way of assuring funding for the future.

If you plan to become a line item in a local government budget, you would be wise to do several things:

• Familiarize yourself with the local budget processes. Learn who the key players are, what really happens (as opposed to what the rules say), what the timeline is, and who can influence the process.
• Get to know personally, if you haven't done it already, local elected and appointed officials, local government employees, influential citizens and groups, the media, activists, and opinion leaders.
• Convince them all of the necessity and effectiveness of your organization, using numbers and data, measures or indications of cost effectiveness, and the personal stories of participants in your program.
• Help your sponsors help you by marshalling support in the community to help convince those who develop the budget that they should include your line item.
• Once you have obtained a line item for your organization, continue to maintain contact with your sponsors and supporters... forever.

Some general guidelines for becoming a line item in an organizational budget are:

• Make sure the other organization's mission, philosophy, and methods are compatible with yours.
• Focus on personal contact between the organizations.
• Consider what each organization can offer the other.
• Come to agreement only after careful internal discussion.
• Put it in writing.
• Continue to build the relationship.

Becoming a line item in a state budget

Becoming a line item in a state budget should only be attempted when your financial back is against the wall. It's really an issue of being unable to find funding any other way: there's really no other reason to engage in this process.

Not being able to find funding doesn't mean that you're not sure whether some of your proposals will be funded, or that finding funding is difficult. It means that you've actually exhausted every other possible avenue to get money for your organization. There are no apparent sources of funding - now or in the foreseeable future - and you're going to cease to exist unless you can become a line item in the state budget.

There are several reasons for our insistence that a state line item should be a last resort. While becoming a state line item carries with it the advantage of long-term, stable funding, both the politics involved and the results are almost always inherently unfair.

• You are implicitly trying to convince a legislator or group of legislators that your program is worthy of statewide funding, while others are not. That casts doubt on the competence and effectiveness of other organizations, without any regard for their actual achievements.
• You may be diluting the bargaining power of an already-underfunded field. If the field can't present a united front to advocate for money from local officials , because people see getting their own line item as a better deal, its ability to gain and maintain an adequate level of funding is severely compromised.
• You could make it impossible for others to have the same privilege. When a certain critical mass of specific line items is reached - often not more than four or five - legislatures usually decide to allot no more, and even to eliminate those that already exist. They may also scrutinize the budget for that issue, and everyone may end up with less than they had before.
• You are risking the anger of your colleagues, and may therefore find it harder to work with them in the future.
• You are risking placing yourself in a position where the interests of the field - and therefore of the target population statewide - are in direct conflict with the financial interests of your organization.

The exceptions here are if your organization operates statewide, and/or is the only one of its kind in the state. Under those circumstances, a line item in the state budget might be appropriate.

That said, we'll examine how to become a line item in the state budget. States are, in most cases, not as different from one another as local governments may be. Let's take a look at a typical state budget process, one that's similar to that in a large number of states. (The process in your own state or commonwealth, of course , may differ.)

A typical state budget process 

Each state has a governor and a legislature. Most legislatures, like Congress, are bicameral (have two branches, a House of Representatives and a Senate). While some legislatures are full time, and meet, except for set recesses around holidays, year-round, others meet only a few weeks or months a year. Part-time legislators are often paid very little, and may continue to work at their regular jobs even during legislative sessions. It's important to find out how your particular state operates, since that will dictate how its budget process is similar to and different from the one described here.

First, the Governor, in conference with his Cabinet and other advisors, puts together a budget that highlights his priorities, and sends it to the legislature. The Governor 's budget goes first to the Ways and Means Committee of the House of Representatives, which (often with the participation or under the direction of the Speaker of the House) reworks it - sometimes so that it is all but unrecognizable. It then goes to the membership of the House, where it's debated and voted on. As part of the debate - which may go on for weeks - amendments (additions or changes) by individual members, often having to do with specific funding for their districts, are proposed, debated, and voted on. Eventually, a final budget, including the amendments that have been accepted, is approved on a vote by the full House.

The budget next goes through a similar process in the Senate.

We now have three budgets: the Governor's original budget (no longer relevant, but the Governor may lobby the legislature to include full funding for at least some of his priorities); the House budget; and the Senate budget. To work out the differences between their budgets, the House and Senate form a small, evenly-divided Conference Committee. The chairs of the Ways and Means Committees may co-chair it, and its members wield considerable power while it meets.

The Conference Committee, amid lobbying from other members of the legislature, eventually produces a mutually agreeable budget, which then goes to the House and Senate, where it may be debated and amended again. The final budget, approved by both houses, is sent back to the Governor.

The Governor can't add anything to the budget, but most governors have a line-item veto, meaning that they can reduce or eliminate funding for particular line items. So the Governor can approve the budget as it is; veto the whole thing (which virtually never happens); or, as is most often the case, use his line-item veto to eliminate or reduce funding for line items he doesn't like (or whose elimination will make his political enemies unhappy). The House and Senate then get the budget back, and may try to override at least some of the Governor's line-item vetoes with a 2/3 majority in each house. The budget that remains after the override process is what the state will operate on for the next fiscal year.

In most states, the aim is to have a budget in place by July 1, the beginning of the fiscal year. In reality, if there is serious disagreement between the houses or between the governor and the legislature, there may be no budget until well into the fall.

A step-by-step guide to becoming a line item in the state budget 

Find a legislative champion. Virtually the only way to get into the state budget is to have a legislator put you there. Therefore, you need to find a legislator who's willing to go to bat for your organization. The most likely candidate is one who represents the district your organization operates in, because her constituents are directly affected. If your organization has broader appeal, a legislator specifically interested in your issue may also be a possibility.

In most states, your legislator's party affiliation or relationship with the leadership may be a major issue. Being in the minority might mean that she has no clout at all. Being in the bad graces of the leadership, regardless of her party affiliation, could mean that she'll never get anything she asks for. If she's in a key leadership position, on the other hand - chair of the Ways and Means Committee, for instance - she can probably get just about whatever she wants. Look for a sponsor who can deliver.

You have an even better chance if you can get both your representative and your senator involved. If your organization works in more than one legislative district, try to get all the legislators in all the districts on board. The larger the group, the better your chances.

You might work with the legislator directly, or you may be able to accomplish your purpose through an aide. In either case, you'll have to convince her either that your organization provides an irreplaceable and necessary service to her constituents, and/or that her ability to get you into the budget means votes for her.

There are a number of ways to approach this:

•  Numbers help. If you can say something like, "We serve over 300 people a year in your district," that's a powerful motivator.
• Need helps, too. Establish the need: "Over 9,000 people in the district show up (on the Census; in an independent study; according to the county Human Service Board; etc.) as needing this service."
• Get her to visit your organization, talk to participants, walk the neighborhood with you, etc. to understand the issue better.
• Bring individual participants or small groups to visit her - at the State House if the size of the state doesn't make that too difficult - so that she can get to know some real people who experience the issue and the results of your organization 's work firsthand.
• Ask prominent members of your Board, supporters from the business community, other legislators you know, experts on the issue, etc. to talk to the legislator, and to urge her to meet your organization's need for funding.

Once you've convinced a legislator to sponsor your line item, you have to help her by putting pressure on other legislators to go along, if you can, through the remaining steps of the process. If you have connections to other legislators, you should use them. Mobilize community members or participants or both to call, write , telegraph, or e-mail legislators in support of your line item. Work with your legislative sponsor to come up with strategies to convince other legislators, and then take charge of carrying them out. You can't expect one legislator to do this in a vacuum.

Your champion asks someone in the leadership or on the House Ways and Means Committee to put your line item into the House budget. Unless she's on the Ways and Means Committee herself, or has a good deal of power in the legislature, things like this normally work on a quid pro quo basis: your legislator has to promise to return the favor, or has to have done a favor for those she's asking, so that they currently owe her one. You have to give her a good reason for putting herself in that position: she has to believe strongly in the cause, or has to believe that her support for your organization will help her in the district over the long term.

You may notice we've bypassed the Governor's budget here. It's generally not politically possible for the Governor to include a line item for a local program - he'd probably be roundly criticized in the media as soon as news people found out. It doesn't hurt to try to get to know someone in the Governor's office, however, in order to garner support or head off a line-item veto farther down the road.

If the line item isn't in the Ways and Means version of the House budget, your champion has to try to get it in by amending the budget on the House floor. Once again, this means putting herself in debt to the leadership or calling in more favors: she has to believe that her actions will help large numbers of her constituents , and/or that they'll help her own reelection chances and continued popularity in the district.

Once the House budget is done, whether or not your line item made it in, you have to play the game of garnering support all over again in the Senate. Making sure you have your state senator on your side from the beginning will make things easier. If he's been working the senate to get your line item into the budget, you may have an easy time of it. If not, you and your legislative sponsor may have to scramble. She's likely to have some contacts in the Senate, and you may have Board members, community supporters, or others who have contacts as well.

By and large, a small line item (and, in a large state with an enormous budget in the billions of dollars, "small" can mean several hundred thousand or even a few million dollars) that comes through in the House budget would be left in by the Senate as a courtesy to a colleague, unless it's part of a larger item that gets cut. If there's a budget crisis, however, or if your sponsor has powerful enemies in the Senate, there's always the chance that your line item will be eliminated there. It makes much more sense to do everything you can to make sure it's included in the Senate version in the first place than to have to try to get it in later.

The ideal here is to end up with your line item appearing in both the House and Senate budgets with the same amount of money allotted to it in each. If that happens, the Conference Committee will leave it alone, and your effort is done unless the Governor vetoes it.

If your line item doesn't make it into the House budget, the Senate is obviously crucial. Getting it into the Senate budget means that it will at least be a matter of discussion in the Conference Committee. If it doesn't get into the Senate budget, your chances of success almost disappear.

Almost, but not quite. If your line item isn't included in either budget, you still have one (slim) chance: the Conference Committee. It's possible to convince members of the Conference Committee to put your line item in the budget...but there 's almost no reason they would if it hasn't gotten in to this point. It's your last chance, however, so you better take it. Otherwise, you're out of the race.

The budget, with your line item in it, now has to be signed by the Governor to become official. (Here's where having a friend or contact in the Governor's office can come in handy.) If he leaves your line item alone, you're home free; if he vetoes it or reduces its appropriation, you have only one chance left.

Override. If you and your sponsors can muster a 2/3 vote in both houses, you 're finally in the clear. Once again, it's a matter of bringing to bear any pressure you can muster in any way you (ethically) can.

Although a state budget, and each line item in it, is only good for one year, line items like this, once they're in the budget, tend to remain undisturbed until the economy goes bad or there's an effort to reform the budget (the two often come together). Then, every line item might be scrutinized, and yours may be in jeopardy. By then, you may no longer need it...but if you do, you may have a problem. The legislator who sponsored it may be gone, and unless you've maintained contact with her successor(s), you may be left with no defenders. In that case, you'd better find another source of funding.

It's also your job to be ethical about your situation. If and when you get to the point where your organization no longer needs its own special line item in the state budget - either because you've gotten public funding on your own or because you've found other funding adequate to support your work - have yourself taken out. Your colleagues will thank you, your legislators will be impressed with your integrity , and you'll feel better about the organization's ability to be self-supporting. Even if you get to that point, however, don't be a fair weather political friend. Maintain your state and local contacts: you owe them something, they're important in any case, and you never know when you may need them again.

What do we mean by becoming a line item in an existing budget?

___You understand what a line item is.

___You're aware of the different ways of becoming a line item in a local public or organizational budget.

When would you want to become a line item in an existing budget?

___You're trying to become a line item because your financial back is against the wall, and there are simply no other funding sources available to you.

___You're trying to become a line item to stabilize your funding, and to avoid spending so much time searching for and applying to small funding sources.

___You're attempting to become a line item as part of your basic local funding.

___You're attempting to become a line item to change policy on your issue, to increase your credibility, or to take advantage of a one-time opportunity.

Why would you want to become a line item in an existing budget?

___You know the advantages of becoming a line item:

• Your organization will stay alive and continue to operate.
• You'll get a large chunk of stable funding that you don't have to compete for every year.
• You'll gain the attention and protection of whoever put you in the budget.
• Having stable funding may allow you to be more creative in what you do.
• It can free you from administrative drudgery.
• It can expand the range of services of your organization by giving you access to those of another organization as well.
• It can leave you with a mutually beneficial collaborative relationship with another organization.
• It can establish you as a partner of a larger organization, and may thus work to improve your standing in the community.

___You're aware of the potential disadvantages of becoming a line item:

• You may anger colleagues by bypassing a funding process they still have to contend with.
• You may be taking money away from other, equally-needed services.
• Rather than freeing you to be creative, it may make your organization complacent :
• It may not be ethically consistent with your organization's view of the world.
• You may be dependent on another organization's funders.
• You may be dependent on another organization's continued interest in sponsoring your work.
• You may have to give over control of your organization and your work to another organization in return for the budget line item.
• The other organization could use its position to push you in directions different from those you'd prefer to go in, or even to take over your work.
• You may find that you have serious philosophical differences with the other organization, or that your methods of operation are incompatible.

How do you become a line item in an existing local government budget?

___You are totally familiar with the budget process and timelines.

___You have personal contacts with most or all of the people who might have some influence on whether you become a line item or not.

___You make sure that all the appropriate people understand all the possible arguments for making you a line item, and have all the information they need to make those arguments to others.

___You maintain contact with those involved in the budget, and continue to push your point.

___You continue to follow up once you have become a line item, so that you can maintain your status.

How do you become a line item in an organizational budget?

___You consider carefully the mission, philosophy, methods, target population, etc. of the organization you're considering.

___You make personal contacts at more than one level of the organizations.

___You think about what each organization can offer the other.

___You establish mutual trust before you enter into any agreement.

___You work out any agreement carefully beforehand.

___You put it in writing.

___You continue to maintain and build your relationship, even if you reach a point where you no longer need the line item.

The Pearson Young Leaders Initiative (PYLI) is a pilot program: it's been funded for two years to establish a core group of young leaders and potential leaders in the community. The organization has done a great job of contacting youth and putting together leadership trainings and support groups. Because of its work, there's a cadre of youth in the community having an effect on such issues as youth violence and safe sex.

Unfortunately, the two years is up, and PYLI is about to run out of funding, with no apparent possibility for more. The staff has exhausted all the possible sources of money, and they're faced with the end of the organization. Yet the work they've done has been important, and needs to continue. What can they do to sustain their initiative in the community?

One course of action is to try to find another organization to take over PYLI's function. The Pearson Youth Development Corporation (YDC), with which PYLI has worked, is willing, and has the resources to make it happen. Furthermore, YDC seems eager to take on at least some of the key staff members who made PYLI so successful, thereby assuring continuity to the leadership initiative. This seems like a match made in heaven, but how can PYLI be sure that it's a good idea, and that YDC will really continue and build on the good work that's been done?

Community organizations sometimes run out of funding possibilities, or decide it 's time to stop operations. The state may award their contract to someone else, or they may have been funded as pilot programs, with the assumption that the private sector would take over funding at the end of the pilot period. Perhaps a community coalition has acted as a catalyst to develop a program, with the intention to fold it eventually into another agency. In all of these situations, whether or not you've planned it that way, continuing your work can mean finding another organization to take over what you've been doing. That's what this section is about.

This section will help you understand exactly what incorporating your work into another organization means; decide when and if it's necessary; figure out how to choose an appropriate organization; negotiate with that organization to make sure that the important parts of what you're doing are indeed continued; and make the transition to the new organization. Perhaps most important, the section also has some suggestions about how to let go of your organization or initiative, and walk away feeling good about what you've done.

What does it mean to incorporate your operations into another organization?

How does one organization take over others functioning? It's often not quite as simple as it seems, and there are really a number of ways it might happen. Let 's look at two common variations, bearing in mind that there are other possibilities as well.

Another organization absorbs yours as a subsidiary, taking responsibility for overall management and funding. In this instance, your organization may be able to remain essentially as it is, with nothing but a change of administration. Some features of this kind of arrangement might be:

• Some or all of your line staff - the people who do the actual work of the organization - would remain part of the new organization, doing what they've always done.
• Your director might leave, or might get a new title (program director, for instance ) and join the management team of the new organization, perhaps as the administrator for what had been your organization.
• Your Board would probably dissolve, but some or all members might join the Board of the new organization.

Clearly, in this situation, there are few changes, and your organization can continue to operate pretty much as it has in the past. It may even keep its name.

A much different scenario is one in which your organization ceases to exist at all, and its services and activities - or only some of them - are taken over by the new organization as part of what it does. In that case:

• The name and structure of your original organization would disappear.

The name may be kept on as a program name because it's familiar to the community. This would help with recruitment, with funding, and with community support.

• Some or all of your staff may be hired on... or none may be.

If some or all of your staff members are particularly good or knowledgeable, it 's likely that the new program would try to find a way to keep them. Even in that circumstance, however, the possibility would depend on funding.

• The way things are done would probably be changed at least somewhat, and perhaps completely.
• The services or activities would remain, but there would be almost no trace of your original organization.

This second instance might be a lot harder to deal with, because it looks like all your work has vanished. If the name of the organization is gone, and all its operations are different, it might seem there's nothing left of all the effort, the hours and hours of unpaid overtime every week, the worry, the stress, and the occasional elation that all go into starting and building an organization.

It's important to remember that your goal in incorporating into another organization is to make sure that the services or activities that you offered continue to exist in the community. Even if your organization itself disappears, if you've been able to institutionalize your work in some way, you've done your job. Just as each succeeding generation has to die to make room for the next, it may be necessary for your organization to disappear so that its work can be carried on.

How to decide when it's time to incorporate into another entity?

The handwriting may be on the wall that your organization can't survive on its own. Even so, how do you know that you've actually hit the point when you need to start looking at other possibilities? There are a number of possible ways to tell when it's time to investigate becoming part of another organization or initiative.

An internal discussion, involving some combination of Board members, staff, participants, and volunteers, says it's time to make the shift.

A move like this should never be embarked upon without internal discussion. The initial idea may be the product of one person - most likely the Board chair or the director - but it needs to be discussed and generally agreed upon by everyone who has an interest. This particularly includes participants, since they probably have the largest stake in what happens to the activities or services in question.

The chances are that, except in a situation where incorporation into another organization has been the goal right along (see below), the initial reaction will be negative. People seldom want to give up independence if they have the choice. However, discussions may serve to convince those concerned that they have no other reasonable choice. It will be much easier to make the transition if you talk it out within the organization first and have the support of the various groups and individuals involved.

When you knew from the beginning that you would incorporate into another organization, and the agreed-upon time has come. There are a number of circumstances in which this might happen:

• You're handing over control to another organization that was formed, as a result of your work, specifically to absorb the parent organization. This other organization might be participant-run, community-controlled, run by a coalition, etc. In any case, it's been seen all along as the more appropriate parent for your operations.
• A community coalition that serves as a catalyst has started an initiative or intervention that it now wants to spin off to an established organization for the long term.
• You knew from the start that you wanted to be taken over by a larger, better-established organization, and simply waited till your work was well enough recognized that the other organization would be willing.
• The part of the organization's mission that only it could do has been accomplished, and the rest can be taken over by someone else. In other words, there's no need for the original organization any more.

There have been many organizations that existed to put themselves out of business. One in particular trained members of the Chicago Hispanic community not only in English language and literacy, but in community activism. Ultimately, the trainees became the trainers and English teachers, and the original organization dissolved, leaving the field to an organization founded and run by participants of the original.

• Your original funding stipulated that the services should be folded into the fabric of the community. Funding as a pilot program, seed money, some forms of public funding, and other arrangements sometimes require that an organization's work be incorporated into other entities by the end of the funding period.

When another organization with great resources makes an offer to absorb your services and activities and staff.

When another organization can offer better services to the target population.That may mean, for instance, that it has a professional staff with better training; that it has multilingual staff and programs; that it offers child care, or transportation, or longer and better service hours; or simply that it can do what you do better. There may be times when organizations have to admit that, because of resources, training, or some other asset, another organization is better equipped to do the job.

When you've hit the wall on resources. This can mean one of several things:

•  The state or another funding source has switched your main or only grant or contract to another organization. This may result from your philosophical differences with the funder, from problems with paperwork, or from the funder's perception that your numbers weren't high enough. Whatever the reason, your funding has gone elsewhere, and you have to deal with the consequences.
• You simply can't find funding to continue. If you're publicly funded, cuts in public money - caused by an economic downturn, a change of administration from liberal to conservative, tax cuts, etc. - can doom your organization. Perhaps you had too little funding to begin with, and simply can't sustain what you've been doing. Or perhaps public and private funders don't recognize the importance of your issue. Whatever the reason, you've explored all the possibilities, and there's no money to be had.
• Your Board decides the organization has no future, and dissolves it.

A small organization that encouraged parent involvement in schools found itself in the odd situation of being highly respected by both constituents and colleagues, regarded as a paragon of virtue by the community, and totally unfundable. The organization produced a highly-respected and widely-distributed newsletter, ran conferences and workshops that were in great demand, and maintained a widely-used and helpful library and librarian.

However, although it reached out to minority and low-income communities, because of a combination of geography and sociology, it served mostly white, middle-class women. No one wanted to fund an organization of this kind. Ultimately, the director, having tried everything she could think of, went to her Board and asked whether they wanted to run for another year on the money left in the bank, or whether they should dissolve the organization. The Board chose the latter, and the library and some events - all that was left of the organization - were folded into a larger organization in the same Massachusetts city.

• The organization's founders leave, and there's no one else willing to take over.
• Your funding was time limited from the beginning, and you've been unable to find replacement funding.

How to choose the right organization?

You've worked really hard to get to the point where you have services and activities that need to be continued in the community. You're not just going to incorporate those services into any organization: you want to find one that shares your ideals and your vision. In the real world, your choices may be somewhat limited, but you can still develop some standards, and meet as many of them as possible.

Some things to look for as you consider organizations which might take over your operations:

Look for an organization with a mission, philosophy, and values similar to yours. An organization with a similar mission will do some of the same things you've been doing, or at least be oriented in the same direction. If you do tenant organizing, you might incorporate your activities into a housing advocacy group, for instance. Child nutritional services might be integrated into a community health program.

Similar missions should be similar in other ways also. The organization you choose should have values and a philosophical view of its mission that are very like yours. If your organization is participatory and aimed at participant empowerment, you should seek out others who approach their work in comparable ways.

If you truly want your work to continue, it has to continue in the way you've done it, and according to the value system on which it's based. You may not find the missionary zeal that your original group had, but, with any luck, you can find an organization that's committed to the principles you've adopted. Participants and issues should be treated in the same way you've treated them. If your work has been a means to a larger end - economic or social justice, the personal development of all concerned, etc. - then try to find an organization that sees the work in the same way. Otherwise, you'll be disappointed at what your organization becomes, and only the skeleton of your work will really continue.

Finally, a similar organization will have a commitment to the same target population as yours. If it does, you can be fairly sure that that population won't be slighted by the new organization.

Look for an organization you know and trust. Try to find an organization you've worked with well, whose management and leadership style is similar to that of your organization, and whose attitude toward the target population and the community matches yours.

Look for an organization that's competent.You don't want to hand your work over to someone who won't do it well, so you want an organization that does its work effectively and thoroughly, and that has a good reputation among colleagues and the community. Competence also means good fiscal and other management, and the ability to hire and keep good people on staff. Not only does the work have to be done well, it has to be supported well for an organization to be truly competent.

Look for an organization with the resources to sustain your work. Proper resources encompass several areas:

• It should be well funded for the work it already does, and have the potential to bring in funding for your work as well.
• It should have the cash flow to sustain your operation.
• It should be well-connected to funders - so that its proposals will be considered seriously - and to the community, so that it gets community support for what it wants to do.
• Its staff should have decent pay and good benefits, so that they'll stay with the organization.
• It should have adequate space both for its current operations and for yours.
• It should either have staff who are trained to do the work of your organization, or should be financially able to hire your staff or others to do it.
• In most cases, it should have a 501(c)(3) non-profit certification from the IRS.

Look for an organization that will benefit from taking on your operation. Not only is it reasonable that the organization should get some benefit from your operation, but it's also much more likely that it will take your work seriously and do it well if there's some gain for it as a result. Some ways in which incorporating your services or activities might benefit another organization include:

• It might complement what they already do, and fit in with the services and activities they currently offer. If, for instance, you offer job placement services, they might fit neatly into a job training or adult literacy program. Information on and support for smoking cessation would dovetail nicely with substance use treatment services.
• It could increase their standing or credibility in the community. If you've built up a good reputation, that will carry over to an organization that takes over what you do.
• It might allow them to work with a population they've been trying to reach, such as a language minority community that you're already serving.
• Your operation could allow them to offer more services to a population they already serve, if your target populations are similar.
• Taking over new services might give them access to new sources of funding they haven't been able to tap before.
• Your target population or activities might allow them to expand operations into another community or neighborhood.
• Your staff, or particular members of it, might be good additions to theirs.
• Working in your area will give them access to a new realm of expertise.
• Absorbing your operation might make them more of a full-service organization.

Look for an organization that actively wants to do the work you've been doing, and is committed to maintaining and improving it. In many ways, this goes back to the first suggestion, about looking for an organization with a similar mission. If you can find an organization that really cares about the work you do, and considers it not only important, but absolutely necessary, it's likely that that organization will do its best to make sure that the work goes on, and is done well.

How to negotiate rolling your operations into another organization or initiative?

Most of what follows is based on an ideal: that everyone, from the Board of Directors to participants in services, should have a voice in the fate of the organization. In the real world, this seldom happens: decisions about such things as joining another organization are usually made by executive directors and Board chairs. The fact that most of the people most directly affected by the change are left out of the decision, however, doesn't make that either right or logical. We advocate the inclusion of everyone involved in this type of decision for two reasons: first, because it's only fair to ask people to be involved in decisions that profoundly affect their lives; and second, because that general involvement makes for better decisions.

Once you've had some internal discussions, decided to incorporate into another organization, found the right organization, and made a joint decision to go ahead with the switchover, you're still nowhere near done with the process. The next step is to negotiate with the other organization about what exactly will happen as a result of the change, and about how and what they will continue.

Staff (including volunteers), Board members, and - for most grass roots and community -based organizations - participants as well should be part of the discussion about and planning for this move. Coming up with what you want, what you have to offer, negotiable and non-negotiable points, should be a joint effort. Everyone with an interest should be able to voice her priorities, fears, and positions. The final position of your organization shouldn't be the product of one person, or of just the Board and director, but should take into account the needs and thoughts of all concerned. The same should be true in the other organization as well - in fact, that might be another criterion for selecting that organization.

The points below don't represent an exhaustive or ideal list. Many are unnecessary or inappropriate for many organizations in this position. They're just meant to give you some ideas about the kinds of issues you might consider in this situation.

Decide on negotiating points. What are the things you care about, and want to ask the other organization to do or to pay attention to? Some possibilities:

• Maintaining the name of your organization in some way. It could become the name of the program within the new organization, for instance, or could even be joined with the name of the new organization.
• Maintaining all or some of your present staff as part of the new organization. You could ask that they keep their present jobs, that they be given new jobs in the organization, and/or that they receive certain levels of salary, benefits, staff development, etc.
• Granting status to your former staff and program similar to those in equivalent positions in the organization. The person who directs your services should be in the same position in the organization as other program directors, for instance.
• Maintaining the current level of service to the target population. You may want to spell out what that means, so there's no misinterpreting "current level of service " (a parenting group, consisting of ten one-hour, twice-a-week sessions using the attached curriculum, running eight times a year, with room for 15 participants in each group). You might also stipulate that recruitment should be continued at current levels, and that the new organization should use its media contacts to advertise this program at least as much as it does its others.
• Maintaining the way services are delivered: methods, times available, the way participants and their records are treated, intake procedures, etc.
• Sustaining the effort for at least a specified period of time - one year, five years, the life of the organization.
• Paying any outstanding bills or debts of your organization, up to an agreed-upon amount. (The other organization would have to be crazy to simply agree to pay whatever 's outstanding, without a limit.)
• Maintaining service to the same target population(s). If you provide both English -language and English-as-a-Second-or-Other-Language (ESOL) literacy services, then the new organization would be obligated to continue those, and not to cut off either the English-speaking or the language minority population.
• Expanding services to a certain level, either by increasing the number of people who can be served, or by adding services to what's already available.
• Providing support services - child care, transportation, etc. - to participants.
• Maintaining space specifically devoted to the services or activities that you 're handing over.
• Providing specific equipment or materials - a copier, computers, etc.
• Incorporating a certain number of your Board member's into the organization's Board for a specified minimum period of time (two or three years, perhaps).
• Attaining and/or maintaining a particular Board composition (a specific number of participant members, e.g., or members of particular segments of the community).
• Keeping the same phone number, website, and/or phone book listing.
• Allowing former staff and participants of your organization access to particular services - a library, for instance - or to their own records.
• Anything else that's important to you. This might include the posting of a particular logo, continuing to take care of the program cat... whatever is important to you to keep or keep going.

Depending upon your relationship with the other organization, many of these points can actually be worked out long before an agreement is drafted. Staffs of the two organizations could jointly develop ways to integrate, for instance. The staff of the other organization might meet with your participants to discuss what they like and value about the services they get and how they're treated, what kinds of support they need, and what things they'd like to change. Many transition issues can be resolved long before they actually become issues if the organizations interact in this way.

Once you've developed a list of negotiating points, decide which of them are absolutely necessary, and which you're willing to give up or compromise on. This is a negotiation, after all: it's likely that each organization will have to give on some points to get what it wants on others.

Just how much of a negotiation the process is depends upon the bargaining positions and the needs of the organizations involved. Much of this section is based on the premise that both organizations are eager for the transfer to take place, and that it meets both their needs. In reality, this is often not the case.

If an organization is in imminent danger of folding, and is desperately searching for an entity to take it over, it has far less bargaining room than if it's relatively healthy in every way but financially - still delivering effective services, for instance - and is trying to do what will be best for it in the future. The organization that takes over its function may or may not be enthusiastic about assuming that responsibility, and may or may not believe strongly in what the original organization does.

In the worst case - an immediate need for a takeover by a less-than-enthusiastic host - the organization may have to settle for whatever the host is willing to offer. All services may not be continued, for instance. Staff may simply be out in the cold, even as all the organization's assets go to the new host. It's not always fair... or negotiable.

Decide what you can offer. The other organization will also be asking itself what it wants: this should be a mutually beneficial exchange. They may be making sacrifices to see that your work continues, and it's reasonable that they get something more than good feeling. Some possibilities for what you might offer in return:

• Rights to your name and logo.
• Your mailing lists and information about your donors and supporters.
• Your relevant records, logs, participant data, forms you've developed, intake information, etc.
• Anything left in bank accounts, investments, property, or endowments of your organization

There may be some legal issues here if you've had bequests or donations that were tied to certain conditions. The fact that you're organization ceases to exist may change those conditions, and therefore change what happens to that money. You may need a lawyer to make sure that everyone understands the implications and consequences of the change

• Any information about financial dealings and private or public funding organizations, particularly those whose funding is still in force, or whose rules mandate keeping information f.or a set period of time after funding ends (often five years).
• All tax and tax-exempt information.
• Training and instruction in any methods or techniques unique to your organization or expected to be used by the new owner.
• Enough time spent in explaining and demonstrating so that the new organization understands both the nature and the specifics of the services and activities it's assuming before the agreement is finalized, and feels able to undertake them.
• Technical assistance (if your organization's staff isn't taken over by the other organization) for a specified period of time (six months or a year, perhaps).
• Copies of your organization's policies and procedures, personnel manual, or whatever else of that sort you have in writing.
• Good will/public relations: Your director and Board - and staff and participants as well - could publicize the transition at every opportunity, praising the other organization and presenting the change as an opportunity for the target population. You might use press releases, news conferences, public appearances, and other events to publicize and ease the changeover in any way possible... and agree not to criticize the other organization in public if it does some things you disapprove of.
• Anything else that's particularly important to the other organization.

Negotiate. Both of you have already decided what you're willing to give on and what you're not, and you've been discussing this transition for a while now. It shouldn't be too hard to come up with an agreement that satisfies everyone, as long as both of you have been reasonably honest about what you really wanted.

The key to negotiations - and in fact to every step in this process - is honesty. If you've been clear from the beginning about what you were unwilling to change, there will be no surprises for the other organization, and no unpleasant surprises for you. This should be a friendly process, and honesty can go a long way toward assuring that it is.

Once the negotiations are completed, GET IT IN WRITING. If you can afford it, or can get donated services, it's probably best if each organization has a lawyer to help draft the agreement. If not, you can draft your own document (see Tool #1 for an example), but remember that you have to be incredibly specific about the details of the agreement, and about what each organization agrees to do and not to do. Again, you may be able to get a lawyer to look at it pro bono (i.e. as a public service ) and make suggestions, or you may have one on your Board. The agreement won't be final until the document is signed by both parties.

Unless they're also mediators - and there are a number of firms that specialize in this kind of thing - it's probably wise not to involve lawyers in the negotiations themselves: because of the nature of the law, it's easy to turn the negotiations into an adversary proceeding (a contest, in other words, where there are winners and losers), no matter how friendly they started out to be.

The reason for having lawyers involved in drafting the agreement is that agreements, no matter how friendly, can break down if they're not set out clearly in writing. There can be misunderstandings, changes in leadership, changes of heart - any number of things can transpire to alter what you thought was carved in stone. If you have a legal agreement - a contract - you at least have something to hold the other organization to.

It's important to realize, however, that even with a legal agreement, once your organization dissolves, there's no one to hold the host organization to its promises. Once the transfer is made, you have to trust that the host organization will honor its commitment. A written agreement may help to assure that result.

Once a draft agreement has been prepared, you need to get it approved by all concerned in both organizations. There are several steps to this process:

• Give staff, Board, volunteers, and participants a chance to review the agreement, and raise any questions or red flags they have. You may not be able to resolve all difficulties, but at least any problems will be out in the open and can be discussed before anything goes public.
• Renegotiate any points that seem to raise real problems.
• Present the final document to all concerned in both organizations. Again, it may not be totally acceptable to everyone, but if most people are willing to support it, it makes sense to go ahead.

At this point, you're ready to sign the agreement and make it official.

How to manage the transition to another organization?

It's important that the transition be as smooth as possible. The ideal is that services and activities go on as usual, without any noticeable interruption, and that the changeover from one organization to the other create as few problems as possible. There are a number of things both organizations can do to make this happen.

As soon as you have a formal agreement, inform individuals and groups who should know before they read it in the paper. These include:

• All staff, Board members, volunteers, and participants (If you've been following the path laid out in this section, they'll all know already).
• Any members or donors of either organization.
• Community supporters of either organization.
• Other organizations that you collaborate or work with.
• Anyone who helped get the two organizations together or to broker the agreement.

Only after all these folks have heard, notify the media and, through them, the public.

If you're transferring the whole operation, staff and all, you need to work with the staffs of both organizations to develop new policies and procedures, and generally make it possible for the staff of your organization to become integrated into that of the other. Some specifics you might pay attention to:

• Everyone should work out and be comfortable with the details before the contract is signed.
• Make sure that lines of supervision and support are clear and make sense.
• Resolve any space issues as fairly as possible, so that no one feels forced out or unwelcome.
• Everyone should understand all the logistics of the new situation: when and how they get paid, benefits, who gets to use the copier, etc.

The whole point here is for everyone from both organizations to feel comfortable in the new situation, and for your staff to feel part of the other organization as quickly as possible.

It's important that participants feel comfortable with the new situation as well. It may be that they don't really feel the change, depending upon how much of the operation is transferred. If there are changes for them, make sure they understand them beforehand, and have support in adjusting to them.

If there are changes of any consequence - a change in the staff members with whom they work, a change of space - some participants will leave. This is inevitable, no matter how hard you work to prevent it. The goal is to keep this exodus to a minimum, and to convince most participants that the changes won't affect what they get from engaging in the service.

If you're transferring only some or all of the services or activities of your organization, but not the staff, the emphasis in transition should be on participants and the target population. They need to understand exactly what the changes are, and how things will change for them.

On a practical level, they need to know where to go, if that has changed, and whom they'll be working with. They need to meet the staff and administration of the new organization, and learn about its other services, some of which they may be eligible for.

On a more emotional level, participants and the target population need to be reassured that the character and quality of the services haven't changed, and that they'll continue to be treated with respect and personal attention. If they can be convinced of that, very few will leave, and your work can continue as before.

At the same time, the staff taking over the services needs to work with your organization and its participants to understand how things have operated before, and to work out together whether and how that will change.

In the ideal world, nearly all of this will have been done long before as part of the pre-negotiation process. The consultation within and between organizations described above, if it's done well, will involve everyone concerned, and will discuss and work out most of these issues before an agreement is ever negotiated, or at least in the negotiation process. If the organizations have done the pre-agreement and agreement process well, transition should be relatively easy and painless.

How to let go

Probably the most difficult part of this whole process is letting go of your organization. Even though you've accomplished your purpose by making sure that your work will continue, walking away is hard. Here are some things you can do to mark it and make it easier.

Use the signing of the agreement as both a public relations opportunity and a marker in the life of your organization. Invite the media and the public, and make it as festive an occasion as possible.

•  Make a ceremony of the signing itself, with staffs, Boards, and participants of both organizations present.
• Try to get legislators, local officials, or other public figures to speak or at least be present.
• Take the occasion to thank everyone who's been involved in your organization from the beginning - founders, staff and volunteers, the director, the Board - with recognition, gifts, or whatever seems appropriate. Make sure everyone who needs to be acknowledged is acknowledged, and adequately.
• Formally turn over the organization to its new owners. You may be able to actually present keys, a sign, a charter, etc. to mark the transition.

Less publicly, throw a big party to which you invite anyone who's been involved with the organization from the beginning - current and former staff, Board, volunteers, participants, colleagues, community supporters, members, etc. Some possible highlights:

•  Assemble a scrapbook of photos, news clippings, old memos... anything that has meaning for those who understand or need to know the history of the organization.
• Make an audio- or videotape of stories, comments, etc., getting the voices and /or faces of those who've been important to the organization over time, telling about significant events in its history in which they were involved.
• Have food and drink that's entered into the organizational mythology. If Betty 's blueberry pie or Hsiu's stir-fried shrimp accompanied famous occasions or simply acquired legendary status on their own, it would be nice if people could sample them for this occasion as well.
• Once again, recognize those who were particularly important to the birth and development of the organization.

Directly or soon after the party, hold a gathering of the core members of the organization, those few to whom it really mattered, to grieve its passing. Even if you set out to have it absorbed by another organization, something important is ending, and you need to acknowledge that.

Do your laughing and crying in this group - each of you will understand how the others are feeling. Talk about what you'll do next. Congratulate yourselves on a job well done, and on keeping the organization's work alive for the future.

Finally, walk away and don't look back. For many people, the experience of being part of a particular organization is so powerful that, even after they've left, they continue to come back to "visit." They can't stay away, and they agonize over decisions that no longer affect them and aren't their concern.

It's far better to distance yourself as much as possible. If you have friends still working in the new situation, see them socially, and don't ask about what's going on at work. Don't "check in": it will make you and everyone else uncomfortable. Value the experience that you've had, the friendships that you've made, the lessons you've learned, and the work that you've done, and turn your attention to the equally important work that you'll do next.

Example: Youth-serving agencies merge to better serve children in need

Two longtime Lawrence, Kansas-based organizations that provide housing and other services to children in need decided to become one entity.

Board members of the two agencies mulled over the decision for a year, and decided to merge in order to make both organizations’ efforts stronger and more sustainable over time. “Both organizations are great in and of themselves in terms of what they offer to families. We are excited about making a difference and really being able to do that in a bigger way,” said the current executive director of the O’Connell Youth Ranch. The merged organizations have long had similar missions, and will now be able to better serve youth with use of the joint resources, and will no longer be competing for grants.

“The staff of both agencies will each combine their unique skill sets to provide the services necessary to serve the needs of the young men and women we seek to serve,” said O’Connell Youth Ranch Board President John Rathbun. “The Lawrence community is blessed to have these two agencies join forces to combine their energy and resources.”

Read more.

What does it mean to incorporate your operations into another organization?

___Another organization absorbs yours as a subsidiary.

___Your organization ceases to exist at all, and its services and activities -- or only some of them -- are taken over by the new organization as part of what it does.

How to decide when it's time to incorporate into another entity.

___An internal discussion, involving some combination of board members, staff, participants, and volunteers, says it's time to make the shift.

___When you knew from the beginning that you would incorporate into another organization, and the agreed-upon time has come.

___When another organization with great resources makes an offer to absorb your services and activities and staff.

___When another organization can offer better services to the target population.

___When you've hit the wall on resources.

How to choose the right organization.

___Look for an organization with a mission, philosophy, and values similar to yours.

___Look for an organization you know and trust.

___Look for an organization that's competent.

___Look for an organization with the resources to sustain your work.

___Look for an organization that will benefit from taking on your operation.

___Look for an organization that actively wants to do the work you've been doing, and is committed to maintaining and improving it.

How to negotiate rolling your operations into another organization or initiative.

___Decide on negotiating points.

___Once you've developed a list of negotiating points, decide which of them are absolutely necessary, and which you're willing to give up or compromise on.

___Decide what you can offer.

___Negotiate.

___Once the negotiations are completed, GET IT IN WRITING.

___Once a draft agreement has been prepared, you need to get it approved by all concerned in both organizations.

How to manage the transition to another organization.

___As soon as you have a formal agreement, inform individuals and groups who should know before they read it in the paper.

___If you're transferring the whole operation, staff and all, you need to work with the staffs of both organizations to develop new policies and procedures, and generally make it possible for the staff of your organization to become integrated into that of the other.

___If you're transferring only some or all of the services or activities of your organization, but not the staff , the emphasis in transition should be on participants and the target population.

How to let go.

___Use the signing of the agreement as both a public relations opportunity and a marker in the life of your organization .

___Throw a big party to which you invite anyone who's been involved with the organization from the beginning - - current and former staff, board, volunteers, participants, colleagues, community supporters, members, etc.

___Directly or soon after the party, hold a gathering of the core members of the organization, those few to whom it really mattered, to grieve its passing.

___Finally, walk away and don't look back.

Tool 1: Sample Agreement

The Pearson Young Leaders Initiative (PYLI) and the Pearson Youth Development Corporation (YDC) enter into the following agreement:

YDC will assume responsibility for all activities and services currently provided by PYLI as of the date of the signing of this agreement by both parties. These activities and services include:

Outreach to Pearson youth ages 14-20 for the purpose of enrolling them in leadership development training. For this purpose, YDC agrees to employ one full-time (37.5 hours/week, 52 weeks/year) outreach worker.

Provision of leadership development training for no fewer than 30 youths ages 14-20 per calendar year. This training will include, but not be limited to, courses (using attached curricula) in problem-solving, conflict resolution and mediation, interpersonal communication, and community education. Each course will be limited to ten (10) participants, and will encompass at least 12 hours of instruction, discussion and practical application. In addition, training will include, for each trainee, a minimum fifteen (15) hour supervised practicum in one of the course areas of the trainee's choice after completion of all coursework. For this purpose, YDC agrees to employ two (2) full-time leadership development specialists.

Employment of youth in the practicum area chosen after the successful completion of the practicum. YDC agrees to pay youth for their work as community educators, in-school peer counselors or mediators, or "social entrepreneurs" at the rate of $7.00 per hour to start, with raises (in 50-cent increments) up to $9.00 per hour.

Provision of group and individual support for youth during the training, practicum, and employment phases of the program. Group support will take the form of at least one one-hour group per week for each participant, led initially by a leadership development specialist, and, later, by the youth themselves, with the leadership development specialist becoming a participant. Individual support will take place as needed, and may extend to individual psychotherapy, to be provided by licensed YDC staff. In addition, each youth engaged in employment will have access to at least two hours per month of regular supervision by a youth development specialist or other appropriate YDC staff.

YDC agrees to continue to fulfill the conditions for funding these activities with PYLI's current funders, including the Dept. Of Youth Services, the Miller Foundation, and the Pearson Youth Trust. YDC also agrees to continue to seek funding for PYLI programs from these and other potential funders, and to expand these programs to include more youth as more funding becomes available.

YDC agrees to employ as outreach worker and youth development specialists the current PYLI staff members in those positions. They will receive the same compensation and benefits as YDC employees in, respectively, outreach and education positions with similar seniority.

YDC agrees that four Board members of PYLI's choosing will join the YDC Board of Directors, each to serve indefinitely. They will be added to the current number of YDC Board members (12), but the Board will drop back to 12 through attrition.

PYLI agrees to transfer permanently to YDC the use of its name, logo, and any other identifying symbols, literature, etc. YDC agrees to continue to use the PYLI name as the identifier for the PYLI program.

PYLI agrees to transfer to YDC all monetary and capital assets in its name, including cash in bank accounts, outstanding receivables, endowment and interest income, copiers, computers, furniture, and any other assets in its possession at the time of the signing of this agreement with the exception of one laptop computer, which will revert to its purchaser, PYLI's current director.

PYLI agrees to transfer to YDC all mailing lists, and lists of current and potential donors and community supporters, both on paper and in data base files, as well as any notes and contact information pertaining to them.

PYLI, in the person of its current director, agrees to provide, if necessary, technical assistance to YDC in the operation and maintenance of the PYLI program for a period of up to six months from the signing of this agreement. The same person will also provide, within that same time period, introductions to individuals in the funding organizations named above and to community supporters and key members of the target population.

PYLI agrees to transfer to YDC all participant records, financial records, and any other records or information necessary to the operation of the PYLI program or to fiscal responsibility for it.

With the signing of this agreement, PYLI will cease to exist as an entity, and its functions and assets, as described herein, will be assumed by YDC.

For Pearson Young Leaders Initiative (PYLI)

Printed Name_____________________________

Title____________________________________

Signature_____________________________________

Date_______________________________________

For Pearson Youth Development Corporation (YDC)

Printed Name___________________________________

Title__________________________________________

Signature__________________________________________

Date___________________________________________

It's probably a thought that has occurred to every person who has ever run a not-for-profit organization. Maybe you have it when you drive by the new 17-story building that houses the local headquarters of an international coffee company. Or it comes to mind when you watch another high-budget soda pop commercial. Or maybe you have it every time you're passed by a car that's worth more than your organization's annual budget.

Whenever it happens and however you phrase it, the idea is basically the same: there's a lot of money in the business world. If our organization could just get our hands on a tiny fraction of it--oh, the places we'd go! The things we could do! How could we possibly get some of that cash?

The good news is, maybe it is possible to obtain some of those resources. Because--as you know--there is lot of money in the business world. And donations, or partnerships with the business world, occur every day, in many ways, in many organizations not so different from your own.

That's what this section is all about. On the next few screens, we'll look at corporate giving as a whole. We'll talk about what it is, and all of the different ways it happens. Then, we'll move on to what motivates companies to help not-for-profit organizations, and when it might (and might not!) make sense for you to try and tap into corporate resources. Finally, the meat of this section will be taken up with the nuts and bolts of how your group can get hold of corporate resources.

One note, before we begin: the focus of this section is geared towards obtaining money and other resources from large national (or international) corporations. That's not to say that you should ignore smaller, local businesses. On the contrary, that's a great place to go for help. However, it tends to be a bit easier than getting money from larger corporations. Many of the ideas in this section can be simplified or used "as is" to get local help as well. By focusing on the more difficult task--obtaining help from larger corporations--this section aims to put you in a position to obtain resources from any company, small or large.

Ready? Then let's go! The for-profit world awaits!

What is corporate giving?

Simply put, corporate giving is any kind of support for not-for-profit organizations or causes that comes from members of the for-profit world. While most people tend to think of corporate giving as cash-money, the truth is, it can occur in a lot of different ways.

You might think of corporate giving as anything you obtain from a business person (in her professional capacity) or an organization that you would have had to pay for if they hadn't offered it.

With this in mind, expand your ideas on corporate giving to include all of the following:

• Cash--money in the bank, dead presidents, the green stuff. What people most often think of when they think of corporate help.
• Executives-on-loan--for example, a local accounting firm might offer one of its members to help your organization apply for nonprofit status--a tedious process for which most groups need outside help.
• Corporate sponsorship--this is a broader form of corporate giving, which may include a wide variety of resources. You might think of corporate sponsorship as a 'total package' taking care of all (or a great many) of the costs of a special event.

For example, a corporation might sponsor local athletes training for the Olympics, making sure they have everything they need from housing to uniforms to travel expenses. Or, take the example of a United Way golf tournament. These happen all over the country, and are usually sponsored by a local corporation or group of corporations. Companies and individuals pay to enter, and all profits go to the local United Way.

• Employee volunteerism--this form of corporate giving seems to be on the rise. This, too, can take many forms. A corporation can simply suggest to its employees that such and such organization needs assistance, or the employees might decide on their own to volunteer there. Further, the idea of "release-time" is becoming more popular, where organizations allow their employees to volunteer at a local organization in place of some of their regular work hours (for example, one afternoon a week).
• Matching programs--this is another way to get corporations to involve their employees in giving. In such a program, every dollar that employees give to the organization is matched by the corporation itself.
• In-kind contributions--this is when an organization gives you things that they sell or produce that you might need.

For example, the Apple Corporation has a long history of giving computers to schools. On a smaller, more local level, the local office supply company might be willing to give you the paper to print your newsletter (and a local print shop might take on the job for free, or for a discounted rate!)

• Cause-related marketing--this is another form of giving where the corporation agrees to give a certain amount of the profit from each product sold to a specific charity, such as your organization. This can be a good marketing technique for the company. If you were faced with two similar products at similar prices, but knew that the purchase of one would mean a few cents went to a cause you believe in, there probably wouldn't be much of a question as to which one you bought. An added bonus is the marketing it does for your organization. It's yet another way to make sure that your organization's name is out and being talked about in the community.

A similar tactic is to get a group of similar businesses to donate a percentage of profits to a relevant organization or group of organizations. For several years, several booksellers in the Northeast participated in "Buy a Book for Literacy," donating 10% of their profits on a given day (usually the Saturday after Thanksgiving) to three literacy programs. In the same area, "A Piece of the Pie" was a whole week in which many area restaurants and food stores donated a share of their profits to the local food bank. This is a way to get a fair amount of money without having to deal with a major corporation or hit any individual business for a bundle. Some of the bookstores? donations, for instance, were as little as $10 or $20.

So, although we tend to think of corporate giving with dollar signs in our eyes, try putting images of new copiers there instead. Some estimates say that approximately one-third of all corporate giving occurs in forms other than money. The bottom line: If you want to go for the corporate dollar, think about how you are most likely to get it--and how you could use what you might get.

Also, remember that corporate giving, broadly defined, can vary greatly depending on the size of the company offering the donations. That is, it can be the corner bakery donating muffins for your fund-raising bake sale, a new office complex donated by a locally-based multinational corporation, and almost anything in between.

When it does occur on a large-scale, formal level--such as from a multinational corporation--it often occurs in one of two ways: through company-sponsored foundations or corporate giving programs.

Company-sponsored foundations are legally separate from the for-profit company that starts them, but they maintain close ties with the parent company, and their giving usually reflects company interests. Generally, they maintain small endowments and rely on regular contributions from the parent company and/or subsidiaries to support their giving programs. Since they are private foundations, they have to follow appropriate regulations that apply to all private foundations, including filing a yearly Form 990-PF with the IRS.

What's a Form 990-PF?

It's simply the tax return that private foundations are required to file with the IRS. For grant seekers, this form is where you will often turn when researching a foundation. It is especially useful when you are researching a foundation that doesn't issue an annual report or have a website. By going over a corporation's 990-PF, you can learn:

• Basic financial data about the corporation
• A complete list of grants the corporation has made
• Names of the foundation's trustees and officers
• Other foundation information

Grantseekers can obtain these forms in several places:

• Order them from the IRS: write to the Ogden Service Center, PO Box 9941, Mail Stop 6734, Ogden, Utah, 88409. Include the foundation's full name and the city and state in which it is located. (You will be billed for the cost of the copies.)
• State attorney generals may have them for corporations in their states
• Through The Foundation Center -- you can examine the forms for free, at the Center-run libraries, or request copies.

Corporate direct giving programs have much less stringent requirements than company -sponsored foundations.

For example, they are not regulated and required to file with the IRS. Many times, they are used as a supplement by the company to support programs that do not fall under the guidelines of the foundation. These programs frequently include employee matching gifts and in-kind gifts as part of their grantmaking activities.

However, for all of the advantages there are for not-for-profit organizations to try to obtain corporate resources, there is one very important caveat. Unfortunately, corporate giving is not as common as you might think (or as corporations would like you to think!).

The simple fact is, most money, for most not-for-profit organizations, comes from other sources.

Primarily, these include public or private grants and individual contributions.

What does this mean for you as a not-for-profit organization? It may mean that corporate giving will rank lower on your priority list compared to other forms of asking for money, including grants and individual contributions. Your specific answer will depend in large measure upon the specific corporations and corporate giving policies where you live.

Why do corporations give money to not-for-profit organizations?

If you're going to go after the corporate dollar, it's important to understand why corporations give away money. Of course, you should know this regardless of whether your funder is a major oil company or a Benedictine monastery. Understanding the motives of givers means you can be more competitive in obtaining their resources.

With corporations, however, this becomes a bit simpler. When corporations give away money, the bottom line is almost always the same:

• Corporations give away money in order to make money.
• If you've decided to try and obtain corporate aid, this idea should remain firmly implanted in the forefront of your brain.
• Of course, money making as a result of corporate philanthropy comes about in a round-about way.

Corporations will give away money in order to:

• Enhance their corporate image
• Improve the community in which the corporation is located, to attract and keep a strong work force
• Support education and research that will lead to a better prepared work force, or new technology that they may be able to use (e.g., grants to universities)

... All of which, in the end, leads (corporations hope) to increased sales and more money.

We're not saying there aren't good-hearted people in the business world. Ideas of helping others and giving something back to the community do exist within many corporations and are ideals held by many executives. But most of the time, these motivations take a back seat to company profitability and survival. To be competitive, before you start trying to attract resources, you should ask yourself how your request can help the company achieve its goals.

When should you try to tap into corporate resources?

It's more likely that your search for corporate funding will be successful if your organization meets some or all of the following criteria.

You are one of the types of organizations to whom corporations generally give money. In her book Fundraising for Social Change, Kim Klein explains that research has consistently shown that when large corporations give away money, they usually give it to groups who fall into one of the following categories:

• Organizations that improve the community where the corporation's employees live, such as local symphonies, parks, museums, and libraries.
• Organizations that provide volunteer opportunities for employees, or to which employees make donations. As we noted above, sometimes corporate giving comes in the form of matching employee donations.
• Groups that help their employees be more productive by addressing problems employees have, such as alcohol and drug abuse or domestic violence.
• Research efforts that will help the company invent products or market existing products.

For example, some university departments get a lot of their research funding from corporations.

• Educational programs to ensure that that company will have a well-trained workforce in the future. For example, they might help literacy programs, support innovative schools, or offer scholarships.

The corporation has a history of donating to organizations or causes similar to your own, or they have given money to your organization in the past. Many times, organizations will have their own "pet causes"--organizations and issues that they especially like to support. If your organization helps women who are leaving abusive relationships and a local corporation is always promoting its commitment to helping women reach their highest potential, then you might have a great match.

You know someone at the company who might be willing to further your cause from the inside.The importance of having a personal connection with someone in the company can't be overstated. People fund people, even more than they do ideas or causes. They want to know that the person running the organization knows what she's doing; that the organization or program has a better-than-average chance of actually succeeding in what it says it's going to do.

Also, if you think about it, it's much harder to say "no" to someone you know; especially when you know that the issue is very important to them. Think about it--if a friend stops by and is trying to raise some money for breast cancer because his mother passed away from the disease, chances are pretty high you'll help out, at least a little bit. It's less likely (though still possible) that you would help a complete stranger in a similar situation.

Now, we're not suggesting that you take advantage of your friends. But an honest, forthright request, with the understanding that "no" is an okay response, and won 't harm your relationship--can open the doors to many resources when you know the right person.

Your organization will directly benefit the area where the company is located or does a great deal of business. This is especially true when you're talking about a very large corporation. It's just good business for the company to improve the community in which it works. Their current employees will be happier, they will be able to attract more, well-qualified employees to the area, and they get the positive press of being a "good corporate neighbor."

What does this mean for a local not-for-profit? Well, if you look at a huge corporation and think, "Gee--they have tons of money! Let's grab some!" chances of success are much greater if you're saying, "Gee--they have tons of money down the street!" That 's when it's time to go for the gold.

It makes most sense for your organization. Sometimes, when you've checked out all the possibilities, an attempt to get corporate funding looks like it will be easier and/or more cost-effective than attempts to tap into other funding sources. This might happen for a lot of reasons. Maybe you have an MBA-turned-not-for-profit -manager on your staff, who really understands the corporate world and has a lot of connections there. Maybe your local fund-raising drives just don't seem to cut the mustard. Or maybe you've become aware of a request for proposals (RFP) from a corporation that you know you would be very competitive for, and you could probably just modify an old grant proposal to apply. But if something seems to make sense to your organization--even if you don't meet any of the other points we list above-- then trust your gut and go for it. If you're successful, the payoff will be worth it.

When shouldn't you try to tap into corporate resources?

On the other hand, sometimes it really doesn't make any sense for your organization to apply for corporate resources. Think twice, and then think again, about taking the time to apply for corporate resources when any of the following criteria apply:

• Your work is very controversial. Remember--corporations give away money in large part to improve the community, and to gather goodwill. The latter is less likely to happen if they support you in a controversial project, such as giving condoms to teenagers or clean needles to drug addicts.
• You don't wish to appear to endorse a particular product or company. The fact is, if you accept money or other resources from a company, you are essentially saying, "this is a great group. We think you should buy their products/services. "

(Of course, some groups may take the tactic that it's better that you should be spending their money on something good, than having it go to something you don't believe in. It's an old debate, and yours certainly isn't the first organization to discuss it.)

For example, your organization might be offered a gift from an organization which you know has a history of racism. Your group may not be actively involved in combating racism--maybe you're more interested in increasing local interest in the arts--but nonetheless, you aren't sure you want to be affiliated with that group in any way at all. And like it or not, you are when you take their money.

Answers here aren't always clear. Maybe your organization is actively involved in trying to break down racial misconceptions and build bridges between different ethnic groups. And the same company above (maybe under a new CEO) offers you financial assistance, in an attempt to rebuild their image. However, there's a lot of history between your organization and the company; and some of it is very, very bad. Do you accept their help?

Maybe, maybe not. But certainly, members of the organization should think hard and discuss the consequences before any decisions are made.

• Corporations in your community are not used to giving donations, or donating to your type of work. Large corporations in particular tend to give their money in very specific ways, focusing only on one or two areas such as education, human rights, or youth development.

If your work is centered around public health, for example, you probably won't want to spend too much time wooing Apple Computers, who generally finance educational projects, and often give money to schools. You'll want to find other, more appropriate, avenues.

• Supporting your work will probably not directly or indirectly generate revenue for the corporation. Again, for most companies, the most important concern is continuing to make a profit. If donating to your organization won't help to do that--at least indirectly--then it's less likely that the company will help your organization out.

An important corollary to this point is a reminder that when you do get resources from corporations, publicize it! Thank the corporation publicly, use their logo on your printed materials--whatever it takes so that the company feels that helping you out is a smart thing to do. Of course, make sure to check with the corporation first and make sure that whatever you want to do is alright with them. It usually will be, but it pays to be careful.

• Your organization's goals for the resources are unclear. When you are not entirely clear why you are asking for money, how much you need, and what you will do with it, that's a good time you to step back and think a bit before you ask for help. In other words, it makes less sense to tap into corporate resources when your request reflects more of a scattershot approach than part of an overall funding strategy.

How do you obtain corporate resources?

So... you're ready to take the plunge and try to get some money from the big boys. How do you go about doing it?

The process can be broken down into two parts, preparation and execution. Although it may be tempting, especially considering all of the diverse demands on your time, don't skimp on the preparation. Time spent to thoroughly research possibilities will pave the way to a smooth execution of your request.

Preparation

• Consider what your organizational needs are. Do you need a bigger or better trained staff? Office equipment? You might break your needs down into two general categories: immediate needs (we really need a new copier; this building could use a coat of paint) and long-term needs (we need a stable, continuing source of funding for our programs; we need to implement ongoing staff training). Another way to think of this is, "If someone could give your organization anything, what would you ask for first? And then what?" Because the truth is, there are organizations out there that could give your group pretty much whatever you might need. The first step to getting it, though, is figuring out what, exactly, it is.
• Research local companies or national companies with a strong presence in your community. Information on local companies can be found from the chamber of commerce, by talking to people around town, and, of course, by requesting information from the company itself.

Researching national companies can be a little more difficult, but usually not much. Many corporations have websites that explain their corporate giving philosophy. The Foundation Center has a directory of corporate grantmakers on the Internet which can be a good place to start. (See Resources). There are also a tremendous number of printed directories, some of which are listed in Resources as well, that can give you an idea of existing foundations? guidelines. Further resource on private company foundations can be found in their 990-PFs, as we discussed above.

When you are doing your research, some of the basic things that you will want to learn about corporations include:

• Who makes a point of giving? That is, which specific corporations have a history of giving, and also what type of corporations generally donate to your cause and similar causes. Start broadly. Even if you have a pretty good idea of who you want to ask, this might be an excellent opportunity to look at other possibilities as well, and see if there isn't another great source of aid out there perfect for your group.
• When the companies have given resources, who have they given it to? Look at both organizations and specific issues that each company has funded. As we stated above, many larger corporations only make donations in one or two areas.

For example, Microsoft has a history of helping out libraries. On the other hand, recent (Spring 1999) grants from the Ben and Jerry's Foundation include a broad range of issues-- everything from environmental aid to improving housing to mobilizing against sweatshops.

• How does the company tend to donate resources? As cash? Executives on loan, or flex time for their employees? Gifts of equipment or services that the company produces?

And, of course, there are other ways companies can give--they can sponsor a little league team; they can take out an ad in the ad book for the school play; they can give you a break on printing; and many etceteras. A little creativity is called for--and it's your job to help corporations be ingenious.

This point is especially important for working with smaller companies, who might want to help, but don't have tremendous resources to do so. For these companies, you may want to consider these more imaginative gifts-in-kind--things you need that would be less of a bite out of their pocket book.

Examples might include a printer from an office supply store, free Internet access from your local provider, a free dinner at a local restaurant to thank your volunteers, or a small clam shop donating the profits from the sale of tartar sauce.

Even with larger companies, however, you'll want to learn how they tend to make their donations, and check to see if the potential donations match up with what your organization really needs.

• Who are the CEOs, VPs, Board members, and other important higher ups in the company? Knowing something about them personally (if that's possible) might give you a better idea of causes they are likely to support or be against.

For example, if the CEO of an organization is a strong fundamentalist Christian, funding for your Planned Parenthood clinic might be out. On the other hand, if you find in your research that her older brother is mildly developmentally disabled, you might have a perfect candidate to approach for funding for your jobs program for that population. While some of this information will be harder to obtain, some basic information on CEOs of larger corporations can be found in the Corporate Yellow Book.

• How much money are the corporations willing to give? You may be looking for $25,000, but the maximum award from a promising foundation is only $10,000. Again, this isn't necessarily a stopping point--it is possible to apply to more than one source at a time--but again, it's something that may figure into your calculations.
• What are the requirements of the corporation for asking (and receiving) assistance? Get a copy of their guidelines, and work from these. Grantmakers in all types of foundations say that one of the most frustrating things they have to deal with is requests from people who have not followed their requirements. Guidelines are often, though not always, in writing and publicly available. They will generally also give you information on eligibility, typical grant sizes, writing formats, special instructions, and sometimes contact people you can call upon for help. This type of information is invaluable; ignore it at your peril.
• What's going on in the local business scene? Another way you can "prepare" is to stay knowledgeable about it.

For example, you might want to read the business section of your local newspaper, or even more specialized local business newspapers or journals. Whose profits are up? Who is hiring new employees, or starting a new plant nearby? Whose stock is splitting, and who looks like they are about to be part of a corporate takeover?

This information can help you. As a rule of thumb, the better a company is doing financially, the more it is likely to expand its corporate giving.

The larger point here under "preparation" is to learn as much as you can about the company and its giving policies before you ask for a meeting or start writing a proposal or letter of inquiry. Solid preparation increases your chances of success, and the time spent usually pays off. It's the same reasoning as learning about prospective employers before applying for a job (or choosing among offers), or, for a prospective student, learning as much as you can about your top college choices.

Execution

Make personal contact with representatives from the corporation.

If you can, you might try to meet with representatives from the corporation to get a better idea of what they want in their proposals, and just more of an overall feel for the company and its giving policies.

If you know someone who works at the company, you already have a foot in the door. Ask them if they might be able to set up a meeting for you with the appropriate person. Failing that, ask a mutual friend of someone who works at the corporation if they might be able to set up a meeting for you. Most people are willing to say to a colleague, "Hey, I've got a friend who is doing some great work. I think it might just be the type of community investment our company wants to make. Would you mind taking a few minutes to hear him out?"

In larger companies and especially, in company-sponsored foundations, there are also often contact people whose job it is to meet with you as a matter of course. They are usually folks who are actually interested in giving money away, and they may be more sympathetic than anyone else you can talk to at the corporation. In addition, they are generally extremely helpful in actually working up a proposal, since it's easier for them if your stuff comes in the form they want.

If you really can't find any connection that you have with the company, then go ahead and call "cold." It's much harder--though not impossible--to get a meeting that way.

And before you go to that meeting, be well prepared. You should thoroughly understand the company's work and its giving policies. And be prepared with thoughtful questions, but -- and this is important -- not thoughtful questions that are answered on page one of their annual report. No one likes to feel that his time is being wasted--and that's the last way you want a potential funder to feel.

When you meet with a representative from the company, you should also be prepared to answer tough questions about your own organization. If you have a "press pack" of informative papers, brochures, etc. about your organization, bring that along to leave with the corporation.

Make your formal request for assistance.

Write your proposal, carefully following the guidelines stated by the corporation. In your proposal, you should be very explicit about the benefits to both the corporation and the community at large.

Writing a grant is a process which can be fairly involved (remember: there are people who make their living doing just that!), and explaining how to do it well is beyond the scope of this Tool Box section. Instead, we suggest you look at Writing a Grant, to get more information on how to do it right.

And, of course, for smaller requests to local companies, you may not need to do this at all. A conversation with someone in the company might be enough to get you what you need.

If appropriate, celebrate!

If you've managed to obtain some much-needed resources, congratulations! Finding the resources you need takes a lot of time, careful consideration, and elbow grease. When you've managed to put these together and get what you need, it's time to pop the champagne and congratulate yourselves on a job well done.

Follow up.

If you did get help from the corporation, thank them-- in person, with a handwritten card, or (better yet) both. Let them know specifically how their contribution has helped your organization ("Because of your generous contribution to the Fed Up with Hunger initiative, an additional 50 children will go to school with full stomachs during the upcoming school year."). Further, make sure that you continue to keep them informed of your organization's work. They might just see another program they would like to fund!

Even if you don't get the money, it's probably still a good idea to express appreciation for their time and consideration, especially if you are dealing with a local company. You may want to have a continuing relationship with them--and sometimes, even if you don't, you will still be encountering them anyway--so keeping up that relationship makes sense.

Also, learn from the rejections. You might ask for an explanation of why the organization didn't support your work, and what they would suggest you do in future proposals. Many people and organizations are happy to explain to you why you weren't funded, and to give you tips on how to be more competitive in the future.

In Summary

Many of us in the not-for-profit world think of the business sector as a huge vault, able to bestow on us unlimited wealth--if only we could crack the code. While the reality of corporate giving is probably somewhat less rosy than that, there are a lot of possibilities for not-for-profits--especially for not-for-profits who have done their homework. Good luck in making the corporate world another important, profitable part of your organization's overall funding plan.

Example 1: The importance of developing relationships

Don Murray is founder, president and CEO of a small agency, only 18 months old, which is in the pre-construction phase of building a 20-acre campus for the care and treatment of abused and neglected children. Don is the only full-time paid employee, and is assisted by his wife and a half-time administrative assistant. In the last year, Don has developed relationships with corporate givers very successfully: donations include furniture, copiers, postage and other supplies, as well as several donations in the six-figure range, and is in the final stages of negotiating a gift of 20 acres of land worth nearly a half million dollars. He is clearly well qualified to contribute to our discussion of corporate giving!

The key to getting a piece of the corporate giving pie is in developing relationships. Although many major and some smaller corporations have adopted policies to "give" so many dollars back to their communities, the hard part is to be on the receiving end of this policy. How do we maximize our opportunities to develop relationships which will increase the number of corporate gifts we receive?

Knowing that corporate America maintains vast resources of man-hours, office equipment, supplies, management expertise, and hard cash, it seems logical to come up with a plan to encourage the transfer of this "stuff" to nonprofit organizations... it feels a lot like Robin Hood, but his tactics probably won't work!

Generosity is a funny thing. In addition to a "warm fuzzy", most people feel better about giving when they get something in return. Public TV uses that idea when they give away premiums with pledged contributions, and it works. What kind of "premium" does corporate America want? Well, the obvious answer is... money! Corporate America wants money, and how do they get it? They conduct more business, engage more clients, sell more widgets, etc. So, if our organizations can assist business in their quest for money, we place ourselves in a good position among other nonprofits looking for donations. How do we scratch corporate backs so they're willing to scratch ours?

My organization developed a Professional Business Networking Group. Each month, 125-140 mid- and top-level business owners and executives meet at a local upscale restaurant at a function which we host. (The first one hosted 30 people.) They pay about $15-20 at the door, and spend two hours "networking" and relaxing. This forum permits me to meet those executives and managers who may be able to support us in some way. I attend each function, along with our volunteer "ambassadors" and board members; we work the crowd, finding out about each person's business. New members fill out our applications, which tell me about their business and how to contact them, as well as personal interests (golf, tennis, etc.).

I typically meet from thirty to fifty new execs at each monthly meeting. Regular members get in for free by bringing two guests with them. Incidentally, this function costs our organization NOTHING... the restaurant is thrilled to host this function for us. They provide two free beverages for each guest as well as a heavy munchie buffet. After the two drinks are consumed, guests dip freely into pockets, and it isn't unusual for the restaurant to pick up eight to ten dinner tables after our functions, which are held on Tuesday or Wednesday, traditionally slow nights for restaurants anyway.

It is important to remember that the point of this function is for the guests to conduct their business networking in a relaxed atmosphere; unless pressed, I do not spend much time talking about our organization. I have info to contact these people later, and assuredly will do so. But, I try to find out as much as possible about their businesses, and try to connect them with people there whom they might wish to meet. For example, I may introduce a corporate CEO or CFO who may be bored in their current position to the President of an executive search firm; or introduce a land developer to a general contractor. You get the point.

This is not the time to pitch your charity, but for your guests to see you as a friendly business associate who is interested in their business and their success. This is crucial... if they see this meeting as a time when they're going to be dunned for money for your charity, they won't come. If they come and make some great contacts for their business, they'll return and bring friends next month.

This was used by permission of Fundraiser Software.

___You know what corporate giving is, and what can be considered corporate giving, including:

• Cash
• Executives-on-loan
• Corporate sponsorship
• Employee volunteerism
• Matching programs
• In-kind contributions
• Cause-related marketing

___You know the difference between a company-sponsored foundation and a corporate direct giving program.

___You understand why corporations give money to not-for-profit organizations:

• Enhance their image
• Improve their community
• Support initiatives that will lead to a better work force or new technology

___You know not to try to tap into corporate resources when:

• • Your work is controversial.
  • You don't wish to appear to endorse any particular product or company.
  • Corporations are not used to donating to your type of work.
  • Revenue for the corporation will not be generated.
  • Your organizational goals are unclear.

Preparation:

___You have considered what your organizational needs are.

___You have researched local and national corporations in your community, specifically for:

• CEOs, VPs, and Board Members
• How much money they are willing to give
• What the requirements for the corporation are
• What the local business scene is like

Execution:

___Personal contact with representatives from the corporation has been made.

___Your formal request for assistance has been made.

___If appropriate, you celebrated!

___Follow ups with the organization have been made.

The Public Arts Forum was finally getting to the point where its board felt that the organization could stand on its own two feet. There were enough subscribers and contributors to the performance series to keep the artists coming (and paid), and the building renovation program seemed to be doing well.

Administration was a different story, however. The part-time Executive Director was overworked, and all the financial work was the province of the Treasurer, a volunteer board member with a full-time job. As a result, there were drawers full of files that no one had gone through in years, contracts got buried or accidentally thrown away, and most of the financial records of the organization existed only on random sheets of paper or on post-it-notes that might or might not make it into a file folder.

The organization clearly needed organization, but it wasn't easy to see where it would come from.  Then the Director got a call from the local university. An undergraduate business program was looking for internships for its students, many of whom were majoring in nonprofit management. Would the Arts Forum be interested?

The Arts Forum was definitely interested. It was able to arrange for two interns, one of whom assumed the task of straightening out the financial records and creating systems to make sure they stayed straightened out. The other worked with the Director to clean out old files, organize and refile what needed to be kept, and take care of much of the business that had been buried in the clutter. In return, the interns gained valuable experience and confidence from working with real-world problems, exposure to all the aspects of running a non-profit organization, and the Arts Forum's undying gratitude.

Sometimes, organizations have needs that can't be met from within. These may be long- or short-term, general or specific. The solution may be to look outside the organization for people who can fill those needs without the organization having to hire them. This section will discuss why and when you might want to take advantage of these services, where such people might be found, and how to go about it.

What do we mean by available personnel resources?

Available personnel resources are people who are already doing, or could do, the job you want done, but who don't work for your organization or initiative. They might come from any number of sources - other organizations or institutions, government, the community, schools - wherever people do, or are interested in, the kind of work you're looking for.

The issue behind the use of available personnel resources is usually money. This chapter, after all, is about sustaining your efforts, and that often comes down to money - to buy materials, to pay rent and utilities, and, most expensive, to pay people to do the work. If you can find interns, for instance, as the Arts Forum in the example did, to do something your organization needs, but doesn't have the financial or other resources for, that's a huge help.

Money isn't always the issue, however. The personnel in question might not work for your organization at all, but simply deliver a service your participants need, or do something else as part of their regular jobs that helps to further your organization's mission.  In that case, it makes sense to use what already exists, rather than trying to reinvent the wheel.

The need for this kind of "borrowing" can vary tremendously. It could involve a time-limited, very specific task (creating a data base of program participants past and present, for instance), or a longer-term programming need (employment counseling in a shelter for battered women). Someone from another organization might come in once a week to offer services to participants in your program, or you might find yourself with a full-time staff member who's paid by someone else. You might need people just to respond to an emergency - a mailing to protest a pending decision that could be disastrous for environmental quality in the community, perhaps. Any of these situations, if the conditions are right and you've laid the groundwork, might be addressed through the use of personnel outside your organization.

Why tap into available personnel resources?

There are a number of reasons why you might want to look for personnel in places other than within your organization. Although the first - and, admittedly, probably the most important - reason is what you'd expect, the others could be tremendously beneficial to your organization over time.

• Economics. The obvious reason to look for available personnel resources is that it's cost-effective. If you can get good services without paying for them, it means not having to cut back in other areas, and still being able to provide or do something extra to advance your mission. That can be a real boost for your organization.
• Extending your reach. Tapping into available personnel resources may allow your organization to provide services or take actions that you never would have been able to otherwise. These kinds of opportunities add to your stature and credibility, make it easier to get funding, and - most important - increase the effect you can have on the issues you're concerned with.

Bridge Over Troubled Waters, a Boston program that works with homeless youth, provides free dental care, using the services of volunteer dentists. This is a prime example of a service the organization couldn't have offered on its own without paying a dentist, which was financially impossible. The use of an existing resource - dentists who were willing to volunteer their time - made it happen.

• Opportunities for collaboration. Working with other organizations, institutions, schools, and even community volunteers around using available personnel resources can lay the groundwork for continued and more far-reaching collaboration.
• Developing community support. The more sectors of the community you draw on, the more people will become familiar with and supportive of the work of your organization, and the more the community will feel ownership of and responsibility for it.
• Providing those who help you with new skills and information. The people who act as available personnel resources for you will gain from their work with your organization, in ways that may help them in their employment, in their personal relationships, or in other areas of their lives.
• New perspectives. Having someone in the organization who's not of it - who doesn't necessarily have to conform to the organizational culture or buy all its precepts - can be refreshing.  Someone who's both inside and outside can often see things, both positive and negative, that aren't apparent to you and others who are steeped in your organization's assumptions. New ideas and positive changes can come from the perspective a person in that position can offer.
• Ideas for more comprehensive programs.The initial cooperation around your use of existing personnel resources can also, as mentioned above, lead to larger collaborations. In some cases, collaboration with one or more other organizations or institutions can generate community-wide programs or interventions that address several aspects of an issue simultaneously, or that address an issue from a number of perspectives. Such overarching efforts are often more successful in having a permanent effect than those that are more limited in both scope and conception.

Many communities try to combat youth violence with stricter enforcement, or with midnight basketball leagues. Consider, in contrast, the possibilities that could be engendered by a community effort that includes the police (enforcement of laws and weapons regulations), street workers (counseling, referrals), health providers (free medical and dental care), the schools and institutions of higher education (imaginative learning programs for those who struggle, coupled with free or vastly reduced college tuition for those who qualify), the media (a media campaign aimed at reducing violence), the faith community and secular youth and recreation organizations (the Y, the city recreation department), neighborhood groups (neighborhood watches)...all part of a community anti-violence coalition with a coordinated plan to create social change in the community.

When should you tap available personnel resources?

Any time is a good time to use the resources available, but there are times when it may be particularly appropriate.

• When money is tight. When it's not just a matter of adding something, but one of keeping your program or initiative going, the use of personnel from outside the organization may be a life-or-death proposition. Even when circumstances aren't quite that serious, the use of potential resources may mean the difference between providing a needed service and failing to do so, or between a great program and one that's merely adequate.
• When you have a specific job that needs to be done, and don't have the capacity to do it within the organization as it exists. Particularly if your organization is focused on providing service, other necessary tasks can often slip between the cracks. Over time, this slippage can come back to haunt you, in the form of funders' demands for reports, the need for accurate and acceptable financial records, or the lack of computer-based program information. Bookkeeping, data entry, and other clerical services are among those that often get left behind, and are also among those easiest to supplement with the use of available personnel resources.

An organization with which the author worked found itself in this situation. Although it had 10 employees working at four widely-scattered sites, it had neither a bookkeeper nor any clerical staff. Eventually, it was able to obtain both through a senior employment program. As funding improved, the two were hired as regular staff members, but the organization could not have waited until that point for their services.

• When you're an initiative that doesn't provide direct service, but it's clear that direct service is needed. Your work may have determined what's needed, but your organization isn't equipped to - and isn't intended to - meet that need. Your job here is not to provide the service, but to find someone who can.  The work may be farmed out to an appropriate organization or institution, to volunteers, or to local government. It needs to be done not by your staff, but by other, existing personnel.
• When funders ask for something you can't deliver alone. You may have to partner or contract with another organization to provide whatever it is you can't, or recruit volunteers to make it happen.
• When you actively want to initiate a collaboration or partnership with another organization. The need to tap into their staff expertise may present a perfect opportunity to work together, and serve to establish the relationship necessary for further collaboration.
• When you need more manpower quickly to accomplish an immediate goal. The election is on the line; the City Council is about to rule on the siting of that heavy metals plant; your organization has to raise $100,000.00 in the next month in order to stay afloat.  You need to mobilize the public, and fast.  Finding the help you need outside your organization may be absolutely necessary in this type of situation.

In a variation on this theme, you may need people to work only briefly on a short-term project that's not an emergency, but simply has to be done. A neighborhood clean-up is a good example, as is poll-watching. These and other one-time tasks can often be accomplished through the use of available personnel resources.

• When existing resources become available, and fit in with the needs and mission of your organization. Like the Arts Forum in the example at the beginning of the section, you may be contacted by the local university about the availability of interns. A retired professional - a CPA or lawyer, perhaps - may call to volunteer her services to your organization.  To play on the words of a Rodgers and Hammerstein song, don't let your golden chances pass you by.

This circumstance can arise when someone approaches you with an idea for an exchange: they'll do something in return for your doing something for them. The "something" involved may be supervision, as with an internship, a trade of services, space in your program for another organization's participants or their family members - almost anything that can benefit both organizations. Even if the initial proposal isn't one you'd favor, you may be able to negotiate something else that works just as well.

Where do you find available personnel resources?

An old recipe for rabbit stew begins, "First, catch your rabbit."  By the same token, before you can take advantage of available personnel resources, you have to determine what and where they are.  So before we begin discussing how to tap into them, let's look at the possibilities. Just where are you likely to find these folks?

Staff of other organizations. There are a number of circumstances under which you may be able to obtain the services of staff from other organizations.

• Loaned. An organization may loan staff to another to accomplish specific purposes, or simply to assist the second organization in its mission. Usually, the lending organization is committed, at least to some extent, to the same population as the borrower, and has some of the same or similar goals.  The loan may grow out of the need of the lender to serve the population that the other organization has access to. Organizations with very specific users - public housing tenants, special education students, women with disabilities, diabetics, etc. - often are in good positions to receive the loan of a staff member from another organization to provide its services to their population.
• Shared. Here, a staff member might be paid jointly by two or more organizations - usually proportional to the amount of time he spends at each - to provide the same service to them or their participants. This makes it possible for organizations that can't afford a full-time staff member for the purpose to nonetheless get at least part of what they need.

Some communities establish human service centers, where several health and human service organizations are headquartered in a single building. Often, receptionists and clerical staff work in a central location, and are available to all these organizations. Each organization pays the center a monthly fee, which covers rent, utilities, incidentals, and the pay of the shared staff.

• Contracted. An organization that receives a grant may contract with another to provide some of the services required.  In that case, the staff member providing the services is usually paid from funds received under the contract.
• Employed in a collaborative or joint program. Collaborating organizations often agree to provide whatever staff is appropriate to carry out the goals of a project. Thus, staff from the two organizations may work together, or staff from one may temporarily work under the auspices of the other.  When a joint grant is involved, the obligations of each organization are usually spelled out under the grant, and may include some sort of joint personnel arrangement.
• Bartered or traded services. Organizations may trade services evenly - an employment counselor, for example, may work with the residents of a battered women's shelter in return for domestic abuse counseling for her organization's participants from shelter staff. Organizations may also barter staff services for other considerations - the use of equipment or space, for instance

Interns. Interns - usually either students in training or beginners in the field trying to gain some experience - work free or for small compensation in return for supervision and/or learning about your issue and what you do and/or filling the practical part of a certification requirement. As a result, they often come with desirable skills and enthusiasm.  Internships are time-limited - usually to a year or less, and sometimes to as little as a few weeks - and can take different forms.

•  Paid internships. Interns, because they are getting experience and supervision in return for their work, usually are paid much less than regular staff doing similar work. (Think of medical interns, recent medical school graduates who do a two-year stint at a hospital, during which they are paid much less and worked much harder than any other physicians.) Thus, they can represent a considerable saving, especially if you have specific, time-limited tasks for them to do. You may pay them yourself, or they may be paid from other sources (educational institutions, government agencies, grants).
• Unpaid internships. These usually arise in conjunction with educational or training programs. Undergraduate and graduate programs in social work, nursing, counseling and clinical psychology, and education, for instance, almost always include an internship as a graduation requirement, as do many for-profit career training schools.  In addition, interns are sometimes available in other fields, ranging from public health to marketing to journalism to engineering. Regardless of the work of your organization, you may occasionally be approached by someone with training in your field who's willing to intern with you for nothing in return for supervision and experience.

There are some potential drawbacks to using interns, depending on what they do within the organization. One is that, because their time with the organization is usually limited, they may develop relationships with participants or start projects that then have to be broken off, or picked up by someone else. The work they do is usually valuable enough so that the trade-off is more than reasonable, but it's worth considering.

Another consideration is that interns, whether you pay them or not, aren't free. They need supervision, not just for their own purposes, but for the purposes of the organization. How much supervision, and what kind, depend on their previous experience and on their personal skills, character, the rules of the intern's home organization, and other factors. In any case, supervision takes staff time away from something else. If the intern is reasonably independent and competent, you'll get a lot more back than you have to give out. If he's unsure of himself and wants constant reassurance and direction, you may find him costing much more than he's worth.

As with anyone who works with you, full-time or otherwise, it's important to negotiate at the beginning what everyone's obligations and expectations are. If either your organization or the intern feels the cost of the internship is too great, or the payback isn't high enough, you can mutually decide not to go forward. If you do agree, each of you will be clear on what you're giving and what you're getting back, and can use that understanding to address disagreements that might arise.

Volunteers. Volunteers may be the largest source of pre-existing personnel. You may recruit them, using advertising, posters, word-of-mouth, or other methods, or they may call or walk in off the street and ask to be of help.

Individual community members form by far the largest group of volunteers. Many have professional expertise in their current work, work only part-time, or are retired from professional or other careers that they're not quite ready to relinquish. Retired teachers often volunteer in schools or in adult literacy programs, for instance.

One woman taught for nearly 40 years, retired, and shortly took a job as a kindergarten aide. She retired from that job after ten years, but came back to volunteer in the kindergarten classroom for another 17 years, until she was well into her 80's. Her professional and volunteer career in the schools spanned three full generations of students, and included the parents, children, and grandchildren of many families.

Other sources of volunteers are schools and colleges that require students to perform a certain number of hours of community service; those same students in periods when they have free time (summer vacation, e.g.); businesses that encourage employees to volunteer in the community; parents, especially as school volunteers or coaches; welfare programs that require a set amount of community service in return for payments; court-mandated programs that impose community service as all or part of the penalty for drunk driving, white-collar crime, and other non-violent offenses; and volunteer organizations such as SCORE (Service Corps of Retired Executives) that match volunteers with organizations that need them.

 Potential volunteers, as is obvious from the above paragraphs, are everywhere. The best way to convince someone to volunteer is to ask her. In surveys, the most frequent response to the question "Why did you volunteer?" is "Somebody asked me."

People who work directly for your organization, but are paid by another source. Some government programs and some businesses will pay people to work for non-profits. Businesses may have "loaned executive" programs, whereby they pay their managers to give as many as ten hours a week of consulting time to non-profit or human service organizations (often in conjunction with local United Ways). Senior employment programs provide and pay elder workers to work for non-profits for up to two years. The workers in question may be skilled or unskilled, but are matched with the organization and the job.

Such government sponsored volunteer programs as VISTA (Volunteers in Service to America) and the Peace Corps pay volunteers a stipend to work, respectively, in communities or agencies with low-income constituencies, and in the developing world. Privately-funded programs such as City Year do similarly in specifically urban settings.

Program participants. Participants in programs and organizations that provide services are often willing - even eager - to give something back to the organization.  Involving them in this way benefits everyone: the organization gains needed services, and the participant gains a sense of ownership of the organization, a feeling of being a valued contributor to the life of the organizational community, and - often - new skills.

Some ways in which the abilities of participants might be tapped:

• Tutoring/mentoring. In many kinds of programs, participants at a higher level can assist those just entering. Job training, literacy, and substance use treatment are only three examples of programs in which participants might contribute in this way.   Asking participants to take on these roles - assuming proper supervision and support from the organization - can benefit all three parties involved: the participant doing the tutoring or mentoring, who learns skills and gains enhanced self-esteem and feelings of competency; the participant being tutored or mentored, who gains skills as well, receives support from someone who knows what it's like to be in her position, and sees the potential results of her participation; and the organization, which is allowed to offer enhanced services.
• Logistical and administrative tasks. Many program participants, in appreciation of the services they receive, are willing - even eager - to give something back to the organization in the form of cleaning services, food preparation, vehicle maintenance, filing, or other necessary tasks that they have the skills to provide.

In one program, for instance, a participant management committee at each site took over cleaning, providing coffee, planning and scheduling events, and even negotiating with the landlord each year when the lease came up for renewal. In another, a group of participants with carpentry experience completely redesigned and rebuilt the interior of the program's facility. They not only provided the labor, but also persuaded local businesses to donate all the necessary materials.

In both these cases, not only did the organization receive valuable services, but the participants gained a true sense of ownership of the space and the program. Their contributions motivated them to commit themselves to getting the most they could out of what they were being offered.

• Board service. Participants can be recruited as board members, bringing a valuable perspective to the oversight and policy discussions of the organization. Their service as board members adds to the organization in at least two other ways: it provides them with enhanced skills - skills that are often valuable in employment and other areas of life - and self-esteem; and it supports the participatory philosophy of most community-based and grass roots organizations.

Participants can - and have, in many organizations - become effective and valuable board members, but many need help in learning how to function in a board environment. Without that help, they often resign fairly quickly, or simply fill out their terms without contributing. Many have little experience in meetings, and don't know the unspoken rules that govern discussion and process. As a result, they may be confused, or may be unwilling to speak up when they have important things to say, for fear of embarrassing themselves. If you're recruiting participants to your board, you should plan for mentoring, training, and supporting them. It's a little extra work, but it can pay big dividends in the long run.

• Fundraising, and other community outreach. Participants can be especially effective in fundraising and public relations. Their personal stories affect listeners much more strongly than statistics or more generalized accounts of the issue at hand, and their testimony about the effectiveness and value of the organization carries far more weight than that of staff or board members.

Other sources. There are at least two obvious sources of outside help when you have a specific, time-limited job to do, or when you need certain well-defined skills. One is temporary workers (i.e., from a temporary worker agency), whom you may only need for a short time. The other is consultants, people who work independently to perform particular tasks. These may range from office cleaning to piano tuning to organizational development. Both these groups need to be paid, of course (although you can sometimes find consultants who will work pro bono, i.e. free, for non-profits), but can be hired to do only work that needs to be done. You don't have to make a long-term commitment to finding salaries for them.

Creative thinking may come up with other existing personnel resources as well.  Some would, in fact, say that everyone in the community is a potential source of help.

How do you tap into available personnel resources?

Now that you know what some potential sources of personnel are, you're ready to try to take advantage of them - or to prepare to do so if you need them in the future. Here are some steps you can take to make it happen.

Start by knowing what's out there. What sources are actually available in your community and circumstances?  There are some things you can do to find out, and to be in a position to act when necessary.

• Network with other organizations. This should be standard practice for your organization in any case Establish relationships not only with health and human service organizations and others that engage in work similar to yours, but with a broad range of other non-profits as well. You never know when an arts organization might be a source of dance therapy or street theater. Join community or issue-oriented coalitions, and make it a point to meet individuals in the community - community opinion leaders, coalition staff members, public officials - who might act as brokers of information and introductions.
• Contact colleges and universities, job training programs and schools, high and vocational schools, etc. to find out about the possibility of interns, even if you don't need them at the time.
• Keep contact with interesting job applicants and other people you come across who have skills you might need.
• Contact volunteer umbrella organizations that operate in your area.
• Find - or, if necessary, conduct - a survey of community resources or assets. Such a survey should turn up numerous potential sources of personnel that you can use.

Discuss possibilities with likely sources before the need arises. 

• Talk with other organizations about ways you can work together, and about what their staffs might be able to do for you and vice-versa.
• Let colleges, agencies, and other sources know you're interested in hosting interns under the right circumstances.
• Discuss with volunteer groups how their volunteers might add to your organization.

These discussions accomplish two purposes: they keep your connections to sources of available personnel resources open; and they may actually suggest ways in which you - and the other party as well - may be able to use those resources.

Remember that, in many of the possibilities described here, your organization is also a source of available personnel resources. You're providing an institution supplying interns, for instance, with free supervision and experience, just as they're providing you with free labor. Seeing the transaction in those terms may make it easier to obtain the use of free personnel resources - you have something to offer in return.

Clarify what you need personnel for. Are you addressing a temporary situation, or a short-term or long-term need? Just how long do you expect the arrangement to last? What exactly do you want done?  What's the outcome you expect? What, if anything, are you willing to offer in return - Money? Staff time? A service?

The ideal arrangement for the use of available personnel resources is one that both parties gain from. Your organization gets something it or its participants need, and the source of the personnel resource is able to accomplish something it wanted to. The second best deal is one where one party gains and there is no cost - in money, labor, trouble, etc. - to the other. An arrangement that is entirely one-sided, or that has no positive results for either party, on the other hand, is likely to create problems, and can threaten your relationship with the other party.

It is helpful if you can offer something on your side, even if it's limited to the possibility for the other party to achieve something related to its mission. It's important for both to feel that they're at the very least furthering their goals through this arrangement.

All of these questions should be answered carefully before you embark on an arrangement with another party. The availability of existing resources doesn't always mean you should take advantage of them. They should fit your needs, and, even more important, they should be consistent with the vision and mission of your organization. Just as it's almost always a mistake to take money that asks you to do something that conflicts with your vision or mission, it's a mistake to take or use services that do the same.

Another twist on this issue concerns the organizations and personalities involved. If your organization is collaborative and concerned with the empowerment of participants, it might not be well served by an arrangement with an organization or individual that is essentially paternalistic and treats participants with little respect. In a less extreme example, if your organization operates within a specific structure and with specific methods, you might think twice about partnering with an organization whose structure and methods are significantly different. Such differences could make it difficult for personnel from either organization to work comfortably with the other.

Find the people you need. This step involves using the knowledge and contacts you've already developed, both to know who might be able to help, and to get the word out about what you need. In addition, you might consider creating a community volunteer bank - a list of willing potential volunteers, with their skills and preferences.

Once you've settled on a potential arrangement, work out the details carefully. Both you and the other party should be absolutely clear on what the arrangement entails, how it works, and what the expectations and obligations are on both sides. Some of the details that should be attended to:

• Who will pay the salary or stipend, if there is one.
• Who the actual employer is (i.e., does the person work for your organization directly, or is she only working with you, and employed by someone else?).
• The details of employment (or volunteering, for that matter): how and how much people are paid, holidays, benefits, work hours and times, weather cancellations, etc.
• Who supervises, and the amount and nature of supervision.
• Professional development.
• Meetings and other requirements.
• The person's place in the organization (in relation to other staff, administrators, etc.)
• The job description and any other expectations for the work.
• Communication between organizations.
• The duration of the arrangement. It could be just for the duration of a contract or a particular situation (e.g., until the vote on the siting of the toxic waste dump), until the completion of a specific project, until the grant runs out, or indefinitely.
• How the person's work and the arrangement will be evaluated.

All of these details call for agreement between the your organization and  the other organization(s) or the individual(s) involved. It's important that there be communication channels among the parties, and that they're used (see no. 6 below). It's also important that, if the arrangement is between or among organizations, that the individuals who will actually do the work also be involved in the discussion of how things will work. If they have control over their situation, they are far more likely to buy into it, and to be concerned with doing the best job possible.

Put it in writing. Once you have worked out the details, draft an agreement, a  contract, a memorandum of understanding - whatever seems to be the appropriate document for the arrangement you have.

As the Tool Box often points out, it is absolutely crucial that all parties to any kind of agreement understand exactly what is expected of everyone, and what the terms of the agreement are. Putting it in writing not only makes this possible, but provides a guide for the work itself.

Putting it in writing is just as important when the arrangement concerns volunteers. Many organizations that employ volunteers ask them to sign a contract. The contract lays out the terms of their volunteer service - how many hours a week or month they agree to give, and for how long; what they'll do; and what they'll get in return, in the form of supervision and support. While such documents aren't legal contracts, they make clear that a volunteer is taking on obligations, and that others depend on him to fulfill them.

Follow up on and maintain the arrangement. If the personnel resource you're tapping is another organization, you should make sure that there's a workable communication structure between you, and a regular schedule for using it. You may need very little oversight, or you may need a great deal, depending on the situation. Regardless, there should be regular contact, if only to check in.

If there's a monitoring and/or evaluation plan, it shouldn't be ignored. Even if this particular use of existing personnel resources is time-limited, you may want to pursue a similar arrangement again, with the present or another partner.

Don't forget to thank both the individual(s) and the organization(s) involved, both verbally and in other ways. Everyone needs to know she's appreciated, and everyone is more likely to be helpful again in the future if they have that need satisfied.

Collaborations, whether with other organizations or with community volunteers, don't maintain themselves. Like any other relationship, they need attention if they're to be successful and fulfilling to both partners. Don't forget that element of tapping available personnel resources, once you've done the rest.

In summary

In looking for ways to sustain your organization or initiative, you may find that there are available sources of personnel who can perform tasks or deliver services without adding to current staff duties or hiring new people. If you can tap into these resources, you may be able to accomplish part of your mission without taxing the rest of your organization.

The general reasons for taking advantage of these resources are financial, but there are others as well. Sharing staff with other organizations or borrowing staff from them, for instance, may open the way to collaboration in other areas, and enhance both partners.Using volunteers engenders community recognition and support. In addition, using available resources in this way improves service and strengthens your reputation in the community.

Not all of these resources are free. You may pay part of a shared staff person's salary, or provide an intern with a stipend, for instance. They are, however, less expensive than having to provide the service through your organization, and allow you to pursue your mission with the resources available in the community.

The major sources of available personnel that you might use are other organizations; interns - usually from schools and training programs, but sometimes self-referred; volunteers; agencies and businesses that provide employees (and pay them) for non-profits; and program participants.  In general, you can find these folks through networking and establishing relationships with organizations, businesses, institutions, and individuals in your community. Broaching the possibility of shared or loaned staff or volunteer possibilities before there's a specific need can lead either to ideas for a partnership, or to the use of existing personnel when a need arises.

Once a partnership arrangement has been entered into, it's important to define it clearly in writing, and to maintain it, even if the personnel arrangement is short-term. There may be other possibilities in the future.

What do we mean by available personnel resources?

___You know that available personnel resources are people who are already doing, or could do, the job you want done, but who don't work for your organization or initiative.

Why tap into available personnel resources?

You tap into available personnel resources:

___To gain cost-effective necessary services for your organization.

___To extend your reach.

___To improve possibilities for collaboration.

___To gain new ideas and new perspectives.

___To get ideas for more comprehensive programs.

When should you tap available personnel resources?

You tap into available personnel resources:

___When money is tight.

___When you have a specific job that needs to be done, and don't have the capacity to do it within the organization as it exists.

___When you're an initiative that doesn't provide direct service, but it's clear that direct service is needed.

___When funders ask for something you can't deliver alone.

___When you actively want to initiate a collaboration or partnership with another organization.

___When you need more manpower quickly to accomplish an immediate goal.

___When existing resources become available, and fit in with the needs and mission of your organization.

Where do you find available personnel resources?

___As loaned, shared, contracted, or traded staff from other organizations.

___As paid or unpaid interns from education or training facilities.

___As volunteers from the community, business, or organizations.

___As people who work directly for your organization, but are paid by another party.

___As participants in your program.

___As temporary workers or consultants.

Obtaining support through successful grants and submitted proposals is important to the financial sustainability of many community organizations. However, we all know competition for grants can be tough. You may consider what types of other resources may be available within the community. This section will give you some guidelines on different types of contributions and in-kind support. Additionally, it will help identify their potential sources, and provide guidance for how to obtain these supports.

What do we mean by contributions and in-kind support?

Contributions are donations of money from individuals, businesses, and other organizations in the community. Much of the funding for many non-profits comes from public funds – i.e., from taxes – and is distributed by some level of government. Public funds are limited, however, and most organizations must look for other sources of funding. Private foundations and United Way campaigns are often a second source of funds, but many smaller organizations (and some larger ones as well) aren’t eligible for these monies. Contributions may help meet the funding needed in order to run their day-to-day operations.

Types of contributions

The idea of contributions sounds simple – it’s money that people, businesses, or groups give your organization. That’s essentially right, but there are a lot of variations. Some contributions are tax-deductible (that means you can subtract the amount of the contribution from the amount of money you pay taxes on, at least in the U.S.) and some are not, depending on the tax status of the receiving organization, what it uses the money for, and whether or not donors get anything in return.

Some organizations encourage donors to make larger donations by allowing them to spread the donations out over a period of time – often a year, but sometimes a longer or shorter period. Contributors may specifically give money to an organization’s endowment, or to a particular fund or a particular activity. They might encourage others to give in memory of a loved one who has died, or in honor of an important occasion – a wedding, an anniversary, a milestone birthday, a retirement.

Organizations may ask for small contributions differently than large ones, and may find creative ways to solicit funds. Major donors, those who give large amounts of money, may be treated differently, for instance, and offered some special recognition for their generosity. Contributors may be offered something – membership, recognition, a monthly organizational newsletter, a small gift donated by a business supporter (coffee mugs are perhaps the most common of these) – in return for their contribution.

Some contributions are paired with a purchase. Tickets to a special performance might cost $50.00 each, $25.00 of which is the ticket cost, and the other $25.00 of which is a contribution to the sponsoring organization. (In that case, the donor can only take a tax deduction for $25.00, the amount of the contribution.) Major donors may get preferred seats at these events, or have dinner with the performers.

Depending on the size and needs of your organization, you may want to think about whether to pursue major donors or not. Community contributions are typically in the $10.00 to $100.00 range, with a few of up to perhaps $500.00. Major donors to large organizations and institutions may give millions, although a major donor for most community-based organizations would probably contribute a few thousand – say, $2,000.00 to $5,000.00. The questions for any small organization are that of how much time and effort it takes to get a donation of that size, and whether it has the resources to invest in what may or may not be a successful effort.

Major donors generally have to be courted. Universities offer them the opportunity to name buildings or whole departments, wine and dine them at the best restaurants, and make them Overseers or Trustees. You probably don’t have the capacity to do any of those things, but you can meet with them, introduce them to your organization and its work, conduct guided tours of facilities and programs, and offer conversation with participants and staff. You might also discuss financial arrangements that can provide the best tax advantages for the donor. (You’ll probably need a lawyer or accountant to help you with this.) If you have the time, energy, and connections for this, it may be worth it. If it will detract from the quality of the organization’s work – unless it holds a promise of a really major donation, one that could advance the organization to another level – it’s probably not worth it.

In-kind support is a way for your group to collect resources other than money. Instead of buying everything with cash, you can look for donations from community members. In-kind resources, or non-cash contributions, might be things you'd otherwise pay for, or they might be things that money just can't buy. When someone volunteers to give you a service, supplies, or free help, you're receiving in-kind support. You can look for in-kind support both from within your organization's members, and from your local community.

Community organizations need resources to put their plans into action. One of these resources is, of course, cash money. But that money may not always be available, and some donors – people, groups, or businesses – may feel more comfortable donating something other than cash. In-kind support should not be seen as a second best to direct monetary donations, but as an equally important part of the resource pool available to your group.

Most likely, your group already receives a lot of in-kind support. Does another organization do your mailings for you? Do you share space with a Chamber of Commerce or other group? Can you use their photocopier? These are all examples of in-kind support, examples that you may or may not be counting as donations to your group.

So seeking in-kind support should be an integral part of your plan for action and sustainability. If your group is going to succeed, you'll want more than just money: you'll want goods, people, and services, too.

Types of in-kind support

Let's take a look at the three basic types of in-kind donations: goods, services, and people.

Goods are just about anything that isn't money - for example, a car, paper, equipment, or furniture. Goods are a vital non-cash resource for any organization. You can find goods everywhere: in homes, businesses, governments, and civic groups. They can be used or surplus, or they can be new products and merchandise. They can also be loaned, or they can be purchased cooperatively with another group.

Goods are a money substitute. Cash and in-kind resources such as goods make up a total resource package. 

Some examples:

• Equipment and furniture, including computers and photocopiers.
• Supplies, including paper, filing folders, and other necessary office supplies.
• Space, including maintenance and utilities.
• Food that people bring to your regular meetings

Services are often grouped with goods as in-kind gifts. Many overlook services because, with few exceptions, services are not tax deductible as a charitable contribution. Some companies deduct the time used in performing a charitable service as a normal business expense. Others consider community service a business function and keep no record of its performance. Yet, services are a major source of support to successful nonprofit groups.

Corporations are the best-known contributors, but the giving of services is undoubtedly a community-wide practice. Small businesses, vendors, colleges, other nonprofits, individual professionals, and tradespeople all have services to offer. Everyone providing services for a fee is probably also providing it free, or at a discount, to some worthy cause. 

Examples of services include:

• Printing
• Website hosting
• Transportation

People are the key to all resources in most service-oriented nonprofit groups. People resources are persons giving their time free of charge, for a small fee, or for payment by a third party on a nonprofit's behalf. Anyone who offers your group technical assistance or consultation, or who provides financial services and bookkeeping, or who volunteers to be a member of your board, is making an in-kind donation to your group.

People resources are not only volunteers. People do volunteer their services, but employers may "loan" their paid employees to work on community efforts.

Because people are everywhere, know everyone and do everything, their resource potential is unlimited. The challenge is to discover how to use the most people, in the best combination, to your organization's greatest advantage. Some possible ways – besides volunteering to help provide services, as they may in an educational or recreational organization, for example – that people can help your operation:

• Clerical help.
• Child care for special events.
• Fundraising.
• Legal, accounting, or other professional services

Examples of in-kind support:

• Having your local high school or town government – if they have a printing department – print your group's invitations to a community-wide meeting.
• Housing your group meetings in a building of the local state college. Having access to the college's photocopiers, and receiving help from them in doing your mailings.
• Having coalition members bring snacks and drinks to a meeting.
• Asking store owners to donate items for use in a fundraising raffle.
• Inviting skilled volunteers, such as carpenters, painters, or a local handyman, to fix up donated street-level office space that your coalition will use.
• Receiving old office furniture from a law firm that’s redecorating its own offices.

Why should you solicit contributions and in-kind support?

To increase your overall resources. The more resources your group has, the more power you have to get things done, and to make your work effective. Cash is, obviously, a major resource, since it gives you access to what you need.  While many groups and individuals can't donate cash or feel uncomfortable about doing so, they’d be happy, if asked, to give supplies, space, or time. Since community groups often need these kinds of resources, this can be a great match. Your group will be closer to meeting its goals when it has the necessary resources to put its plans in motion.

To help build community support for your work. When people or organizations donate money, a computer, or some staff time, their connection to your cause grows stronger. They have more of a stake in seeing you succeed. So it's not only funds, goods, and services you are receiving; you are getting good will in the bargain, and developing new allies, too.

To find other sources of support, sources you might not have known about before. By using supporters’ connections, you might be able to acquire their support as well. In this way, both your in-kind resources and overall community support can grow. Your new supporters may be able to help you later on in ways no one could have anticipated.

To acquire resources that come with no strings attached. You can spend money you get from local contributors in any way you find necessary to support the operation of the organization. Many public and foundation funders limit the amount of their money that organizations can spend on operational costs – administrative salaries, rent, clerical functions, etc. For some organizations, community contributions may be the only way to fund these costs, but unrestricted funds – money you can use for whatever you want – are valuable to any organization, and can give you the freedom to run the best program possible.

To obtain items, equipment, etc., that you might otherwise have no access to. Furniture, copiers, computer updates, and other similar items that you simply wouldn’t be able to afford, and perhaps wouldn’t be allowed to buy with other funds, can sometimes come from community sources. Firms updating their state-of-the-art technology might be getting rid of computers and other equipment that are far more advanced than the older machines you’re using. An accounting firm that needs to impress clients may be discarding furniture that’s both better-looking and in much better condition than the chairs you scrounged from the dump four years ago. If they give them to you, rather than throwing them away, they can take a tax write-off, have the satisfaction of being environmentally responsible by recycling their cast-offs, and provide a community service, all at the same time.

To increase your local match. Many public and foundation funders require that organizations provide matching funds from the community or other sources in order to be eligible. Usually both cash contributions and in-kind donations from the community can be used for this purpose.

The purpose of requiring a match is to show that the organization has community support, and can continue to run its programs, at least to some extent, whether or not the funder continues its grants. Matches can vary from small amounts – 10% of the funder’s grant, perhaps – to as much as 100% (we’ll give you $100.00 if you come up with another $100.00.) If you have more than one grant that requires a match, local contributions can be extremely important, because funds can only be used to match a single grant. The more local cash and in-kind contributions you have, the more other funding you may be eligible for.

When should you solicit contributions and in-kind support?

You're probably already receiving different kinds of in-kind support for your group. When your group is beginning a new project, you may need some new resources. This is the right time to determine exactly what types of support your group needs. Take an inventory – a "resources inventory" – of your group. Then use brainstorming to determine which members of your community might be able to donate some or all of these resources.

Take advantage of situations that you know exist or are coming up.  If there’s a business that’s moving or renovating its space, it may be willing to donate furniture and other goods that it would otherwise throw away. A new business might want to generate good will in the community by providing some in-kind goods or services. The founding of a local chapter of SCORE (Service Corps of Retired Executives) could provide opportunities for free professional services.

Contributions are a different matter. Asking for money donations is sometimes a matter of timing, but opinions differ as to what that means. Many organizations solicit funds from the community during holiday seasons – Christmas in the U.S., but this varies in other countries, depending on the culture – when people are feeling generous. Others feel that, because everyone else asks at holiday time, they’ll be better off waiting till later or starting earlier. Still others run regular campaigns once or twice (or more times) a year.

Some organizations try to time community fundraising campaigns to national awareness days or weeks for their issue. Others may gear them to specific times in the life of their programs – the beginning of training courses, the start of school, flu season, etc..

All of this can be further complicated by restrictions on fundraising activity. Community United Ways, which fund many U.S. non-profits, prohibit organizations receiving their funds from fundraising during the United Way campaign (usually a month or two in the fall), and from individually soliciting businesses that regularly donate to the United Way. Other funders may impose similar restrictions, and you may also be limited by when you have the volunteer and other resources you need to raise funds in the community.

One way to think about community contributions is to determine when you need them the most. Many funders make grants that cover a year, but may only give out the money at certain times (a quarter of it at the beginning of each three-month period, for instance). In addition, other sources of funding – fundraising events, United Way – may only provide money at certain times. Contracts often require proof that organizations have spent money before they can get reimbursed. All these factors can have a huge effect on an organization’s cash flow.

Cash flow – the actual flow of spendable cash through the organization, as opposed to money you’re owed or owe to someone else – can be as important to your finances as the total amount of money in your budget. If you're owed $500.00 by your friend, but he hasn't paid you yet, and you only have $5.00 in the bank, that's a cash flow issue.  You can't pay your bills while your friend owes you money. Your organization may have a big check coming in December, but if it’s still October and you can’t pay the phone bill, that check isn’t much good to you at the moment. Timing your solicitation of community contributions to your cash flow needs can help you get through the times between funding and other payments, and keep your cash flow steady.

How can you solicit contributions?

Asking for money from the community can take a variety of forms. The very first thing you should do is make a plan for soliciting contributions. If you plan well, your request will go much more smoothly, and is more likely to yield the results you hope for.  The elements of a community fundraising plan include:

Recruit the people you need to help with the campaign.  These include those who will make personal appeals to friends and family members, those who’ll furnish names and addresses of potential contributors (see below), and those who can help with logistics – assembling a mailing, data entry, making phone calls, etc.. Make sure you have more than enough people lined up ahead of time (some will drop out, get sick, or otherwise be unavailable when the time comes), and that they know what you want them to do and when.

Make a list.  Most organizations start by compiling a list of current and potential donors. These usually include:

• People who’ve had some direct experience with the organization: current and former participants, volunteers, board members, etc..
• People who have direct contact with the organization: staff and board members of organizations it works with, local officials, officers of firms and banks with which it does business.
• Community members, including businesses and organizations that have given money in the past.
• Businesses that have been helpful or have made in-kind contributions.
• Lists compiled by staff and/or board members, and sometimes volunteers as well. These are people to whom they’d be willing to sign letters or make a personal appeal. Such lists may include family members, business associates, social acquaintances, and friends and neighbors.

These lists are often entered into one of a number of computer databases specifically designed as fundraising tools. They allow you – in addition to recording basic information such as addresses, phone numbers, and e-mail addresses – to keep track of such things as when and how a potential funder was last contacted, by whom, and what the result was. Depending on their features, they may also allow you to identify people in specific ways (former volunteer, physician, particularly interested in maternal/child health) so that you can match your appeal to their interests.

Fundraising software varies from shareware or freeware versions that record only minimal information to expensive and extremely comprehensive packages that do everything but call your cell phone when it’s time to ask a particular donor for more money. It’s important to choose a package within your price range that most closely meets your needs.

Decide what method(s) you’re going to use to solicit contributions Depending on your resources and the kind of message you want to send, there are several possibilities for getting your “ask” out to the community.

• Direct mail. This is probably the most common solicitation method for nonprofits. It involves composing one or more fundraising letters – either a single general letter, or a few different letters targeted either to raising funds for different programs or to appealing to specific types of donors – and mailing them to the people on your list. If staff and board members have submitted names, ask them to include a brief, handwritten personal note on the letters to each of the people they’ve suggested. If you have the capacity, each letter, even if it’s general, should be addressed internally as well as on the envelope to the specific person it’s being sent to (“Dear Dr. Smith,” as opposed to “Dear Friends.” Even a simple software program should allow you to do this.) A large mailing can be sent quite cheaply in the U.S. if you have a bulk mail permit.

Mailings require a certain amount of work. First, obviously, the letter itself has to be written. A fundraising letter has to strike exactly the right tone. The best are upbeat, emphasizing the good work the organization is doing, the great results it gets, and the good things that can happen for participants and the community as a result of the donor’s contribution. Letters should be short (a page or so), and should start with a “grabber” – a personal story or an interesting description or piece of information that will keep people reading. The “ask” should be early in the letter, if not in the first sentence, so that the reader is clear on the purpose, and should be positive – explaining what great things the funds will support – rather than negative – stressing how much trouble the organization will be in if the reader doesn’t contribute. It should also stress the benefits to the donor – satisfaction, the improvement of the community, tax advantages.

The other effort that a direct mailing needs is the actual preparation and mailing of the letters. In addition to the letter, a solicitation may include a brochure, a return envelope, and/or some other piece of mail from the organization (a program schedule, for instance). All of this has to be stuffed into envelopes, and the envelopes have to be addressed – usually with mailing labels or by being printed, but sometimes by hand – and pre-sorted by zip code if they’re being bulk mailed. (Your pre-sorting lowers the postage price even more.) It’s not unusual for a relatively small community-based organization to have a mailing list of 5,000 or more, so stuffing, addressing, and sorting a mailing is a big job.

One time-honored way of getting out a mailing is to hold a stuffing party. Stock your office or a large room in someone’s home with coffee, other drinks, and snacks, and invite staff, volunteers, board members, and participants to set up an assembly line to get it all done. A group of people – the more, the better – working together can get a mailing ready in an afternoon or evening, and have a good time in the process.

Another possibility is finding another group that will benefit by doing your mailing. Adult clubhouse programs, designed to provide meaningful tasks for people who can’t work at typical jobs because of mental illness, often take on mailings. Residential programs for youth criminal offenders can be another source of help. (Adolescents work for food, and are often a great deal faster than adults at these tasks. Kids in residential programs are usually happy for the chance to get out into the community.)

• Phone solicitation. Many organizations, either instead of, or along with, direct mail, use the telephone as a way to reach potential donors. Larger organizations may do the calling themselves, or may hire telemarketing firms to do the calling, but smaller ones usually rely on staff, participants, board members, and volunteers to man the phones. Often, a business or larger nonprofit will let a small organization use its phone system to do the calling. The goal of each call is to obtain a pledge of support in a given amount.

Phone solicitations or phone-a-thons, like mailings, take some preparation and work to complete. Someone needs to write a script, emphasizing the points that need to be made by the caller, and giving those new to the process a guide to what to say and how to say it. (See Tools for a sample phone solicitation script.)

Callers then have to be trained, becoming familiar with the script, and getting a chance to make practice calls. Training should also cover how to handle difficult calls, how to take and record pledges, what information to get from people, whom to pass the phone to or whom to check with if they’re asked questions they can’t answer, etc.

A specific issue concerns people who prefer not to be called. Some consider phone solicitation an invasion of privacy, and can become annoyed, or even angry, at being called, even by an organization that they normally support. You obviously should avoid calling anyone who, according to your records, has asked not to be called. Unfortunately, not everyone who feels that way will necessarily have had the chance to tell you so, and some who did may have slipped through the cracks.

If a caller reaches one of these individuals, how he handles the call may determine whether the person will, or will continue to, support the organization. He should know, therefore, that the appropriate reaction is to apologize sincerely, and promise to make sure that the individual’s name is taken off the calling list. The organization should have a procedure that callers can follow right then and there to make that happen.

Within a day or two after the phone solicitation, the organization will have to follow up on each pledge with a letter, usually complete with a return envelope, reminding the donor of the amount of her pledge and asking her to fulfill it, and thanking her for her support. (The U.S. Internal Revenue Service requires an acknowledgment naming the receiving organization, the amount, and the date of the contribution in order for anyone who donates $250.00 or more to a registered tax-exempt organization to receive a tax deduction. These letters should only be sent after the money is in hand.)

• E-mail solicitation. With the advent of MoveOn.org and other similar organizations, e-mail solicitation has become a common method of asking for support.  It has its drawbacks – many people find it annoying, and e-mails can easily get lost or ignored in an inbox – but it has the distinct advantage of being able to reach a large number of people with a single click of a mouse, and it can also direct people to your website, if you have one, for more information.  It’s probably most effective when it’s carefully targeted – aimed at people who’ve already been supportive, or who at least are familiar with the organization. E-mail fundraising letters should be real letters, not the no-caps, no-grammar, who-cares-how-it’s-spelled e-mails that you might send to your friends. They should be as carefully composed as direct-mail appeals, and carefully arranged on the page as well, with some thought to their appearance on the page, and to their being easily downloaded and read. They should be short, to the point, and simple to respond to
• Personal solicitation. Probably most effective of all, there’s personal, face-to-face solicitation by board members and others connected to the organization. This is so important, especially for attracting major donors – those who regularly contribute large sums – that nonprofit board members are often recruited either because they are able to give large sums of money, or because they have connections to those who can. Board members are often expected to ask their friends to contribute, especially if those friends are used to donating large sums to charitable causes. It’s much harder to say no when your cousin or your business partner tells you that there’s a worthy organization he wants you to support than when you get a letter in the mail.
• Other methods of solicitation.There are other possibilities, generally impersonal, and some only usable by larger organizations. These include advertisements in major newspapers or on radio and TV; telethons or live shows featuring celebrities; charity events (dinners, orchestra performances, concerts, etc., where services are donated and all or most of the admission fees go to the sponsoring nonprofit); and call-ins like those famously conducted by public radio and TV stations for their own fundraising.  Website fundraising that’s not specifically tied to an e-mail campaign can be effective for organizations that attract a lot of traffic to their websites. Organizational newsletters and similar publications that go to a list of supporters and public service announcements are among alternative methods that can be used by smaller organizations.

You might use any one or any combination of these methods. Many organizations, for instance, combine direct mail and phone calls. The calls often increase the amount of direct mail contributions.

Decide on the timing of the solicitation. We’ve already discussed timing your requests to contributions to your cash-flow needs, as well as the considerations of season. Some organizations solicit only once a year, some twice or three times. Others make requests throughout the year. You’ll have to decide what works best for your organization.

One possibility is to think about when the worst times to ask for money are. If the major employer in your community shuts down for vacation in August, that’s going to be a bad time to send out a mailing. If many in the community work seasonally – in construction, at a ski resort – time your requests to when they’re earning money: they may have enough to give at other times, but may not feel they do. Summer is generally a bad time to solicit contributions, because many people take their vacations then, and are saving money to make sure they’ll have enough to both finance their vacation activities and carry them through the period until they go back to work. If you’re a United Way member organization, you can’t send out an appeal during the United Way campaign (usually in October and November.)

The other feature of timing is to set a deadline for completing the preparations for your solicitation, and get it done on time. Among other things, many contributors keep track of their yearly contributions, and expect to donate to specific causes at specific times. If your fundraising appeal is at a regular time, many donors will expect to see it – will be waiting for it, in fact – and that increases the chances that they’ll respond to it.

Get your appeal out. Actually carry out your plans. Draft your letter, assemble your mailing, and cart the pre-sorted mail to the post office (Tip: it helps if you contact the postmaster, or whoever is in charge of bulk mailings, first. She can then tell you when the best time to arrive is, and can help getting everything in order when you get there), send out your e-mail appeal, make your phone calls, etc..

Track the results. There are a number of questions you’ll want to answer as money starts coming in – or, more importantly, doesn’t – from your solicitation.

• What is the flow like? Typically, the flow of contributions peaks in the second or third week after you send out a mailing, levels out for a week or so, and then drops off fairly quickly.  Is that the pattern here? Understanding the pattern of returns will give you some basis for projecting your results well before they’re all in.
• What is the percentage of people contributing? If you sent out a message – whether mail, phone, e-mail, or some other communication – to 5,000 people, how many actually contributed?
• How much did you receive, compared to the cost of the appeal?  No fundraising is free. At the very least, it costs a certain amount in staff salaries. The time spent in recruiting volunteers to help, planning, setting up, etc., can run to many hundreds or thousands of dollars, depending on the size and scope of the campaign. Bulk mail permits have a cost, and a large bulk mailing can run to several hundred dollars, or even more.  The question here is whether the return justified the cost.
• Are contributions from specific individuals increasing, decreasing, or staying the same?  Are you losing the loyalty of your supporters, or are they becoming more committed as time goes on?
• Are there particular parts of the community or particular elements of the population that contribute more generously?
• Is this campaign more, less, or similarly effective compared to campaigns at other times of year?

The answers to these and similar questions will contribute to planning for future successful community fundraising.

Follow up. After all the money has come in or been pledged, you’re not done.

There are several details that still have to be attended to.

• Send out pledge reminders and envelopes. Anyone who pledged over the phone, online, or otherwise should get a letter thanking her for her pledge, reminding her of the amount, telling her how to make out her check, and giving her any other information she might need in order to fulfill her pledge. You might also have a plan for a second reminder after a certain amount of time with no response. (There may be some people who simply don’t honor their pledges, although it will probably be a small number. There’s nothing you can do about that – it’s just part of the normal fundraising world.)
• Thank everyone who sent a contribution. Each contributor – including those who honored their pledges – should get a personally addressed letter (again, even a simple software program should allow you to do this easily) thanking them for their contribution, specifying the amount (for tax purposes), and telling them something important about what they’re supporting. (“Each $20.00 contribution will make it possible for us to feed 10 children for a week.”)
• Make sure to record all the details of every contribution. If you’re using fundraising software, that means entering all new contributors with the appropriate information and comments (the more information, the better; it makes it easier to personalize your next request), and updating all former supporters.  If you’re using paper files, you’ll need to do the same, although it might be more work.
• Clean your files. One touchstone that many fundraisers use is that you keep people in your file for three years with no contribution, whether they were former supporters or new names. After three years, you can assume that they won’t ever contribute, and you can clear them out. You should also clear your files of anyone who you know has died, moved away, or is otherwise no longer available, and correct any changes of vital information – address, phone, last name (marriage), etc. – that you’ve gotten from the current campaign.

Plan the next fundraising appeal. Now that you’ve gathered all the information from request for community contributions, it’s time to start planning your next one. Use everything you’ve learned from this one to make the next one more effective, and to increase the number of your community supporters.

How can you solicit in-kind support?

Non-cash resources can help your community organization just as cash resources can. Here's how to begin your campaign to collect in-kind support:

Before You Begin

During a meeting of your organization, discuss your non-cash resource needs. Think about soliciting in-kind support in order to replace your current money spending. What kinds of things could you ask for rather than pay for?

For example, instead of spending $50 a month faxing things from the copy shop, could you ask an office supply store to donate a used or surplus fax machine? Rather than paying a typist to prepare your newsletter, would the community college in town agree to do your typing?

Planning to Solicit In-Kind Support

Plan how you will approach various members of your community and ask for non-cash resources. Do your members have good contacts with particular businesses, companies, institutions, or individuals? Balance the costs to your organization (how much time and money you will spend) with risks and benefits of the search (potential loss or gain of resources or good will). If your risks are too great, revise your plan to solicit less. Think positively and creatively!  The worst someone can tell you is "No!" Although you might feel scared at first about asking corporations for donations, in some ways, seeking in-kind support is less intimidating than asking for cash. At least some businesses, corporations, or larger organizations are looking for smaller groups to donate to. Why? Often it's a tax write-off, and it shows their involvement and generosity to their host community. And after all, if they are going to be making donations anyway, why not have them be to you?

Take a look at Tool #2 in this section, the in-kind donor prospect profile. Prepare these worksheets before you make your pitch to potential donors, and you'll be better prepared and focused.

Set clear goals for your group's campaign. If you don't know where you're going, you won't be able to congratulate yourselves when you get there! Assign specific people to solicit particular groups, particularly those where they already have contacts. A lot of in-kind support you get will come from local contacts. In other words, the support will come from the relationships you've already established with people in your community. If they know and trust you, they will want to support you. The moral is to take the time to develop and cultivate such relationships, and to make them reciprocal. Everyone will profit in the long run.

While Soliciting

Your group will want to regularly discuss its progress in building resources. If your proposal doesn't work with a particular group, try it with someone else. Keep track of your successes and failures, and measure your progress.

After Soliciting

When you receive an in-kind donation, put a dollar value on it! When that community college typed your newsletter, estimate what it used to cost you when paid a typist to prepare the newsletter. Perhaps he spent 6 hours on the newsletter and charged you $180. When the college agrees to have its secretary prepare the newsletter, you've just made $180 -- by not having to spend it all! Keep a careful accounting of the dollar values of your in-kind solicitations. This will be important for your group when you apply for grants and when you compile your annual financial records. Use Tool #1 at the end of this section, the worksheet for tracking in-kind donations. Make sure one person in your group is responsible for creating these worksheets each month, tabulating the total dollar value of the month's donations, and writing thank you notes to your donors.

Many grants require that your group raise a certain number of matching dollars -- they'll give you $5,000 if you can earn $5,000 on your own. Often you'll be able to count in-kind donations (sometimes called "soft money") as at least part of this sum. Even if your grant applications don't ask for matching dollars, in-kind contributions are an impressive demonstration of community support for your group. When funders see that people in your community are willing to donate services and goods to your group, they know your group has strong local support. You're also showing that your group feels that it owns itself and is ready to manage its own affairs.

Tool #1: Worksheet for tracking in-kind donations

In-Kind Donations for the Month of:  ____________________

Donor	Donation	Dollar Value	Contact Person	Thank You Note Sent?

 

Example of Tool #1: Worksheet for tracking in-kind donations (a blank version of this form appears under the Tools heading for your use):

October 1997 In-Kind Donations

Donor	Donation	Dollar Value	Contact Person	Thank You Note Sent?
Cape Cod Community College	use of photocopier for June mailings	$24.00 (200 copies of 4-page mailing)	Ms. Roberta White	10/13/97 by Peter M.
Sam's Hardware	paint for new office space	$54.00 (3 cans of paint)	Samuel Gold	10/27/97 by Sarah D.
Jamahl Wilson	Computer assistance (upgraded operating system, installed virus protection)	$100.00 (what 2 hours with a paid consultant would have cost	Jamahl Wilson	11/1/97 by Peter M.

Tool #2: In-Kind Donor Prospect Profile

Name of Organization: _______________________________________________________

Name of Project:  __________________________________________________________

Prospect Profile: ___________________________________________________________

Name: ___________________________________________________________________

Business:__________________________________________________________________

Title:  _____________________________   Phone: ________________________________

Relationship to Prospect:__________________________________________________________________

Known

Giving Patterns: ______________________________________________________________

Areas of

Possible Interest: _____________________________________________________________

Suggested

Donation:  __________________________________________________________________

Suggested

Person to Ask: ______________________________________________________

How to solicit in-kind support

Before you begin

___Discuss your non-cash resource needs.

___Think about soliciting in-kind support in order to replace your dollar spending.

Planning to Solicit In-Kind Support

___Plan how you will approach members of your community and ask for non-cash resources.

___Balance how much time and money you will spend with potential loss or gain of resources or good will. If your risks are too great, revise your plan to solicit less.

___Think positively and creatively!

___Complete an in-kind donor prospect profile before you make your pitch to potential donors to be better prepared and focused.

___Set clear goals for your group's campaign.

While Soliciting

___Regularly discuss your progress in building resources

___Keep track of your successes and failures, and measure your progress.

After Soliciting

___When you receive an in-kind donation, put a dollar value on it!

___Make sure one person in your group is responsible for tracking in-kind donations each month and writing thank you notes to your donors.

Before we begin, here's a starting thought to ponder:

"Money is neutral. You can spend your money on something good or something bad. So, a democratic organization should set a goal to make a lot of money because it will choose to spend on something good."

This was said by Joan Flanagan, quoted in interview with Timothy Saasta, in Timothy Saasta, "Grass Roots Fund Raising" (The Grantsmanship Center News, Oct. - Dec., 1977).

Do you agree? Whether or not you do, at some point you might find yourself needing to raise money for your group. Fund-raising can keep you wide-awake at night--or it can be a terrific experience for your group and for your community. We are definitely in favor of the latter. So let's see if we can show you how to make it happen.

What is a fundraiser?

A fundraiser is an event sponsored by a group to raise money for the group and its programs. Fundraisers usually require the group to provide a product, a service, or an event that will allow others to contribute money.

Examples of such fundraisers are Girl Scout cookie sales, car washes, and community carnivals. In each case, the group charges money for a product (cookies), service (car washing) or event (carnival ).

Of course, we must consider that there are fundraisers and Fundraisers. That is, there are the cookie-jar events that raise just enough money to replenish the food pantry, and there are the six-figure-and-up mega-events. Here, we will shelter them under the same section. Even though the underlying spirit id the same, the activities connected to each type of fund-raiser will be somewhat different.

Why should your group have a fundraiser?

To make money

Although there are many different benefits from holding fundraisers, the primary goal of any fundraiser is to make money. And it is possible to make a lot  of money from a fundraiser if you are so motivated, up to a million dollars and more (see the parkland example, below). Your group may not have the need, desire, or resources to raise that much money; but still, it can help to set your sights high.

Our emphasis in this section will be on small to medium-size fundraisers, which are best suited for most grassroots groups, more than on large-scale events or campaigns. But even at that, and to preview some later material in this section, one criterion for your fundraiser might be to make the most money in the least amount of time. Otherwise your group could end up being a full-time community fund-raising group, instead of a youth education group, or health awareness group, or whatever kind of group you really are. Don't put so much energy into your fund-raiser that you don't have time to work on the projects that are truly important to you. The horse always comes before the cart.

Example: The fisherman's festival

A community coalition went all out for its fisherman's festival. For months and months, the group spent huge amounts of time and energy organizing a large, sophisticated event for the community. Although community members loved attending the festival, the coalition hardly made any money at the end. They ended up spending so much to put on the festival that they made very little profit once all the bills were paid. As a community event, the festival was a great success; but as a fundraiser, the festival was a flop. And the festival really gobbled up the members' energy--energy they would rather have spent working on the central issues of the coalition.

But on the other hand, raising money might not be your only intent. Successful fundraisers can do more than just bring in dollars. Some other goals might be:

To attract new members and volunteers

Example: The preventive health care fair

Your group decides to hold a preventive health care exhibit as part of the local county fair. You invite many different prevention groups to participate. When the fair attendees come to buy refreshments and other items at your booth, they find out about the kind of work you're doing, and join your group and add to your membership. Your connections with other prevention groups may be strengthened as well.

To educate the public about your group and its work

Example: The bowl-a-thon

When a battered women's shelter holds its annual bowl-a-thon, the shelter distributes information about its programs at the bowling alley. Everyone who comes to the bowling alley ends up learning about the shelter in the process. The learning needn't stop there; when the local newspaper announces that the bowl-a-thon will soon take place, it might also describe your group's work in the same article.

To show foundations and corporations that you have community support

If people will pay to support your activities, you must be doing something right.

Example: Applying for grants

When you apply for grants from foundations or corporations, successful local fundraising will supply concrete proof that your community stands behind you. Statements such as "Five hundred people came to our pledge walk," or "We raised $25,000 ourselves" are powerful illustrations that your community both cares about your work and will support it with their own money.

To give your group greater financial and programming independence

The less you rely on outside funders, the more you can set your own agenda--and carry it out. If you make your own money, you can tackle the issues that matter to you most, at your own pace, in your own style, and without worrying about anyone looking over your shoulder. These are major advantages.

Example: The education coalition

Your education coalition wants to start a campaign that encourages parents to read to their children. The catch? Your group is funded by an organization devoted to music and theater enrichment programs. If your group wants to take on the reading campaign, your funders may resist you -- for reading is not a funding priority for them. But when you make your own money, you can spend it your way!

When should your group hold a fundraiser?

Fundraisers can take place throughout the year. Is there a best time? Yes, when your group needs money for a specific project, event or program. Or when it is embarking on a particular membership or educational campaign. Of course, you should be anticipating these needs well in advance, so that you will have adequate time to plan your fund -raiser, and so that your program operations do not suffer from lack of cash on hand.

In choosing a specific time, some common sense principles apply: If your fundraiser will be held out of doors, hold it in warmer weather (unless it is a winter-carnival -type event). If you are raising money for band uniforms, make sure the band members are around to help you out. If you are fund-raising to combat a disease, don't compete with other health-related drives that have already been scheduled. And while people are often more generous donors during the Holiday Season, they may also have less time to attend events; here's where you might prefer to raise money through the mail.

Example: A new playground

One town paid for its new playground with a one-time spring garden tour of residents-- most beautiful gardens. The tour was actually planned during the fall, but was held during the blooming season, in May. People bought a ticket and received a map of the garden locations in their town. During the day, residents drove around and visited each other's gardens. The fundraiser was nearly 100% profit, and all of the money went directly to buying playground supplies. (This is also a good example of raising money using the community resources you already have.)

A one-time fundraiser is fine; but if your group comes up with a successful concept, consider making it an annual event. Many groups hold fundraising events for specific projects, and also supplement their year-round budget with an annual fund-raiser; you can, too.

How should you plan and carry out a successful fundraiser?

We recommend you start by viewing the big picture. That means taking a look--or a second look--at your overall organizational goals. Ask yourself "What are we about? What do we really want to accomplish?" If you have a strong sense of organizational identity and purpose, then the financial side of things will more easily fall into place.

When you have seen the big picture, you are ready for the next steps. We'll take them one at a time.

Establish, or clarify, your overall financial goals

What are your financial goals? And how do these tie in to your organizational goals more generally? You may hope to expand to a certain fixed point, or maybe to grow just as much as you can. In either case, your budget, and perhaps also your profitability, will need to increase.

But perhaps you deliberately prefer to stay small, or even to do as much work as you can without raising money at all. This is a defensible choice, which could sometimes be preferable as well. The point here is that it is a choice, based on your particular beliefs and your particular situation. And your choice is an important one, for it will determine how (or if) you go about raising money.

When your goals are established and clarified, and if you decide that you indeed need to raise a certain amount of money, then it's time to start thinking about your actual fund-raising event.

Establish your goals for this fundraiser

To begin with, where does your fundraiser fit in the general scheme of things? Your fundraiser will be part of your financial plan, but probably not the only part. You may want to obtain resources in other ways--through grants, for example, or through in-kind services or donations. So ask yourself: What percent of our total budget should come through fundraisers--And what's a reasonable target for this particular fund-raising event?

Here are two different examples to illustrate the point:

Publishing a newsletter

Some community-minded residents decided to publish a Neighborhood Newsletter in a suburban neighborhood of about 2000 people. They figured they could print 3 to 4 issues a year for under $1000, and deliver them by using volunteers on each street. So $1000 per year was about all they needed. They were able to raise this money simply by putting notices in each issue, asking for donations. That was the extent of their fund-raising; this project did not need to engage in special fund-raising events at all. But contrast this with the next example:

Buying some parkland

In Santa Barbara, California, 69 acres of parkland had been freely open to all residents for many years. But the land was actually private property; now it was being put up for sale. The community thought about buying the parkland, but the asking price was $3.5 million, and the deadline was 10 weeks away. Nevertheless, the residents went to work, in an all-out effort. They used potlucks, benefits, pledge runs, poetry readings, concession stands, kids selling juice at traffic intersections, tables in front of stores, coins from cookie jars, anything and everything they could think of. In 10 weeks, they raised $2.5 million; and with the help of a $1 million county grant, they met their goal. This was big-time, multi-method fund-raising, under the gun. And it was successful; it can be done.

Your own fund-raising goals might lie somewhere in the middle; but it will help you to know fairly precisely what those goals are. They will play a large part in determining what kind of fund-raising you do, and how much and what kind of work it will take to make it successful.

Once you have decided upon your fund-raising goals, here are some other points to bear in mind. Your answers to them will help move your work forward.

• How much seed money, or upfront money, will your group need to prepare for the event? Very often, your group will have to spend money in order to raise money. Where will this money come from: savings, a loan, advance sales, somewhere else?
• What will your total expenses for the fundraiser be? How much money will you need to at least break even? You may want to set a break-even point for your event, as well as to set hoped-for dollar goals.
• Who will handle, and who will record, the money coming in and going out? Do you need a separate bank account for the event? And does your group have a treasurer, or financial officer? (If not, you should designate a specific person to take this job on.)

Choose your fund-raising event

There is no one "perfect" or "foolproof" fundraiser. All right, then what criteria should you use in picking one?

Here's one point of view: Joan Flanagan, a nationally-known fund-raising expert, suggests that in the beginning you want to have an event with high profit and low overhead.? She recommends holding an event that is as close to 100% profit as possible. Selling items that cost you nothing, or next-to-nothing, is one way to maximize your profits. The garden tour example above falls into this category.

Here are just a few popular examples of high-profit fund-raising sales:

Garage sales	Bake sales
Plant sales	Coffees or teas (with speakers)
Used book sales	Raffles (of donated items)
Halloween haunted houses	Movies
Pot luck suppers	Car washes
Sports tournaments	Celebrity auctions or benefits

Ad books (where businesses place ads in a book that contains primarily other ads.

Walks, races, or "marathons," (where runners [or eaters, or dancers...] get pledges.

For exact details on how to hold most of the above events, see Joan Flanagan's The Grass Roots Fundraising Book.

Keep in mind, though, that making money may not be your only fund-raising goal. That is, you will want to choose a fundraiser that fits your own goals, abilities, and interests. And it's best if your fundraiser is also linked to community needs and to your community situation. So here are some other questions you and your group might think about in reaching your decision:

Questions about the community

• What does the community need? How does our project meet that need?
• Who benefits from the project? Who might stand to lose something?
• Will there be opposition to our fund-raising activities? From whom?
• Do we need help from people outside our group?
• Will we fund-raise alone, or in conjunction with other community groups? Which ones?

Questions about you and your group

• Who is available to do the fund-raising? Whom can you call upon?
• How much time do you have? Is there a deadline, or time frame? Do you need to wrap up the fundraiser in a month, or in a couple of months--or at no particular time at all?
• What other resources do you have available? These might include supplies, personal and professional contacts, seed money, and other technical expertise if needed.
• What about the possible non-dollar benefits from the fundraiser. For example:
  • Could this project create new members for our group?
  • Could this project create new leaders for our group?
  • Could this project bring us new partners to work with?
  • Could this project teach us new skills?
  • Will this fundraiser generate good publicity for us?
  • Will this fundraiser challenge us sufficiently?
  • How will the event make us feel about our group?
  • How might it make others feel about us?
• Finally, and crucially, what genuinely interests you and your group? At the minimum, what can you get behind? Better yet, what sounds like fun? This is because if it's fun for you, it's likely to be fun for others who are taking part--and also, vice versa.

This may seem like a long list of questions, and we agree it is. But we also believe that taking the time to go through and answer them will pay off for you in the long run.

Seek out potential supporters

In music, a solo can be breathtakingly beautiful, but fund-raising is not a solo job. You probably want help. You'll probably need it.

There are two kinds of help we have in mind. The first is from people who will help you plan and execute the event itself. As for the planning, fund-raising almost always goes better, and is more fun, when it's a group effort. More ideas can get generated, more work can be shared around, and each group member can bring that many more members into the network.

And as for the executing, you certainly want helpers on the day of the event. If you're doing a car wash, you probably don't want to wash all the cars yourself-- unless you want to get very wet and very tired. More generally, if you ask around, you may find that many people are willing (and sometimes more than willing) to take tickets, sit at a booth, serve up the food, and even clean up afterwards.

The second kind of help is from potential donors. Your own organization's members should probably be close to the top of this list, just as any smart business usually concentrates on its past customers. You probably also want to publicize the event to the broader community, or at least to some parts of it. The key questions: How can you explain your project to potential supporters? What will make them want to help you? These are big topics indeed; but for more details on the nuts and bolts, see especially, Communications to Promote Interest, and Media Advocacy, which focus on media and publicity,Encouraging Involvement in Community Work, on membership, and Social Marketing of Successful Components of the Initiative, which deals with marketing.

Finally, you may want to seek out some big fish--such as possible major donors. Do you know people who might be willing to give a lot of money? Or do you know people who know those people? If so, consider approaching them in advance.

Why should you do that, and how? The sidebar below may give you some hints.

Approaching major donors

Since one purpose of your fundraiser is to efficiently collect the most money possible, think about people who might be major donors to your cause. These donors can provide initial support for your event, perhaps ongoing support as well. You'll need to spend time identifying these people; and you'll need to prepare your sales pitch very carefully; but it might save you time and effort at the end. Think about the difference in time between approaching one person who agrees to donate $500, and selling 500 raffle tickets at $1 each. That's a lot of time, and a lot of tickets!

So brainstorm with your group members about who might give a major donation. Then make an appointment to see that person face to face. (Telephone calls and letters are not as effective as your personal presence, though they can support and add to it.) Before your meeting, practice your presentation with others, so that you are comfortable and confident when you walk in the door.

If you can, talk to these major donors even before you begin your public campaign. You can tell a potential donor about your project, why you contacted them, and why your project is a natural fit for their interests. (Trying to win over unsympathetic people is not a good use of your time here -- that's why you've brainstormed carefully in advance!) Tell the potential donor that you are coming to them now, before the public campaign begins, and ask them to think about making a significant gift, one that demonstrates their leadership and commitment. Have a planned dollar figure in mind, one that aims high but which is in the donor's range. Don't forget to mention how the donor's generosity will be properly recognized.

Accordingly, think in advance that recognition in advance. Will you list your major donors in your promotional materials? Will you create a "wall of honor," with their names inscribed on the building they helped pay for? Asking donors to give money to pay for a specific item might motivate them to give more generously; for example, a summer camp for city children might tell donors that a $500 donation will pay to send a child to camp for 2 weeks. They might even show a photograph of a specific child benefiting from that donation, or arrange for letters from the child to the donor. Use your creativity here!

Organize and plan the event

For planning in general, see Developing a Strategic Plan. To add some specific fund-raising tips:

• As your group plans the event, keep the focus on raising funds. And minimize your expenses in preparation; you can do this by asking for donated supplies and labor.
• At the event, try to do "double work"-that is, you can catch two fish with one net. If you're holding a plant sale, sell buttons and T-shirts promoting your group. Or sell raffle tickets at a potluck dinner. But make sure your sales cover your expenses!
• Don't limit your double work to money-making. Try to keep account of who's attending the event--have a sign-up sheet, or offer a door prize that requires people to sign in. These people are your group's supporters, or at least potential supporters. You can follow up with them later, and encourage them to become active members.
• Make sure you have lots of information about your group to give out--brochures, membership cards, announcements of upcoming events. (Some groups keep a suitcase of materials packed, so they're always ready to spread the word.)
• Document your event for the public! Invite members of the local press to attend, Take photographs. This will give you something concrete to show donors in the future, and also to include in your group's newsletter.
• And keep careful track of all the people who help your group--you'll want to thank them after the fundraiser is completed.

To supplement these tips, here's a checklist: Joan Flanagan suggests the following must-haves for holding your event. Do they make sense to you?

Fund-Raising Event Checklist

Notification of police, or police detail	Insurance
Cash for making change	Cash boxes
Receipt pads	Name tags
Literature on your organization	Sign-in list
Current newsletters or fact sheets	Poster board
Membership cards	Pens
Sale merchandise -- buttons, T-shirts, etc.	Markers
Written notices of your next meeting or event	Tape
First-aid kit	Aspirin
Phone numbers of special contact people	Watch
Errand runner for emergencies and forgotten things	Comfortable shoes
Emergency numbers (police, fire, etc.)
Patience, tact, imagination -- and a good sense of humor!

Review the event after it occurs

• Write prompt thank-you notes to all known donors. This shows your appreciation for their donation, and keeps you in good contact with your supporters.
• Don't forget to do the same for your workers and volunteers.
• Keep relevant information about each donor, in a computer program or card file. This might include name, address, phone number, employment, connection to your group, previous donation contacts made, and donation history. (See Tool # [insert number].)
• Start setting up your recognition devices for major donors, as discussed in Step #4 just above.

Note: Visible recognition need not be limited to the biggest spenders. For example, a group in Kansas wanted to build a community walking track. They asked donors to buy a "piece of the walk"--for $25, they could purchase a 6-foot length of walkway. The group also promised its donors, "You will be acknowledged on a plaque erected at the park."

• Finally, after the fundraiser, talk with your group members about the event and its results. Did you make the amount of money you had intended? Does your group have a better reputation, more leaders, new allies? What else needs to be reviewed? After you've done your review, hopefully it will be time to celebrate, and to take a well-deserved bow.

But make sure you take this important time, to decide what you liked and didn't like about the fundraiser. Next time you'll have the chance to get bigger and better. What would you change for next time?...And when might that next time be?

Example # 1: The International Zucchini Festival

Many people have shared the responsibility for the zucchini festivals in Harrisville, New Hampshire, but the starting idea can be traced to Chick and Pat Colony.

On the following screens, they talk about how it came to be.

"I was wondering myself how we fit it together. One thing that's important is that zucchinis themselves are kind of an agricultural joke around here. I mean, everybody who has a garden in New England has this problem of what to do with these things that grow so fast. Well, my wife Pat and I sort of came up with the idea we thought we should have some celebration of this phenomenon. The humor of it seemed to be a natural, and it seemed to be a nice idea to celebrate the wackiness of it and have a good time. We sort of fantasized about this festival, without ever thinking that it could happen.

Everybody seemed to like the idea. It was never meant to be anything very serious. It grew from a joke to being something that looked like it might actually be possible to do. We never could figure of a reason for it to happen. It had to be a cause, I think; just to do it for the fun of it would be pointless. So it needed a little more focus.

And then the cause arrived. Antioch-New England [a graduate school specializing in counseling and psychotherapy training] moved from Vermont to Harrisville. And while they were here, one of the projects they started was a preschool, a private preschool. Their fund-raising had been a constant problem for them, in that they could never generate much money at any one time. We talked to someone who was quite involved with the school. We said, look, would the school be interested in a major fund event? She said she thought so. I'd say the first meeting was sort of a spiritual meeting, you know--let's talk about the idea, get a lot of laughs.

Right away, most of the issues became apparent. It's easy to say what the jobs are. It was a little more complex to get them assigned and done. We sort of picked people who could be in charge of each different thing, like promotional materials, publicity, liaison with the town. The core organization became called Zucchini Central. Everything was kind of tongue-in-cheek. We were maybe eight, eight to twelve people I would say. We worked independently; there wasn?t much to do, physically. We knew that real involvement was going to come just the week before. What we wanted was to hold everybody back and then really concentrate on the day itself. We actually did do presses releases and things. We didn?t try to overdo it, although the media got kind of excited about it. We were selling T-shirts maybe a month before the festival. I took it to myself to make the buttons. People just did things they wanted to.

We charged people money to get in, but we didn't want people having money all over the place. So we thought it would kind of be adding to the festivity to have play money, and we came up with the idea of using what we called zukes and gadzukes, and I think it did work. They were actually poker chips.

There was a set-up crew that worked a little bit the night before. But seriously, until the thing started, we had no idea what it was going to be like. And it was exciting. Probably three or four thousand people came and went. Lots of people came wearing zucchini jewelry, dressed up as zucchinis, entered contests, everybody sort of took part. We had to sort of forcefully shut it down, about four o'clock.

The wastebasket just accumulated all the money. Nobody had any idea of whether we were making any money or not, although there seemed to be quite a bit floating around. We grossed about nine thousand, I think. And we made about half of that, which was more money than they'd ever made on all their fund-raising things put together in a year. The funny thing for Pat and me was the way the event came off was almost exactly the way we had visualized it. It worked just as well as we hoped it would work. And that was really amazing."

Adapted form Local heroes, by Bill Berkowitz. Used with permission.

Example # 2: Fundraiser planning sheet

Here you'll find a complete fund-raiser planning sheet, filled out for an hypothetical fund-raiser for the zucchini festival so that you can get a feel on how to plan your own event. A ready-to-use, blank form of this sheet can be found in the Tools section.

FundRaiser Planning Sheet

Fundraiser: International Zuccini festival

Set financial goal ? how much money do you want to raise?

About $ 8,000

Set other goals for your group:

Way of using omnipresent zucchinis Bring attention to town Bring awareness to Antioch-New England school Have a good time

Choose the best fundraiser for your community:

Zucchini festival, because zucchinis are all around

Set the date for your event:

May 25th

Outline all the tasks you need to do:

Get permission from city hall Contact media Clean area of the festival Build tents Organize competitions Budget

Who will be responsible for each job?

Chick--competition organizer Diane--city liaison Don--treasurer Clarissa--event organizer Pat--secretary

Brainstorm potential donors and supporters:

Farmers People from the community

 

Example # 3: Designing and Implementing a Fundraiser

The Wichita Art Day of Giving (ArtDOG) is a 24-hour online fundraising event created to rally community support for local arts organizations. This unique one-day fundraiser is a project of the Wichita Community Foundation (WCF). The WCF brings this event to the area with several goals in mind, including:

• To raise awareness of the current needs of arts organizations in the community
• To encourage local arts nonprofits to learn how to use digital tools
• To inspire donors to increase financial support of their favorite local arts organizations

ArtDOG 2014, held on Feb. 28, raised nearly $550,000 for 38 Wichita arts nonprofit organizations.

"There is no question that the community embraced the concept of ArtDOG, and saw the importance of both donating and promoting the arts in Wichita during last year’s campaign,” said WCF President and CEO Shelly Prichard. “WCF is proud to administer this project again, with the goal of raising even more dollars and awareness for the arts. The partnerships secured for ArtDOG 2015 have been a great testament to the value of this project.”

Fifty-three nonprofit arts organizations in Wichita registered to participate in 2015, compared to 38 in 2014. Golden Ticket opportunities are available throughout the day, awarding 12 $1,000 prizes to randomly selected participating organizations. In addition, all 53 organizations are eligible for Bonus Pool dollars, which are awarded based on dollars raised at the conclusion of the giving day. WCF has committed $25,000 from their operating endowment for the Bonus Pool, along with $25,000 from Spirit AeroSystems, as well as gifts from Fidelity Bank, Emprise Bank, Apples &Arrows, Lifeboat Creative, and several individual donors.

The locally-developed online giving platform, ICTArtDOG.org, provided real-time updates of the total raised on April 24 and announce the Golden Ticket recipients, among other features. Those interested in donating to ArtDOG organization(s) online did so from 12:01 a.m. to 11:59 p.m. on April 24. If a donor was interested in giving offline, they were encouraged to contact the organization they wish to donate to directly.

Several events hosted by participating agencies were held that Final Friday. A full list is available on ICTArtDOG.org.

Founded in 1986, the Wichita Community Foundation's mission is to be the catalyst that creates lasting legacies by partnering with people, families, and organizations to devote resources to causes that matter. The Foundation is a public nonprofit organization with nearly 300 charitable funds and agency endowments, representing $69 million.

Tool # 1: Community event organizer

This tool outlines 12 basic steps to follow when selecting, organizing and conducting a community event such as a fund-raiser. Custom-tailor these steps to reflect your own ideas and the special needs of your event.

Community Event Organizer

Step 1: Explore the possibilities

Step 2: Select the event

Step 3: Appoint the event chairperson

Step 4: Establish a committee system

Step 5: Form a steering committee

Step 6: Define committee tasks

Step 7: Itemize the budget

Step 8: Develop a timetable

Step 9: Recruit volunteers

Step 10: Do it!

Step 11: Clean up and give thanks

Step 12: Conduct an evaluation

Tool # 2: Fund-raiser planning sheet

This sheet will help you plan your fund-raiser because it will guide you through the main steps of organizing one. Use this sheet as a basic tool to set your goals, decide which type of fund-raiser fits your needs best, and who can help with it.

Fund-Raiser Planning Sheet

Fund-raiser:

Set financial goal? how much money do you want to raise?

Set other goals for your group:

Choose the best fund-raiser for your community:

Set the date for your event:

Outline all the tasks you need to do:

Who will be responsible for each job?

Brainstorm potential donors and supporters:

 

___You know what a fund-raiser is

___You understand why your group should have a fund-raiser

___You know when your group should hold a fund-raiser

___You know how you should plan and carry out a successful fund-raiser

___You know how to use a Community Event Organizer.

___You explored the possibilities

___You selected the event

___You appointed the event chairperson

___You established a committee system

___You formed a steering committee

___You defined committee tasks

___You itemized the budget

___You developed a timetable

___You recruited volunteers

___You cleaned up after the event and gave thanks

___You conducted an evaluation

It's crunch time at the Healthy Community Center (HCC). Babies, accompanied by their parents, are waiting for their free vaccinations. Two older children are racing around the waiting room, playing "Star Wars" to kill time until they can go in to be tested -- without charge to their families -- for dyslexia as part of a CORE evaluation process. An older man watches as his wife gets her daily free blood pressure check; his turn comes next. In a back office, next door to the no-fee Parenting Skills class, several adolescents attend an Al-A-Teen meeting. Upstairs, free and sliding fee scale individual and group psychotherapy sessions fill every available space.

Very few community members who come to the Center pay full price for the care they get. How can the Center afford to serve all these people? Through third party payments, of course; HCC couldn't survive without them.

What are third party payments?

Chapter 46 of the Tool Box is all about finding ways to keep your organization or initiative going over the long term. One way to accomplish this is by becoming eligible to collect payment for your services from "third parties" -- someone other than either your own organization (through its grants, fundraising, etc.) or the person receiving services.

Under a third party payment arrangement, your organization provides services -- most often medical, rehabilitative, educational, or psychological -- to an individual, and is paid by an insurance company, an Health Maintenance Organization, Medicare or Medicaid, a school system, a state agency, or some other entity that needs or will pay for services for that individual. The rate for these services is often, though not always, pre-set by the payer (or at least negotiated by the payer beforehand), and is usually based on an estimate of a fair and average rate for a particular professional working the amount of time the service normally takes.

What are the advantages of pursuing third party payment?

There are a number of reasons why an organization might benefit from being able to collect payments from third parties for its services.

• An improved ability to provide services: By paying for those who couldn't afford it themselves, third party payments make it possible for an organization to serve low-income people without having to either lose money by using a sliding fee scale and absorbing the difference between what the service costs and what they can pay, or charge them more than they can afford.
• More likelihood that those in need will seek services: If people know their insurance or some other source will pay, they are more likely to seek what they need; so you're more likely to be able to work with those who need your services most. Third party payments give you access to the huge pool of potential participants who will only use services that their insurance will pay for.
• An increase in the organization's control of its finances: If everything is in order beforehand (both your paperwork and whatever bureaucracy is necessary on the other end), you know exactly how much the organization will receive for each unit of service (an hour, a treatment, a test... whatever it is you provide), and you can be assured of receiving that payment. That improves your cash flow and gives you more control of your finances.
• An opportunity to add staff and improve the facility: An opportunity to become an approved provider for third party payment may be an opportunity to improve your organization by adding new, credentialed staff people and by upgrading your facility and procedures.
• Increased credibility: Being a third party provider can increase your credibility with the community and with funders and other organizations.

What are the disadvantages of pursuing third party payment?

Along with the considerable advantages of third party payment go some fairly hefty disadvantages. It's important to balance the two before you make a decision about third party payments for your organization. Is the money worth the extra hassle? Is there a chance that your organization will lose its compass and start doing things contrary to its mission and philosophy? Every organization must answer these kinds of questions and consider the following and other disadvantages as it makes the decision about whether to pursue third party payments.

• Increased record-keeping time: The record-keeping and other requirements of third party funding may consume a huge amount of staff time. Can your organization afford that time, and is it worth the gain?
• Increased bureaucracy: Especially when the third party is a public entity, it may have an enormous bureaucracy to deal with. In general, the larger the bureaucracy, the more complex and difficult the paperwork, the more time it takes to get anything done, and the greater the frustration for your organization.
• An extra administrative layer: Third party payment can add an administrative layer and make life somewhat harder for everyone in the organization.
• The danger of decisions being driven by money rather than mission: There is always the danger that pursuing third party payment will lead the organization to make decisions that are not driven by its philosophy and mission. It is important to remember that the pursuit of money should be driven by the philosophy and mission of the organization, and not the other way around.
• Discrimination against those without coverage: In the same vein, third party payment may drive the organization to offer no services, or only minimal services, to those who can't pay and aren't covered by a third party.

Who is eligible for third party payments?

In order to become eligible to receive third party payments, you have to be a certain type of organization and fulfill certain conditions. These vary to some extent from funder to funder but, in general, they cover four areas: services, staff, facility (i.e., your physical space), and the administration of the organization. There are often other eligibility requirements as well.

Eligible services

Although it may seem obvious, the first step in becoming eligible for third party payment is to be sure you offer services that are covered by third parties.

Among the most common of these are:

• Out-patient or in-patient psychiatry or psychotherapy, including emergency mental health services.
• Medical treatment. Depending on the payer, this may include anything from major surgery to administering medication.
• Preventive health maintenance, such as a weight-loss group or a child nutrition class, may also be funded as medical treatment.
• Psychological, medical, or educational testing or evaluation.

Testing usually involves the use of a recognized test of some sort. A blood test for specific diseases or for other physical conditions (e.g., a lipid profile, which measures cholesterol levels and looks at other fat levels in the blood) is one example of medical testing. Psychological testing often involves either IQ (the Wechsler is probably the most common IQ test) or personality testing. Educational testing may look at reading readiness or at dyslexia or other learning disabilities.

A test in any of these areas, such as a school test, results in a score. Most tests require training to administer and to understand what the score means, but the nature of a test implies that the same score on the same test should always mean approximately the same thing. As a result, the information one gets from a test may be limited. Many medical tests are notorious for yielding false positives -- telling you you're infected with something when you aren't. A score on a psychological test may have a great deal to do with what happened to the person being tested on the way to the office. The results of an educational test may depend on whether a child had breakfast or not.

An evaluation or assessment may be more comprehensive than a single test and may involve more judgement on the part of the person conducting it. In addition to, or instead of, testing, an evaluation may involve interviews with not only the person in question, but also his family or those who work with him. The evaluator may examine his history, try to draw conclusions from his behavior, conduct several test, and eventually come up with a mutually-generated plan for dealing with his issues. Evaluation often demands a different and greater set of skills than testing; and, unlike administering and scoring a particular test, those skills can't always be in a systematic way. The background and experience of the evaluator may be as important as her credentials.

• Substance use treatment.
• Adult day care. This could mean anything from a recreation and socialization program for elders who have problems getting around to a comprehensive Clubhouse program for the adult mentally ill.
• Elder services, such as home health care, housekeeping, Meals on Wheels, etc.
• Day care for children.
• Physical therapy.
• Alternative medicine -- acupuncture, chiropractic, etc.
• Alternative education, which may include services for children with learning or emotional disabilities or difficulties, or educational services for the developmentally disabled.
• Independent living facilities and support for a number of groups, including the mentally ill, retarded adults, adolescents in foster care, etc.\
• Job training and employment placement services.

Staff

An almost universal requirement among third party payers is that the people who actually provide the service -- those who are doing the actual counseling, administering medications, running groups -- be licensed or certified in their fields. The level of credential necessary may vary with the funder, but a credential (and a specific level of education to go with it) is almost always necessary.

Psychiatric or psychological services. Requirements in this area depend upon what services are being offered. In the past 20 or 30 years, for instance, it has become apparent that a great deal of mental illness is, in fact, chemical, and, like high blood pressure or diabetes, can be helped or controlled with drugs. If your organization needs to dispense medication, a funder will ask for a psychiatrist or other MD to write the prescriptions and to supervise the process, although not necessarily to provide psychological treatment.

Most third party payers will only pay for psychological services from a certified, doctoral level (MD, Ph.D., Ed.D., Psy.D.) psychiatrist or psychologist; an LICSW (a Licensed Clinical Social Worker with a Master's of Social Work, or MSW); or a therapist or counselor with lesser credentials, but at least a Master's degree (often an M.Ed.), who is supervised on an agreed-upon schedule by a licensed or certified person. Testing must usually be conducted by someone trained -- and sometimes certified -- in administering and scoring the particular test.

Medical services. Again, requirements depend on what services are being offered. For complex medical services -- all but the simplest surgical procedures, prescribing medication, diagnosis of conditions, and treatment recommendation -- most payers would demand an MD or OD (Doctor of Osteopathy, a degree which, like an MD, requires four years of graduate education and several years of internship and residency). At less complex levels of service, the requirement might be for an RN (Registered Nurse); a Nurse Practitioner or Nurse Midwife (RNs with additional training); a P.A. (Physician 's Assistant); a Licensed Physical Therapist; or an L.P.N. (Licensed Practical Nurse).

Alternative medicine, such as acupuncture or chiropractic, must usually be provided by practitioners licensed or certified in the appropriate fields. Laboratory tests, such as blood tests and the like, usually must be conducted by a Licensed Medical Technician LMT) or a licensed Radiologist or Radiology Technician (for x-rays, CAT Scans, and MRIs).

Educational services. In most cases, educational services require not only certified teachers, but teachers certified in an appropriate field. Third-party funded services for children with learning disabilities, for instance, usually must be provided by someone certified in Special Education. Educational testing must usually be done by either a licensed Psychologist or a by someone certified as a School Psychologist.

Other services. The possibility of third party payment for other services may also depend upon the licensing level of the program supervisor, the certification or licensing of those providing the direct service, and other factors as well. It is absolutely essential to find out beforehand what the staff requirements are for any program for which you are considering pursuing third party funding.

Facility

For many third-party payment situations, you may need to meet certain standards for your physical space. In addition to fulfilling the general legal requirements for whatever you do (having enough exits, working plumbing, etc.), you will probably have to demonstrate one or more of the following:

• Handicapped accessibility and compliance with ADA (Americans with Disabilities Act) requirements. This includes: ways for people with various handicaps to get into (and out of) the building and the rooms where services are delivered, both under normal circumstances and in emergencies; handicapped accessible bathrooms; door pulls and latches that can be operated by people in wheelchairs or without a grip; places where wheelchairs can turn around; TTY or TTD devices for allowing the hearing impaired to use telephones; etc.
• Other physical requirements, such as: the amount of space per person, the number of bathrooms, rooms that will accommodate at least a certain number of people, the location of the building, accessibility to public transportation, etc. Requirements could even extend to such things as air conditioning (offering services to seniors in Florida in July in a building without air conditioning would be an invitation to multiple cases of heat stroke).
• Specific equipment, particularly in medical facilities.
• The cleanliness, appropriateness, privacy, and security of both the building and individual offices and files. An organization receiving third party payments for psychotherapy, for instance, might have to demonstrate that therapy appointments take place in soundproofed offices; that all files are locked, and are only accessible to the therapist; that people can keep appointments without anyone else knowing what they are there for; that they are protected from intrusions (by abusive spouses, or others who threaten them with physical harm); and that there are procedures to protect therapists from violence as well.

Administration

To enter into a third party payment agreement, your organization will probably have to agree to some administrative conditions.

Among them might be:

• Accepting the third party's standards of payment. You may normally charge more for services than the third party is willing to pay. Generally, if you want to be accepted as a provider, you'll have to be willing to work at their scale.
• Keeping particular records in particular ways. This may mean all staff in the organization logging their time to the minute and/or participant attendance and activities being recorded in detail. It may also mean being extremely specific about the services that each participant received, about when and for how long she received them, and about what the results were.
• Completion of specific paperwork in specific ways. Completing paperwork properly may involve using specific forms or writing reports in prescribed ways.
• The uses of particular policies and procedures. A particular medical treatment may require a second opinion before it can be administered, for instance, or files may have to be stored in a certain place. The organization's fiscal procedures may also have to take a particular form, or the organization may have to demonstrate that it can adequately handle complex billing and receiving procedures.
• Some sort of certification and regular re-certification for the organization. This kind of certification is often provided by a professional association or board, and usually involves meeting a list of standards for staff credentials, facility, and service provision, as well as undergoing a (probably annual) site visit and maintaining organizational membership in the certifying association.

Other possible eligibility requirements

• 501(c)3 tax-exempt status. For some third party payment, usually from public funds, your organization may need to be a 501(c)3 tax-exempt corporation. In order to achieve this status, which allows you freedom from any regular income, property, or sales taxes, your organization must incorporate; must prove that it is a non -profit enterprise (this doesn't mean that it can't necessarily make money, but rather that the money goes back into the organization, rather than into someone's pocket, as it would in a for-profit business.); and must apply to the Internal Revenue Service with documentation of non-profit status and be approved, a procedure which takes four to six months.
• Approved Provider status. You must become an "approved provider" with each third party payer. This may be a separate procedure for each different insurance company, HMO, etc. In some states, some agencies may grant eligibility to an organization that has already achieved eligibility with another state agency, but this is by no means universal. The eligibility requirements may be different for each payer, and many organizations choose among payers rather than trying to meet everyone's requirements.

Application procedures for approved provider status can vary greatly. With some payers, it may merely be a matter of making contact and arranging billing. Some may require an organization to serve a probationary period of several months or a year before being granted approved provider status. With others, particularly those which dispense public money, there may be a complex procedure involving applications, site visits, and large amounts of documentation. Often, in these cases, the application and documentation must be updated annually, even if nothing has changed.

• It's up to the payers as to whether they take any new approved providers. Sometimes, a third party payer may simply stop taking new providers for a period, usually for financial reasons. In such circumstances, it makes no difference whether or not your organization can meet the payer's eligibility requirements: they're simply not interested in doing business with you.

How do you prepare your organization to become an approved provider?

If you decide that third party payment is a good option for you, there is a logical series of steps you can follow to prepare the organization to become an approved provider.

Find out exactly what requirements you need to fulfill. The best source of information here is obviously the third party payers themselves. Contact the insurance companies, school systems, state agencies, etc. that you expect to bill for services, and find out what they require and what their application procedures are. In some states, there are state agencies that set the basic rules for third party payments of some types; they may be able to provide you with information about a broad range of payers.

It may also be helpful here to talk to other, more experienced organizations which have gone through the process of becoming approved providers. They may have information about particular payers, advice on how to negotiate the application, etc. that could save you time and trouble or, more importantly, keep you from getting the organization into a difficult situation.

Assess what the organization needs to do that it hasn't already done in order to qualify for third party payment. There are some extremely important pieces to this assessment, in addition to simply taking an inventory of your services, staff, facility, and administration to see how you match up to the payers' criteria for an approved provider.

• If you have to make major changes -- hiring new staff, building accessible bathrooms -- be sure that the increase in revenue and the other benefits you expect from third party payment are great enough to offset the expense of these changes.
• If you have to hire more certified people, think carefully about how this can best be done without compromising what's important about your organization. You need to think about how the whole procedure will affect current staff members. Moreover, if you want to attract qualified people and want them to stay, the organization has to offer some incentive: good pay, excellent working conditions, unusual professional opportunities, or some combination. You must also be clear about how you want to offer services, and what kind of person is most likely to fit in with the organization and its needs. 

Many Ph.D. and MD-level practitioners split their working lives into several part-time consulting jobs. It may be cheaper and/or better for the organization to hire such a person for a few hours a week at a set rate per hour, than to pay a large salary and benefits for a full-time person. By the same token, you may have a greater choice of people under those circumstances than if you were looking for a full-time staff member.

Make sure record-keeping and bookkeeping systems are adequate to track your records, financial and otherwise, in the ways you'll be required to if you're receiving third party payment.

Develop a plan for making and maintaining the necessary changes. This may actually be a great opportunity to examine and improve your organization. Maybe it's actually time to consider looking for new space. Maybe your policies and procedures need to be revamped. Maybe it's even time to reexamine your mission. Seize the day!

In many cases, developing and embarking on a plan can get you provisional status as an approved provider, with an agreed-upon period in which to complete the plan. In this situation, as long as you fulfill certain minimum requirements, you can bill the third party while you work to get everything else in line.

The plan should include, in addition to a list of the actual changes you'll need to make in services, personnel, your physical space, and administrative procedures:

• Regular communication with third party payers.
• Communication with your target population, so that they know that you're working on offering third party billing for your services, and approximately when you hope that will start.
• A scheme for evaluating the effects of the changes on the overall mission and health of the organization.

Carry out the plan. Some things on your list may take a while to accomplish. Start where you can, and start negotiating with potential third party payers right away. You may be able to get provisional approval and start sooner than you thought.

Continue to assess and evaluate the effect that third party payment is having on your organization. Don't be afraid to change direction if you think that the changes you've made are having negative effects on the organization that aren't outweighed by the increase in income and other advantages you've gained through third party payment. Make sure that the expense of tracking your finances and increased administration are not canceling out your gains. Most importantly, be extremely careful that your organization's new responsibilities and directions aren't causing you to forget your mission, the reason the organization started in the first place.

Communicating and maintaining relationships with third party payers

Once you have actually qualified as an approved provider, and have started being paid for services by insurance companies and other third parties, it is extremely important to maintain good communications with these payers. As explained above, third party payment can be a double-edged sword: there are disadvantages, many of them bureaucratic, as well as advantages to the system. The best way to keep problems at a minimum is to establish good channels of communication and keep them open.

Some particularly important points to consider:

• As with any other situation involving human beings, a good part of how easily you and your payer can work together will depend upon personal relationships. It's important to establish good relationships with the people you need to deal with in the payer organization. Besides making everyone's life more pleasant, maintaining friendly relationships can mean that people at the other end won't hold up your checks, will hurry things along at their end of the line, and will bend a rule occasionally to make your work a little easier. All this will make it easier for your organization to respond to their requests as well, thus further improving relationships over time.
• Depending upon the amount of third-party billing and the level of bureaucracy involved, it may make sense for you to hire or designate a specific person to handle relations with payer organizations. He would be the contact person for all your dealings with payers, would deal with problems and issues, and would keep things flowing smoothly. This is often not the job for a visionary leader, but rather for someone who functions well in a bureaucracy. Having such a person will make it easier for your organization to maintain real communication with your payers.
• Things are constantly changing in the world of third-party payment. HMO's, for instance, essentially didn't exist until the 1970s; now they provide medical insurance for a large proportion of the population. The health and mental health care delivery systems are changing as this is being written: in ten years, they may be unrecognizable. It is necessary for any organization pursuing or collecting third party payments to stay on top of the situation. Keeping in close communication with payers is the best way to avoid surprises.

In Summary

There are distinct advantages and disadvantages to pursuing third party payment. Some obvious advantages are increasing the organization's income; stabilizing funding; serving a larger range of people, particularly the low-income population; and gaining credibility and respect for the organization. Many of the disadvantages of this course of action involve increased administrative and record-keeping responsibility, and the difficulties of dealing with a bureaucratic system. Perhaps the greatest danger here is that an organization can lose track of its mission, and begin to be guided by the necessities of billing, rather than by its original cause and by the needs of those it was founded to serve.

If you decide, after weighing the advantages and disadvantages, to pursue third party billing, you can prepare for it by making sure you have all the eligibility information you need; carefully assessing your organization to determine what changes you'll have to make to become an approved provider; and creating a feasible and comprehensive plan for making those changes and carrying it out. Once you gain approved provider status, you'll need to keep reassessing the effects of third party payment on your organization, and to maintain good communications and personal relations with people in the payer organizations.

If you have carefully considered its consequences and prepared well, third party payment can prove to be a great source of long-term financial stability and sustainability as well as overall improvement for your organization.

You understand:

___ Third party payment

___ Advantages of pursuing third party payment

___ Who is eligible for third party payments?

___ How do you prepare your organization to become an approved provider?

___Communicating and maintaining relationships with third party payers

If you were like most small businesses, you'd be trying to sell your services in the marketplace at a price that was not so high that consumers wouldn't buy, but high enough so that you could make a profit.

Well, surprise! Whether you realize it or not, you are a small business. But if you're like many non-profits, you may have restrictions on what you can do that most small businesses don't have to worry about. Funders may tell you exactly what you can spend money on and it may not be exactly what you need. There may not be enough money to do what you need to do, or funding may not be available for programs that you feel are necessary for the community. Wouldn't it be great if you could actually operate like a small business, and use your income in whatever way made the most sense for your organization?

One way that you could achieve this for at least part of your income is to establish a fee-for-service structure that allows you to charge for what you do. Many non-profits use such a structure either as a major source of income, or as a supplement to other funding. This section will help you understand why and how you might set up and use a fee-for-service structure to develop dependable funding for your organization over the long term. It will give you some ideas about what fee-for-service actually entails, who your customers might be, some advantages and pitfalls of this kind of operation, and how to set up a fee-for-service structure and sustain it over time.

What is fee-for-service?

In its simplest terms, fee-for-service is just what it sounds like: fees paid in return for services delivered. Those services, however, could range from what your organization actually does in fulfillment of its mission (substance use treatment, adult literacy instruction, child care, etc.) to training providers or others to consulting with businesses and agencies. The fee-for-service structure you adopt could be very simple - charging a set rate per unit of service (per hour, per person, per workshop, per place in a program, etc.) -- or much more complex -- setting up a for-profit corporation, for instance, to make money on fee-for-service and channel it to your non-profit organization.

Regardless of the services involved or the structure through which they're provided and paid for, the goal is the same: to provide income -- particularly income that can be used in any way you choose -- to the organization over the long term.

What are the advantages of fee-for-service?

As we'll discuss below, setting up a fee-for-service operation involves a fair amount of work and thought. Why would you want to go to the trouble? There are several answers to this question:

• It could increase your income substantially. Grant funds often barely pay for the cost of providing services. Sometimes they are scant enough that the organization may end up subsidizing its own work out of funds that could be used instead for improvement or expansion. Fee-for-service guarantees that you'll be paid reasonably for what you do.
• You actually get paid directly for everything you do, thus confirming the value of your services. This arrangement also makes it easier to plan both your finances and your program, because you can be sure that your payment will support what you want to do.
• Fee-for-service money comes without strings attached. You can use it for whatever you choose: operating expenses, cash reserve, capital outlays. You don't need anyone's permission to spend it, and there are no time limits on spending it (no rushing around to get the money spent by June 30 or December 31, when your financial carriage turns into a pumpkin).
• It doesn't stop you from getting and using other funding for particular purposes. You can still continue to be funded from other sources as well, as long as you abide by funders' rules and don't "double-dip," i.e. fund the same person or service twice from two different sources.
• If there's a market for what you're selling, fee-for-service money has no end. You can continue to provide services and get paid directly for them for as long as your organization exists.

What are the disadvantages of fee-for-service?

While a fee-for-service structure can eventually assure you of long-term, steady income, it comes with its own set of difficulties as well.

• It requires your organization to institute another level of fiscal management. Especially if you have public funding, you have to be careful to keep track of your fee-for-service income separately so that you can document that your public funds have been spent correctly. In addition, there are some basic business practices that you have to adhere to:
  • You have to be able to show your customers that you've delivered the services you were paid for.
  • You have to keep track of work that you can bill for, and of accounts receivable (i.e. the money that you're owed for services you've provided but not yet been paid for).
  • You have to do the billing regularly.
  • You have to make sure, especially with participants, that everyone gets a receipt for payment, and that you keep careful track of what's been paid. The reason this is particularly important for participants is that, especially if they're low-to -moderate income, they may pay in cash, and thus have no automatic record (such as a cancelled check or credit card bill) to prove they've paid.

It's essential to consider your fee-for-service structure beforehand to confirm that it will pay its way, and more. If you're taking in $20,000 a year, and you have to hire a $20,000-a-year staff member to administer the operation, all you've gained is a headache. Be sure that your gains, financial and otherwise, are worth the effort.

• It requires you to be especially careful about the regulations of your funders. Many public funders, for instance, may not allow you to mix participants being sponsored by public funds with other participants paid for by third parties or by themselves. Some public funders will only fund organizations whose services are free to all participants. You need to be sure you know the rules and understand how to follow them so as not to jeopardize your other funding.
• You have to market your services. Unless you're nationally famous and constantly in the news, you have to let potential customers know who you are, what you do, and why they should hire you to do it. That may mean a lot of work (see the discussion on marketing plans below), and it has to go on forever, or for as long as you continue to run a fee-for-service operation.
• If you're charging participants directly, you may scare some away because of the cost, especially if they're already nervous about plunging in. You may also have to deal with charges of unfairness, because some people are paying more than others, or because some are paying and others -- who are paid for by third parties or eligible for public funding -- are not.
• You may have to chase down money that's owed, or wait long periods to be paid. That's not only a pain, but it can also affect your relationship with the community. If you're trying to collect money owed by participants, you may embarrass people who are already embarrassed by not being able to pay, and ruin your image in the target population as well.

Who might pay for your services?

There are a number of possible customers at whom you might aim a fee-for-service operation. These range from third parties who might pay for services for others to the direct recipients themselves to recipients of such services as training and consulting.

Third parties who desire services for people in whom they're interested

• Employers who want services for their workforces. Some employers are willing to offer various kinds of services to workers as part of their benefit packages, or because it benefits the business. These services might include:
  • Employee assistance programs, such as: substance use treatment, counseling and psychotherapy, wellness and preventive health maintenance, parenting, etc.
  • Education: English as a Second or Other Language (ESOL), basic skills (reading, writing, math, computer literacy, and/or GED classes), job-related instruction.
  • Workshops in areas such as problem-solving, interpersonal skills, and working as a team.
  • Child care.
• Other organizations and agencies whose participants need your services. Services in this situation might include those listed in relation to employers, and such others as:
  • Employment readiness: instruction in resume writing, interviewing, getting and keeping a job, relations with fellow workers, etc.
  • Employment training: specific skills and knowledge for particular jobs.
  • Job placement.
  • Transportation.
  • Medical services: prenatal counseling and care, nutrition, regular medical care, inoculations, etc.
  • Early childhood education.
  • Recreational services for children and youth.
• Court systems, jails, and probation offices. The courts and correction system often require offenders to undergo treatment or participate in services instead of, or in addition to, incarceration. You may be able to offer services similar to those described above, and including also:
  • Anger management
  • Counseling aimed at sex offenders, child sexual abusers, domestic abusers, etc.
  • Literacy and GED instruction in both English and Spanish.
  • Substance use education.
  • Services for the families of those in prison.
  • Victim/witness counseling and therapy.
  • Mediation of potential court cases -- particularly small claims, summary process (eviction), landlord/tenant and personal disputes, etc.
• School systems. Although we often think of school systems as completely self-contained, there are, in fact, many things they can't do for themselves, or find it easier to pay other entities to do. Among these might be:
  • Workshops for teachers in such areas as conflict resolution, basic counseling skills, and classroom management.
  • Training for teachers in specific, non-academic curriculum areas: violence prevention, substance use, child development, health issues.
  • Direct services to students, including counseling, training and supervision of peer mediators and peer tutors, after school programs, tutoring, arts enrichment, etc.
  • Workshops for students and parents in conflict resolution and mediation, substance use, child abuse and sexual assault, study skills, etc.

Direct recipients of services

You may decide to charge those to whom you actually provide services. Most organizations that do this use a sliding fee scale, which charges people according to what they can afford. There are suggestions about how to construct a sliding fee scale later in this section, as well as an example of what an actual sliding fee schedule might look like.

Charging participants only makes sense where it won't drive potential participants away, and where most can afford to pay. A real-life example shows why this is true.

The adult literacy program the author worked with started out to support itself in 1984 by charging students. The organization devised a sliding fee scale ranging from $20 a week down to $2 a week for unlimited hours of instruction. The idea was that if we got 40 students a week, we'd make enough to pay for two salaries, rent, and materials. It all made sense at the time, and seemed to be a way not to become dependent on public funding, with all the strings attached to it.

Unfortunately, we had not taken into account the fact that most people who lacked basic skills were also unable to find jobs that paid well. Within only a few months, there were in fact 40 students in classes most weeks. The majority of them, however, were closer to the $2 end of the sliding scale than to the $20 end. The few who paid top dollar often grumbled that they were being cheated because others weren't paying their way.

Needless to say, the original idea of supporting the organization largely by student fees didn't work because most students simply didn't have the money to pay. In addition, the sliding scale made for resentment and division among students. Fee-for-service in this case was -- and caused -- more trouble than it was worth.

Parties who desire consulting, rather than direct, services

If you, as an organization, have particular knowledge and skills, you may be able to offer these as consultants to the third parties mentioned above, as well as to local, state, and national agencies and organizations. 

Some of the many areas which consultants are often asked to address are:

• Environmental issues.
• Education at all levels.
• Organizational development.
• Human relations/racism/diversity.
• Participatory management.
• On-the-job health and safety.
• Training of employees, staff members, etc. in areas in which the organization hasn't the capacity to do its own training.

If you are able to do it, consulting has many advantages. It pays well, usually far better than simply providing services. It gives you a chance to use and pass on what you have learned. Also, it spreads the name and reputation of your organization, thus opening the way for more consulting or other fee-for-service opportunities, and strengthening your ability to fulfill your mission.

How do you develop a fee-for-service structure?

There's more to establishing a fee-for-service operation than buying a cash register and waiting for the hordes of customers to beat a path to your door. You have to approach it exactly the way a for-profit business would: by conducting market research, coming up with and carrying out a marketing plan, setting reasonable prices, and creating an administrative structure to support your business. Only after completing these tasks are you likely to get customers and to be ready for them.

Conduct market research to find out whether there is a market for your services.

This means something different from finding out whether there's a need. There may be lots of people in the community who need your services -- adults who don't have basic skills, or employers who don't deal well with the diversity of their workforces, for instance -- but if they don't see it as a need, or if they or third parties aren't willing to pay for your services, then there's no market for them.

What matters is not just whether there's a need, but whether there's a demand -- people who want your services, and are willing to pay for them. Although there has to be a need before there can be a demand (at least in most circumstances -- we'll leave TV advertising out of this), it's the demand that creates the market. And it's the level of demand that market research has to find.

Big corporations have whole departments -- hundreds or even thousands of people -- whose only job is market research. They conduct national polls of thousands of people, run focus groups, target their research to particular age groups and geographic areas, and crunch huge numbers in powerful computers, all to decide how best to sell a new underarm deodorant.

• You obviously don't have the capacity of a large corporation, but there are some steps that you can take in your community to find out whether there's a market for your services.
• Meet, individually and in groups, with employers, directors and staff of other agencies and organizations, probation officers, the target population, or other potential customers to find out what services they want. If you can, talk to people who don 't know much about your organization as well as those with whom you already have dealings. Focus on them, not on what you're planning.
• Find out whether the services your contacts are looking for are already available from other sources and how well used they are.
• Learn about other organizations that charge for their services. How do they operate? Are they getting any business? How do they market their services?
• If appropriate, meet with members of the target population to find out whether they'd be willing to pay for services, if that were necessary in order to continue them.
• Try to learn some history: did other organizations in the community attempt what you're thinking about, and how successful were they? Is there bad feeling about fee-for-service as a result of a past situation you haven't been aware of? The answers to such questions may be an important part of your research.
• Be honest with yourself about the results of your research. All too often, organizations conduct market research and then ignore their findings in favor of doing what they wanted to in the first place. If everything points to fee-for-service not working, it probably won't work.

Every new program or direction involves some risk. The key here is determining whether the risk of trying fee-for-service is reasonable or unreasonable. If all the signs point to failure, then the risk involved is probably too great. If no one 's been able to do this successfully before, but there's evidence that attitudes and possibilities have changed, then the risk may be worth taking. You have to do your research well and look carefully -- and objectively -- at the results before you decide what to do.

Develop and implement a marketing plan.

If your research tells you to go ahead, the next step is to come up with and carry out a plan to sell your services. That means carefully choosing the services you'll offer, and making sure that people know what your services are and why they'd benefit from using them. If you haven 't charged for these services in the past, it also means letting people know that you are charging now, and why.

Choose the services you'll market

Your research should tell you what services the community will be willing to pay for. If there's no call for consulting services, trying to sell them is likely to end in failure. If it's clear that businesses aren't willing to pay for services for their employees, it makes no sense to offer those services. Try to match what you're offering with what your research tells you that people and organizations want.

You also need to make decisions about what demands you're willing to meet. If a business, for instance, asks you to do something that's within the scope of your work, but goes against the philosophy or mission of the organization, you need to be honest -- with yourself and with potential customers -- about what you will do and what you won't.

The adult literacy program referred to earlier, for instance, provided workplace services to employees. It always refused, however, to provide literacy instruction that was only job-specific, maintaining (a) that literacy skills were core skills that made all workers more competent and productive, and (b) that equipping a worker with only the basic skills that allowed him to do a particular, low-skilled job consigned him permanently to that level of employment. The program's mission was to empower people and communities, and it made clear that it wouldn't do work that denied that mission.

Marketing to the target population

If you're going to be charging participants, especially for services that they've gotten free up until now, how are you going to inform them that services aren't free, and how are you going to justify that fact? Since this section is about institutionalization, justifying the new situation should be straightforward: it's necessary to continue the service in the community indefinitely. You are, in fact, making this change so that you can keep operating, regardless of the state of funding or the political situation. Most people will understand and respond to that.

Another concern here is assuring current and potential participants that they won't be denied services if they have little or no money. If you make clear that no one will be charged more than she can afford, and that no one will be turned away for lack of funds (assuming this is true), that will help greatly. It's probable that, no matter what you do, you'll lose some people because of the fee, but you can keep this number to a minimum if you're honest and thoughtful in presenting the situation.

• If you're already successfully recruiting among the target population, your procedure probably won't change much. There are a number of other Community Tool Box sections that discuss reaching the target population (Handling Problems and Crises in Communication and Establishing an Adult Literacy Program, to name two). Briefly, to reach people with your message, you should remember some basics:
• Put your message where people will see it: in their neighborhoods and stores; through fliers and posters; on their favorite radio and TV stations; through the publications they read.
• Use language that your target audience will understand: plain, uncomplicated English or the first language(s) of the community.
• Get the help of community members or others -- clergy, local officials, etc. -- whom the target audience knows and trusts.
• Establish a presence so that the folks you're trying to reach know who you are.
• Make it easy for people to contact you. A 24-hour answering machine, tear-off phone numbers on fliers and posters, or a memorable phone number can all increase the chances that you won't miss anyone.

When you discuss your services with potential participants, be sure to be clear and honest about payment. Explain exactly what your charges are, what the exceptions are, how they can handle it if they haven't enough money, etc. Don't be embarrassed by the subject: it's important to them and it's important to you.

Marketing to third parties or to potential consulting customers

The most important part of marketing to employers, organizations, and other entities is making them aware of who you are and what you do.

There are many ways to do this:

• Direct mail. Develop a brochure, letter, or other printed material you can send out in the mail. It should include, in a few sentences each, a description of the services offered, a reason for them to purchase the services, and a description of your organization. It can be sent as a blanket mailing to businesses, schools, agencies, etc. (The Chamber of Commerce mailing list might be helpful here: you'll have access to it if you're a Chamber member.) You could also target your mailing to particular types of, or even specific individual businesses or other organizations, if you know who'll be most likely to take advantage of what you have to offer. If you have your own mailing list, you might target entities already on it.
• Personal contact. You could meet in person with contacts or arrange presentations at targeted businesses and organizations.
• Intermediaries. You could ask third parties (perhaps members of the community who've used and been pleased with your services) to help you establish contacts with potential customers.
• E-mail. You could use the same brochure or letter developed for direct mail, sent as an attachment or pasted into the body of the text. Again, a Chamber of Commerce or other e-mail list would be useful here.
• Website. Either a new or existing site could be used to advertise your services. The great advantage of this medium is that you could put up as much material as you liked, including pictures, news articles, statistics, etc. The major disadvantage of a website is that you have no way of getting people to visit it. It's probably best used in combination with other methods.
• Telephone. You could phone personal contacts at a targeted list of businesses and organizations.
• Paid advertising. You could use the media to get the message out. Ads might include statements from satisfied customers, participants, etc.

It's probably ideal to use a combination of some or all of these methods in order to try to reach as many people and organizations as possible in as many ways as possible. As with any campaign of this type, there's no substitute for personal contact. You need to establish a personal relationship with someone in every organization or business you are or might be working with, so that neither you nor your customer is dealing with a faceless entity. It's much easier to address problems, iron out issues and disagreements, and to work together effectively if the contact between you is personal.

Determine and set fair prices for your services.

Probably the best way to determine a fair price for third parties is to investigate what similar services cost, both in your community and in other communities of comparable size and affluence. You might also check on the rates that state and local agencies pay for such services. You can always decide to charge less than others do, but it's probably unwise -- and unfair -- to charge more.

If you're charging participants directly, the fairest way to determine their costs is usually through the use of a sliding fee scale. This determines payment by income, often through figuring in family size as well. Thus, a single person with a yearly income of $35,000 might be at or near the top of the scale, while someone with a family of five and a yearly income of $20,000 or less might be at or near the bottom.

To construct a sliding fee scale, start by deciding what the highest payment level should be. What could someone with a particular level of income reasonably afford, and what should she get for her money? Should the top payment be as high as what you charge third parties for the same services? Should you take into account what people are willing to pay for other things in their lives -- cable TV, for example?

The next step is deciding on the bottom payment. It shouldn't be zero. If you're asking people to pay something, it's actually somewhat insulting to imply that an individual can't come up with anything at all, even if it's only a dollar a week. Participants with very little money may actually value the opportunity to show their ability to pay something.

This can also be a two-edged sword. People may, out of pride, overestimate or overstate their ability to pay, putting themselves in a difficult situation. They may feel, if they can't pay in a particular week or month, that they have to forego services for that time. Or they may find themselves further and further behind, and simply quit out of embarrassment or out of despair that they'll never get caught up.

Assuming that providing services is the reason for your organization's existence, it's important that participants understand that they can renegotiate their payments if there's a problem. The point of creating a sliding-scale fee schedule is so that people won't have to estimate what they can pay, but can resort to a formula which, in most cases, won't overcharge them. (If it does, for any reason, they should understand that it can be adjusted to their needs.)

Once the high and low ends of the scale are fixed, it should be fairly easy to come up with steps in between, and to adjust them according to income and family size.

Example of a sliding fee schedule: Columns are yearly income. Rows are family size. Range is in dollars per week

Family Size	<$10K	$10K-15K	$15K-20K	$20K-25K	$25K-30K	$30K-40K	$40K-50K	>$50K
1	$ 2.00	$ 3.00	$ 5.00	$10.00	$15.00	$15.00	$15.00	$15.00
2	$ 2.00	$ 2.00	$ 4.00	$ 8.00	$12.50	$15.00	$15.00	$15.00
3	$ 1.00	$ 2.00	$ 3.00	$ 6.00	$10.00	$12.50	$15.00	$15.00
4	$ 1.00	$ 2.00	$ 3.00	$ 5.00	$10.00	$12.50	$15.00	$15.00
5	$ 1.00	$ 1.00	$ 2.00	$ 4.00	$ 9.00	$11.00	$15.00	$15.00
6	$ 1.00	$ 1.00	$ 2.00	$ 3.00	$ 9.00	$11.00	$13.50	$15.00
7	$ 1.00	$ 1.00	$ 1.00	$ 2.00	$ 7.50	$10.00	$12.50	$15.00
8	$ 1.00	$ 1.00	$ 1.00	$ 2.00	$ 5.00	$ 9.00	$12.50	$15.00
>8	$ 1.00	$ 1.00	$ 1.00	$ 2.00	$ 5.00	$ 7.50	$10.00	$15.00

 

Create an administrative structure to handle your fee-for-service operation. Depending upon how much of your whole operation is fee-for-service, the nature of your services, and the restrictions of your other funding, this could either be a very simple or a very complex issue. It may be as simple as making small adjustments in your bookkeeping software (if your books are computerized) to track fees, or as complex as creating a whole new set of books to handle fee-for-service business, or even hiring a new part-time or full-time employee to oversee it.

The pieces that the administrative structure has to handle are:

• Keeping track of all the financial details relating to the fee-for-service part of your organization: income and expenses, billing, payables and receivables, etc.
• Making sure that fee-for-service work isn't conflicting with the requirements of other funders -- and vice-versa -- and that you're not collecting twice for any work you do.
• Ensuring that any work contracted for is completed effectively and on time.
• Maintaining contact with current and potential third party customers, and seeking out new ones.
• Completing any necessary reports or other paperwork.
• Being aware if payment issues are affecting service to paying participants, and negotiating with them if that's the case.

One possibility, mentioned earlier, is creating a for-profit corporation that would perform all fee-for-service work, and channel money into the non-profit. This can be a great idea, but it requires a lot of time with lawyers and accountants, and it should only be considered if (a) you have the resources to sustain such an operation until it starts making money, and (b) you expect it to make a LOT of money in the long run. Otherwise the time and effort necessary to start it up, as well as the other difficulties of running a small for-profit business, make it far more trouble than it's worth.

How do you sustain a fee-for-service operation?

Even once your operation is up and running, it won't sustain itself. You need to continue to seek out customers, advertise your services to the target population, and to examine what you're doing in order to improve and expand it.

• Continue to update and implement your marketing plan. Your marketing plan may be working well, but you have to assume that conditions will change over time. You want to be ready to change your plan as demand changes, so that you can continue both to deliver services to those who can benefit from them, and to generate income for the organization. You have to look at your plan regularly - annually is usually about right - to reassure yourself that it's still appropriate, or to adjust it to a changing climate.
• Maintain personal contacts at businesses and organizations. Even though you may have done business with an entity for years, you have to keep in regular contact. Institutional memories tend to be short because positions shift and people move on. Your contact at a particular business may be transferred to Manila, or may leave to become a fly-fishing guide in Wyoming.

If you lose a personal contact at a business or organization that's a past, present, or potential customer, you need to develop a new one there. Personal contact is the backbone of any fee-for-service operation.

• Continually evaluate what you're doing, in terms of both how well you 're accomplishing your organization's purposes (mission, philosophy, long term goals, etc.) and how well you're meeting the needs of those -- participants and others -- who are paying for your services. There are several elements to this kind of evaluation:
  • It's important to keep services as effective as possible both for fulfilling your mission and for maintaining and increasing the value of your services in the marketplace. Thus, you can use an evaluation to document and advertise your effectiveness.
  • At the same time, you can use an evaluation to highlight areas where you could improve, or to think about different and potentially better ways to do your work. As we discuss in many places throughout the Tool Box, a successful organization is dynamic, always looking for ways to change for the better. Regular evaluations can help maintain that dynamism.
  • Another area to evaluate is the effect of fee-for-service on participants. If they're paying themselves, are you gaining or losing participation as a result? Are you losing potential participants because of cost, or does paying make participants more diligent? It's important and helpful to answer these kinds of questions.
  • If participants themselves are not paying, are some who aren't being subsidized passed over in favor of others who are paid for? Are you taking on more participants than you can serve effectively simply because they're paid for?
  • Administrative and fiscal structures and procedures should be revisited regularly, and streamlined as much as possible. Fee-for-service shouldn't be a drain on the organization: if it is, you shouldn't be doing it.

Regularly evaluating what you do -- and acting on the results -- can keep your fee -for-service program on track and flourishing, and can also help the rest of your operation.

In Summary

Providing direct or consulting and training services for which you're paid directly by third parties -- businesses, organizations, etc.-- or participants can bring in money that your organization can use in any way it chooses, and can go on throughout the life of the organization. A fee-for-service operation can be an important contributor to your organization's continuity and financial stability.

Developing and maintaining a fee-for-service structure takes some effort, however. You have to create the fiscal and administrative capacity to handle the operation and keep it separate from, and out of conflict with, your other funding. If you're charging participants directly, you have to anticipate and deal with the issues that may arise when they have difficulty paying, or are scared away from the service by the prospect of a fee. Most importantly, you have to engage in market research, and devise and carry out a marketing plan... forever. Finally, you have to sustain the operation through regular evaluation and change to increase the effectiveness of your services and to meet the demands of the market.

Fee-for-service is a lot of work, but it can provide you with a long-term source of money that you can use any way you want to, and help you institutionalize your organization.

___You've considered the advantages and disadvantages and decided that a fee-for -service operation is right for your organization.

___You've decided on the services you're ready to offer.

___You've done market research to find out whether your services are needed, and by whom.

To develop the program:

___You've developed and implemented a marketing plan.

___You've determined and set a fair price for services.

___You've created an administrative structure to handle the fee-for-service operation .

To sustain the program:

___You continue to update and implement your marketing plan.

___You maintain personal contacts at businesses and organizations.

___You continually reevaluate what you're doing.

Chapter 46 is about making sure your organization can continue for the long term. In order for that to happen, you obviously need a number of things: a competent and committed staff, an organizational structure that works, appropriate space, community support... and money. Stable, adequate funding is the holy grail for just about every organization that sees itself as more than temporary. There are many possible sources of stable funding, but one of the most readily available -- and probably the largest -- is public money. A share of it may provide the foundation you need if you want to institutionalize your organization.

This section discusses the nature of public funding, its advantages and disadvantages, what you need to do to obtain it, and what you need to consider once you have it. It may be the answer to your prayers, or your worst nightmare... or both. You have to examine all the angles to decide whether public funding is a good option for your organization. This section should give you much of the information on which to base that decision.

What is public funding?

Public funding, in its simplest terms, is funding that comes from the public treasury. It's the taxpayers' money, and the funding of health, human service, environmental, community development, and other public service programs is one of the ways it's spent for the common good. Public funding may come through federal, state, or local government channels, and those channels are usually different at each level.

• Federal funding comes from federal taxes -- the money that individuals and for-profit businesses pay to the IRS, in other words. The federal government usually doesn't fund small organizations directly, but rather parcels out money to states for funding various activities. On occasion, however, the government -- often for pilot programs or the like -- will offer research or program money to community -based or grass roots organizations. In this case, it is generally an agency of a government department that oversees the process.

For example, OERI, the Office of Educational Research and Improvement, an agency of the U.S. Department of Education, offers grants for research on specific educational topics. Although most of its grants go to state agencies or universities, it occasionally funds community-based organizations.

• State funding, as mentioned above, may come from federal money, or it may come from the state's revenues. These vary by state laws, but may include state income taxes, sales taxes, taxes on other commodities (cigarettes, gasoline, restaurant meals), fees for state government transactions (car registrations, professional certification, various permits), and even lottery sales. As with the federal government, it is generally an agency or office of a state government department or division (Department of Public Health, Department of Employment Training, Department of Environmental Management, Division of Youth Services, etc.) that makes the decisions and administers funding. Most of this funding goes to local organizations, which may be community -based or other nonprofits, local government entities, school systems, etc. In the case of contracts, money may also go to for-profit and/or out-of-state concerns that submit successful bids.
• Local funding may come from federal or state sources, or from local - county and municipality - fees and taxes, particularly property taxes. Although local governments may also work through agencies, many, especially smaller, counties or municipalities may administer funds through an individual -- an Administrative Assistant, Town Planner, Human Service Coordinator, etc. These funds are limited to the county or municipality which offers them, but an outside organization that serves a sizeable number of residents may still be eligible for them.

An organization that served the homeless located in one western Massachusetts county nonetheless regularly received money from another, because it maintained shelters in that county as well.

Why should your organization apply -- or not apply -- for public funding?

 Public funding has its advantages and disadvantages, but there are a number of good reasons why you should consider tapping into it.

Advantages of public funding:

• Public funding often represents the largest amount of money available to fund organizations or initiatives. A fairly populous state has a budget of tens of billions of dollars. The federal government budget is in the trillions. Thus, even a very small portion of the budget can represent a large amount of money for programs -- in the tens, or even hundreds of millions of dollars. That can very nicely cover the few -- or even more than a few -- thousands your program needs.
• Public funding is often more reliable and more long-term than private funding. Once public funding for a particular issue becomes a recognized item in the budget, it is often refunded without much question, year after year.
• Public funding is often appropriated specifically for what your organization does. The federal government, most states, and many local governments offer money for such services as substance use treatment, youth services, community health education, adult literacy, mental health services, etc. It is often easier to ask for money already designated for what you want to do than it is to convince a funder that what you're doing is worthwhile.
• Public funding gives your organization more credibility in the community. It establishes you as a "legitimate" entity, and makes it easier to gain community moral and financial support.
• Public funding may make it easier for your organization to gain funding from other sources. Both the fact that a public funding source saw you as fundable, and the fact that you've already done the work of becoming eligible for public funding, could make another funding source -- public or private -- more willing to work with you.

An adult literacy program, already funded by two state sources (the Department of Education and the Department of Employment Training) was able, as a result, to get funds from a third, the Department of Public Health, to add health education to its services. The facts that it already had fulfilled the requirements for state funding, and that it had a good reputation with its other state funders contributed greatly to its successful application.

• Public funding is subject to advocacy, and therefore you may have some influence on how much of it is available. Through an advocacy or professional organization or a grass roots coalition, or simply through educating the public, you may be able to convince legislators about the need for funding for your particular issue.

Public funding may be just the answer you've been looking for... or it may not. Along with its considerable pluses, it can carry some distinct negatives as well.

Disadvantages of public funding:

• Public funding proposals (see "How do you apply for public funding?" below) may be extremely time-consuming and difficult to write. Government agencies and offices at all levels often have their own sets of regulations, which may conflict with those of other funding agencies. In addition, they may require an enormous amount of documentation and information, all requested in bureaucratic language that's hard to follow and often self-contradictory.
• Public funding may come with lots of conditions attached. Reporting requirements, particular ways of operating or administering programs, prescribed money management arrangements -- all might be part of a grant, and might present difficulties, especially for small organizations.
• Public funding requires strict accounting and audit procedures. You have to be able to track the money in your grant accurately, and may have to return it if it's not spent as agreed upon. If your grant is greater than a certain, relatively small, amount, you are required to undergo an annual audit that can be both costly and time-consuming.
• Public funding, because of its restrictions, may not allow you to do what you want to do, or may conflict with your mission and philosophy. Some granting agencies may have their own ideas about how services should be delivered, for instance, and may have little tolerance for an unorthodox, or just a different, approach.

As in all such situations, it's extremely important to assess the effect of accepting a grant on your organization. If it's going to require you to violate your guiding principles or to change your mission, you might be better off turning the grant down. Taking it might transform your organization in ways that wouldn't serve its original purpose. If you're considering applying for public funding, you might want to have an organizational discussion about this issue beforehand.

• Public funding may be administered by a bureaucracy that is unresponsive, ignorant of the important issues for your organization, rule-bound, and/or difficult to deal with.

One way to address this issue -- one that crops up frequently -- is to establish personal relationships with people within the funding agency (see "How do you position your organization to acquire public funding?" below). Most people are helpful and flexible if you can approach them as human beings: it's only when they -- and you -- are trapped by their positions that their bureaucratic nature wins out.

• Public funding payments may be slow in coming, either because the funding agencies are inefficient or unresponsive, or because the government isn't getting money to them.

State governments in particular often have great difficulty in passing budgets on time. In 1999, both Massachusetts and New York, for instance, failed to pass state budgets until several months after the beginning of the fiscal year. That meant that agencies had no money to pass on to programs, which in turn had to operate on their other sources of income or borrow money in order to keep going. Even after the budget was passed, it took several weeks for the bureaucratic wheels to turn, and for money to arrive at its destination. Some services had to close down for weeks or months, and some organizations went out of business because they didn't have enough cash flow or credit to cover their operations.

• Public funding can get cut or run out if the economy is bad, or if fashions in funding change.

At all levels, the availability of public funding depends, to a large extent, upon trends and public awareness. AIDS and cancer research, adult literacy, violence prevention, air and water clean-up, teen pregnancy prevention, education -- all have received increased public funding at various times over the past three decades because of public and legislative attention.

Often, a particular issue is highlighted by the publication of a book or newspaper or magazine article ("Illiterate America," by Jonathan Kozol, brought adult literacy to the fore in the mid-'80's; "The Silent Spring," by Rachel Carson, started the environmental movement in the '60's; a 1981 article in the New York Times Magazine first informed most of the country about the spread of AIDS). Sometimes, an issue may be raised by a national figure or policy maker (Senator Bob Kerrey's focus on health care in his unsuccessful campaign for the Democratic presidential nomination helped lead to President Clinton's later emphasis on it). But whatever the initial push, public and political enthusiasm for various kinds of public funding is often fickle.

Unfortunately, legislative support for public funding for an issue is seldom based on careful consideration of the needs of the country or the community, but rather on what seems to be attracting votes or attention. Advocacy and lobbying have a lot more to do with public policy than logic or compassion do. Thus, funding for a "trendy " issue can be unstable at best.

Some issues, however -- AIDS research and outreach, for instance -- seem to have reached deeply enough into the national consciousness that their funding is reasonably safe. You need to consider whether your organization's focus falls into such a category or not. If it does, public funding will probably be a long-term benefit to your organization; if it doesn't, you might want to take a long, hard look at your funding plans.

It's obvious that applying for public funding isn't necessarily a simple issue. It's important to understand clearly the pros and cons for your organization, and to decide whether public funding will be a plus for you. That's in the best of all possible worlds: the reality is that, for some organizations, it may be impossible to survive, and particularly to survive for the long term, without public funding. Given that, the rest of this section is devoted to how public funding works, how you can get yourself in a position to get it, and how you can deal with it if you 're successful.

How do you find out about the availability of public funding?

If you've decided to apply for public funding, how do you find out when and where it's available? There are a number of ways in which government agencies and municipalities spread the word when they have money to give out. They're often concerned that as many organizations as possible have the chance to apply, so that they can pick and choose to get the best service.

But not always... they may want to limit applicants to certain categories or to certain organizations, or they may have very strict requirements that only a small number of organizations can meet. Politics can play a role here as well.

They also have a legal obligation to make sure that the news is widely spread, so that there's no favoritism or discrimination involved in the application process. The following are some of the ways that public funding sources advertise grant or contract possibilities.

• Federal, state, and local agencies usually send notices of funding possibilities to everyone on their mailing lists. This includes, among others, all currently and formerly funded organizations, organizations which have applied for funding in the past, and other agencies. If you know which agencies you're likely to be funded by, you can ask to be placed on their postal and/or electronic mailing lists.
• The Federal Register, a weekly publication, publishes all federal grant notices, with application information and deadlines. It's available on the Web and at most public libraries.
• Virtually all federal and state government agencies, and many local government agencies and offices as well, have websites, which often post funding notices with information on how to apply. Professional associations, advocacy groups, and other related organizations may also post funding information on their websites, newsgroups, or e-mail lists.

A Web search can often turn up information on funding possibilities from these sites. Be careful to check dates, however, since web information can be months, or even years old.

• The newsletters and journals (print and electronic) of professional associations, community coalitions, and other groups often publish funding information as a matter of course. If you don't receive any of these publications, many are available at libraries or on the Web; in your local area, you can, once again, probably ask to be placed on the list to receive community and municipal newsletters and funding notices.
• Establishing and maintaining contact with individuals at potential funding agencies or town or county offices will ensure that you get information when you need it. These folks can also be helpful if you decide to apply.
• Becoming part of a larger network of community-based, non-profit, and other organizations and agencies in your area will greatly benefit your organization and gain you funding information as well. It will give you access to word-of-mouth news that you might not get otherwise.

Most public funding is offered on a regular (usually annual) basis. While some is essentially earmarked to refund already-funded organizations and programs, some is often competitive or otherwise available. The funding cycle generally follows the fiscal year. Since the federal fiscal year starts September 1, and most state and local fiscal years start July 1, state and local funding notices are most likely to go out in February or March, or even earlier, with application deadlines in April or early May. The federal timeline often lags behind by a month or two. Thus, late winter and early spring are when you're most likely to find public funding up for grabs.

In addition, agencies and government departments, like publicly funded organizations, are prey to the need to spend all their money if they hope to be refunded at the same level for the following year. If they have any left over, they'll do their best to use it before the fiscal year ends. This sometimes creates opportunities to apply for unspent public money toward the end of the fiscal year.

How do you position your organization to acquire public funding?

Eligibility

First, as mentioned above, you have to be eligible to receive public funding. Eligibility requirements often vary somewhat from one agency to another, but the following are usually necessary.

• 501(c)(3) tax-exempt status. Most organizations directly funded with public money need to have this non-profit standing. You'll almost undoubtedly need state tax-exempt status as well, which requires a separate procedure.
• Appropriate administrative and organizational structure. Most publicly funded organizations are required to have an administrative structure that can properly manage the grant and the proposed program or activity. In addition, most public funders require a Board of Directors, and many require a community advisory board as well. (In some cases, this advisory board may be the Board of Directors, in other cases, it specifically may not.)

An appropriate structure may also mean that you have to be a certain type of organization to be eligible for the funding in question. In some states, only certain types of organizations can apply for funding for particular services: community health centers in some states can only be run by hospitals, for instance.

• Staff with appropriate credentials and training. Many, if not most, Requests For Proposals (RFPs) ask for staff resumes, to assure that services will be delivered and supervised by competent people. Depending upon the program, that may mean that your staff needs to include at least one MD, Ph.D. psychologist, or LICSW; or that your staff members need long experience in street outreach, alcohol education, family therapy, or some other field.
• Proper money management, bookkeeping/accounting, and audit procedures. Government agencies are very concerned that taxpayer money be spent properly, and that organizations be held accountable for their spending. That means you must have the capacity to budget appropriately, spend according to the budget, and keep track of every penny you take in and spend. You must also have records which are kept in a standard manner and which can be formally audited every year. If you receive over $25,000 in public funds, you are subject to a particularly rigorous A-133 audit, and you have to be able to produce all the financial and other information that audit requires.
• Compliance with ADA (Americans with Disabilities Act) regulations. Handicapped accessible space and/or the ability to include and serve individuals with disabilities are required by public funders.
• A good track record. If your organization has been around for a while, you'll probably have to prove that you've been successful at what you do before you can gain access to public money.

If you don't meet all of these eligibility requirements, you still might be able to apply for public funding. You might, for instance, be able to partner or subcontract with another organization that does meet the requirements, or share staff members with specific credentials. You might also receive provisional funding if you can show that you are in the process of becoming eligible, and agree to complete the process by a specified date.

Relationships

There's more to getting your organization in a position to acquire public funding than simply meeting eligibility requirements, however. Public money for a given service or activity may be available each year, but it may also generally go to those organizations which have been funded before. In other words, it may be hard to break in. Especially if you're a new organization, you'll have to make yourself known to policy makers, funders, and others in your field. The name of the game is networking:

• Establish relationships with your federal and state legislators and/or their aides, and with local officials. Make appointments to talk to them about what you do, and show how your work meets their and their constituents' needs. Invite them to visit your organization and watch it in action. You can help to educate them about your issue. In turn, they can inform you about funding availability, get you through the 501(c)(3) and state tax-exempt processes, and help you make your case with funders.
• Establish relationships with individuals at agencies that might fund you. Ask for their help in getting eligible, let them know about your work and why it's praiseworthy, and get to know them as human beings. It's much easier to deal with a bureaucracy in the form of the real people who staff it, and they're more likely to take your application seriously if they know and respect you.
• Attend meetings, conferences, etc. where you'll meet others doing the same work you do. The more people you know in the field, the more legitimate you'll seem in their and funders' eyes.
• Join coalitions and collaborate whenever you can. It will improve your organization, make you friends and contacts, and establish you as someone people want to work with.
• Volunteer for committees and task forces you're interested in, and take (and carry out) responsibility.

All of this will not only bring you friendships with a lot of interesting and like -minded people, but will put a face on your organization, give you personal connections when you need them, and ultimately help you get a foot in the public funding door.

How do you apply for public funding?

The RFP process

Public funding of all sorts is almost always offered in a Request For Proposals (RFP) process. A government agency or office either decides or is mandated by law to spend a portion of its money for certain services or programs. The agency drafts an RFP, and sends it out to reach as large a number of potential applicants as possible.

The character of an RFP depends largely upon how well the agency understands what it wants, and upon the person who writes it. The better and more clearly it's written, the easier it will be to respond to... but it won't be clearly written unless both the agency and the writer know exactly what they're asking for. Unfortunately, in some cases, the writer may have no background or expertise in the area in question, and the RFP may be confusing, repetitive, or downright incomprehensible. In that circumstance, it is often helpful to call the agency and ask questions about points you don't understand or which seem contradictory. You'll probably find that you're not the only caller; if there are enough questions, the agency may set up a hotline or issue a clarification.

Your organization needs to respond to the RFP: i.e. to write a proposal telling the agency what you want to do, how much it will cost, and exactly how you plan to spend the money. The RFP explains what services or programs the agency wants; how much money is available; who is eligible to apply; what the deadlines are; what information applicants need to submit; and, often, what their proposals should look like. Each of these pieces implies a decision or action for your organization.

• The services or programs desired. If your organization is already doing exactly what the RFP is asking for, there's no problem here. But if the RFP would require you to change what you do or start something new, it will take some serious thought.

You'll have to create something that will both meet the criteria of the RFP and mesh with what you're already doing. Is that possible? Can your organization sustain such activities administratively? Do they conform to your mission and philosophy? Are they as effective as, or more effective than, what you've been doing? If the answer to any of these questions is no, you need to consider carefully whether you want to apply for this money. If the answer to more than one is no, you either need to get extremely creative, or not apply.

• The amount of money available. Is there enough money to fully fund what you are asking to do? If not, you need either to adjust your proposal, or to reconsider your application.

Regardless of the money available, you may not get all you ask for if you do get funded. Can you live with that? Could you scale down your proposed activities to fit a smaller budget, and still be effective?

• Who is eligible to apply. Can you meet the eligibility requirements? Will you have to jump through some hoops in order to do so, and are you willing to do that? (See "How do you position your organization to acquire public funding?" above.)
• What the deadlines are. Do you have enough time to put the proposal together? Can you start up at the beginning of the funding cycle if you're successful?
• What information the applicants need to submit. Is all the relevant information available to you? Is someone in the organization capable of putting it all together, writing the various pieces, etc.? Is your organization in fact capable of doing what this RFP is looking for?
• What the proposal should look like. You need to be careful to put together a proposal that is exactly what the RFP asks for. If it instructs you that Appendix A should be the budget, then Appendix A should be the budget, and should be in the form that the RFP specifies. Some agencies are so serious about their specifications that they won't consider a proposal that deviates in any way from the form they require. Others are more flexible, but they include specifications for a reason. The more closely you adhere to the funder's guidelines, the better off you'll be.

Conceptualizing, writing, and assembling a proposal for public funding

There are really three stages to responding to an RFP. The first is conceptualizing what you want to do, how it will work, and how the available funding will pay for it. The second is actually writing the text of the proposal -- the part that describes what you'll do and how you'll do it -- and putting together a budget that describes exactly how much money you're requesting, and how you propose to spend it. And the third is assembling the full package, including appendices (some of which may be specified in the RFP, and some of which may be supplementary material that you're including for information or to strengthen your case), budgets, supporting documents (letters from other organizations endorsing your proposal, for instance), etc.

Conceptualize

This is in some ways the most important step in the process, because it will both determine the worth and effectiveness of what you propose, and also help you understand whether you should respond to this RFP at all. As stated above, if you're already doing exactly what the RFP asks for, then this step is easy. If, as is far more likely, you're doing something that relates to the goals of the RFP but needs to be adjusted to meet them, the process becomes more complex.

If you're doing outreach with homeless youth, for instance, do you have the capacity to take on a program of substance use education and treatment with that population? It will mean changing the focus of at least some of what you do, hiring staff with particular expertise, and possibly changing - and jeopardizing - the relationships you have with the teens you're already serving. You have to decide both whether such a program is feasible for your organization, and whether its benefits would outweigh its costs.

The first step in the conceptualization process is to study the RFP carefully. What exactly are the agency's expectations, assumptions, biases, etc.? Are they close enough to your own so that there should be no serious problem in working with them? And can you come up with something that fits for both your organization and the funder?

If you have questions about whether some of your ideas will fit within the guidelines of the RFP, this is a good time to call the funder and ask. Funders may not be able to answer your question directly - there are rules they have to adhere to in order to avoid the appearance of discrimination or favoritism - but you can usually garner enough information to figure out whether what you want to do is allowable. In addition, it won't hurt to establish a contact at the funding agency, if you don't have one already.

The crucial trait here is creativity. Can you design something that either improves, continues, or dovetails with what you're already doing, and also meets the goals of the RFP? Don't be afraid to try something new -- this may be a tremendous opportunity for your organization to move to a higher level. The planning in this phase should be a group process -- the more heads, the better. Just don't forget to be true to your philosophy and mission as well. The bottom line is never to apply for funding just for the money: if the money doesn't fund something you're already doing or want to do, it could just as easily be harmful.

A key question to focus on here is whether you're trying to get more or more stable funding for something that's already happening, or whether you're planning an entirely new program or service that furthers your mission and contributes to the continuation of your organization. Both take careful planning, but the former can actually be harder, because of the necessity of matching up with the requirements of the RFP.

Write the proposal

You've come up with a program that both works for you and fulfills the conditions of the RFP; now you have to describe it convincingly to the funder. The first step, an absolutely essential one, is to find a proposal writer who can write well and clearly. If no one in the organization is a capable writer, it may be worth it, if the grant is large enough, to hire someone knowledgeable in the field to write, or at least edit, the proposal. Your application will have a much better chance if it 's in easy-to-read, graceful prose that says exactly what you want to say and responds accurately to the RFP. A well-written proposal is usually worth its weight in gold.

It is possible to have more than one person do the writing, but they all have to be able writers, and they have to work together closely so that all sections of the proposal are as well-coordinated as if they were written by one person. It has to flow smoothly from section to section.

Some general rules for writing a proposal:

• Study the RFP, and respond to it precisely as it asks you to. Use the RFP's format for the proposal (i.e. number and/or head the sections of your proposal to correspond to numbering and headings in the RFP). For instance, if the first question it asks is "What is the mission of your organization?" then that's the first question you answer. Use the question as your header for that section of the proposal.
• Answer questions directly and as clearly as possible. If you have questions about what information is needed, as might be the case if the RFP is badly written, ask your contact at the funding agency. (And make sure you have a contact at the funding agency.)
• If there are rules for page limits, type size, margins, spacing, page formats, etc., keep to them strictly.
• If there are no page limits, try to be as brief as you can and still get your message across accurately. Staff members at the funding agency may have 20 or 30 -- or more -- proposals to read and evaluate. It's unlikely that they'll give you extra points for sending them 40 pages of explanation.
• Be absolutely explicit about what you want to do and how you'll use the money. Don't just describe your organization or program; describe the exact services or activities you're going to provide.

If you're running a Certified Nurse's Aide training program, for instance, don't just describe it as "48 weeks of CNA classes for a total of 72 students." Instead, be as specific as possible:

"Job training for Certified Nurse's Aide: 6 classes, 3 to take place July-December, 3 to take place January-June; each class 12 hours (three 4-hour classes) per week for 24 weeks (total 288 hours per class), 12 students per class. Each class includes a 6-week, 10-hour per week practicum for each student."

• If the deadline allows it, leave yourself at least twice as much time to complete the proposal as you think you need. If you have to rely on another individual or organization for information, or for completing parts of the proposal, double the lead time again.
• Check any numbers (budgets, cost per person, number of hours of service, etc.) at least three or four times. You can't afford a mistake, and there are plenty of opportunities to make one.
• Many RFPs provide a checklist to help you make sure you've finished and included everything required. If there's no such checklist, make one for yourself and use it. It could be invaluable, especially at the last minute.

Ultimately, a proposal is a sales pitch. The better it's presented, the more clearly you can put forth your ideas and your program or activity, the easier it is to read and digest, the more likely the funder is to buy.

Assemble the whole package

In addition to the proposal narrative and the budget -- the parts discussed above -- funders may require a large amount of other information, documentation, forms, and support (one proposal the author recently wrote asked specifically for several forms and 14 appendices). Including all these, in the order requested, can be as important as writing the proposal.

Putting the final version of the proposal together can be a nightmare if you have to do it at the last minute, hours before the proposal is due. If you take some time early in the process to think about this step, you can anticipate and avoid problems, and get it done well before the deadline.

When you first read the RFP, take careful note of:

• The actual deadline. It may not be simply April 12, for instance, but noon on April 12. The difference between a proposal due at noon and one due at 5:00 p.m. on the same day may be crucial as you put everything together. There may also be a distinction between the mailing deadline and that for receiving the proposal (e.g. mailed proposals must be postmarked no later than April 10), which alters the equation in yet another way if you're not hand-delivering it.

It's a good idea to make sure you have backups for everything you'll need. If your organization has only one computer, for instance, make arrangements to use someone else's if yours fails, or have someone bring one in from home. The level of panic that can set in when the computer fails halfway through the final draft of a proposal isn't pretty, and is not something you need to experience.

Backups extend to written material also. If, as is likely, you're writing the proposal on a computer, save regularly -- every 10 or 15 minutes -- to a cloud server or external hard drive. If you're not using a computer, make copies of everything you do -- everything, even notes. You won't be sorry.

• The required form of the proposal. RFPs often specify the material on the cover page and how sections of the proposal need to be separated, etc. If there are things you need to make arrangements for, take care of that now. If there are things you can do beforehand, such as the cover page, separation pages for appendices, etc. you can do that now, too.

If you're really well organized, you can actually be creating a system that you can use for submitting future RFPs as well. It's always easier the second time around, and it's easier still if you have a record of what went well and what didn't.

• What information or other material you'll need to get from outside the organization. Many RFPs ask for letters of support or participation from the community or from other organizations, guarantees of particular services (child care, for instance) from other sources, or commitments to serve on an advisory board. It makes sense to try to get these as early in the process as possible, so that neither you nor the provider of the material will have to rush around at the last minute.

If you're part of a larger organization, you may need signatures, permission, review of your budget, etc. from within your organization before the proposal goes out. You need to figure in the time this will take, and move your writing deadline closer so that you can submit a complete proposal for internal processing in time to meet the funder's deadline.

• What, if any, forms have to be filled out and included. Make sure that you have them all (RFPs may be incomplete, it may be assumed that you already have the forms, you may have to download them from a website, etc.), and request from the funder any that aren't included or otherwise available. This is also the time to ask any questions you may have about the forms and how to fill them out.
• A checklist, telling you what you need and the order in which to put it. If the RFP doesn't have one, make one now, triple-check it for accuracy, and make sure everyone involved in the process has a copy and knows which items he's responsible for.
• To whom the submission needs to go. If you're mailing it, there's probably a specific address, and a specific contact person, in the RFP. In some cases, copies may have to go to more than one place, or may go somewhere other than to the funding agency. Be completely certain that you're sending or delivering everything to the right places.

As you conceptualize:

• If it's appropriate, assign the assembly or collection of various appendices and other supplementary material to particular individuals, with deadlines well in advance of the final deadline.
• Decide if there are any non-required appendices or other supplementary material that you want to include to strengthen your proposal (letters of support, a Board list, awards your organization has won, endorsements from legislators, etc.). Then, if it makes sense, assign these to people in the same way as the required supplementary material.

Find out from funders, if you can, whether submissions like these will do you more good than harm. Some funders find them helpful and pay attention to them; others are adamant that they want only what they request in the RFP.

• A Table of Contents (without page numbers) may be another piece that can be assembled now. It can help the writer(s) think about the flow of the proposal, and, if there is a length restriction, how much room they have for each section.

As you assemble the proposal package:

• Especially if the proposal is long, make sure you have enough people to collate, but not so many that they get in one another's way.
• Well beforehand, find a space where you can spread out -- it may be a corridor, someone's apartment, your office, whatever -- and easily assemble the pieces.
• One person -- usually the proposal writer, but it could be someone else -- needs to be in charge of the distribution process. That person should confirm all the parts of the proposal against the checklist, make sure all the collators know what they have to do, see that pages are numbered correctly (often a last-minute job because things keep changing as the deadline approaches), etc.
• Be certain to save copies for the organization. If you don't get funded, you can still probably use the text in other proposals and presentations. If you do get funded, you'll need to refer back to the proposal continually.
• Know how you're going to get the proposal to the funder. Will it be hand-delivered? Go overnight or regular mail? Can it be sent electronically? Whatever the method, you should be ready to get it there on time.

If you mail your proposal, always send it Certified Mail, Return Receipt Requested, so that you can confirm, if the funder loses it (and this happens more often than you might think), that you sent it, and that it was received on time. By the same token, if you hand-deliver it, be sure to get a receipt with the date and time on it.

• Once the proposal has been sent or delivered, celebrate! Proposal writing is stressful and difficult -- you owe the organization a party, a day off, or some other indication of a job well done.

What do you do if you're successful?

Applying for funding is only the beginning of your relationship with a public funder. If your proposal is accepted, there's still a lot of thinking and work to do before you start your program and once it's running.

Grants, contracts, and financial survival.

Public money may come as a grant or a contract. The difference is that grant money is usually allotted either at the start of a program, at regular intervals throughout the year, or as you need it. You get the money from the funder, and then you spend it.

In the case of a contract, you're generally expected to spend the money first, and then bill the funding agency for reimbursement for what you've spent. If the funding agency is local, this may be a matter of writing a payroll check on Friday and getting a check back from the funder the following Wednesday. If the funder is the state or the federal government, you may wait weeks or months for your reimbursement. Unless you have enough cash flow -- money that you can actually get your hands on, as opposed to what you're owed -- to cover running the program until you get paid, you could find yourself in a deep hole.

Make sure you understand what the payment method is, how long you'll wait for a check once you've applied for a payment on either a grant or a contract, and what your and the funder's obligations are as far as money is concerned. Make sure also that you can survive financially under the arrangement. If it's going to cause more problems than it solves, you might reconsider whether to accept the money.

Legal agreements.

Whether you receive a grant or a contract, you'll almost undoubtedly be asked to sign a standard legal agreement or contract which lays out, among other things, the circumstances under which the grant or contract can be discontinued by either party, what you'll be obligated to pay back if you fail to complete the work or spend in other than the agreed-upon ways, how long you have to keep records, etc. These documents are usually long, printed in 8-point type, and written in legalese, so they're incredibly hard to read.

Do not sign such an agreement without reading it. If you have trouble understanding it, find help, either from the funding agency or from a lawyer (you may have one on your Board of Directors: situations like this are exactly why you should.) If you have questions about or objections to any of the provisions in the agreement, you should talk them out with the funder before you accept the money.

Funder's procedures.

Most public funders have particular procedures for handling money and other issues. You need to be sure you understand and can both live with them and carry them out.

• Accounting. Your books must be in a form that the funder considers acceptable, and that will capture the information the funder requires. This generally means that you can keep track of this particular grant or contract separately, and report and document exactly how you've spent the money for it. The funder will also want a copy of your last audit report.
• Spending deadlines. Virtually all public funding agencies require that the money be spent in the period for which it's allotted, usually the fiscal year. Any money unspent at the end of the funding period has to be sent back. (This is why so many organizations "dump" money on supplies, materials, and equipment on June 29.) There may be earlier spending deadlines for some specific funding categories as well (no equipment purchases after May 1 without permission, e.g.).
• Restrictions on spending. You will have to submit a line item budget -- a budget detailing exactly how much you intend to spend on each expense category (salaries, telephone, materials, etc.). There may be specific categories you can't spend this grant on. Once you and the funder have agreed on a budget, you'll be held to it, and you'll usually need the funder's permission to change it significantly. It's your responsibility to know your overall organizational budget well enough to negotiate a feasible budget for this grant or contract.
• Budget changes. Most agencies understand that things can change over a year, and allow some flexibility in budgets. They may allow you to make some changes without permission (changing a line item by up to 10%, for instance), and will probably let you negotiate larger changes over the course of the year. These changes often have time limits, however (e.g., no changes after April 30), and shouldn't be left to the last minute.
• Reporting. The bottom line is whether you deliver whatever you've promised, and funders usually have some procedure for finding that out. They may want either numbers (participants served, average length of stay, hours per successful intervention, etc.) or some other information, or both. You may be required to report electronically, to fill out forms by hand, to undergo site visits, to write progress reports, to submit documentation (of participant attendance, for instance), or some combination. Reporting may be monthly, quarterly, or annually. In any case, you need to provide for it, and to understand what it will cost in staff time, equipment, and program disruption (It's best if you can plan for this before the proposal is even written). You also need to consider whether the funder is asking for confidential information, and how that affects your organizational policy on confidentiality.

Scope of work issues.

The term "scope of work" is often used by funders to refer to what the funded organization actually will do. You and the funder obviously need to agree on what this means for your particular grant. Exactly what services do you intend to deliver, and to whom? You covered that in your proposal, of course, but that may not be the final word. The funder may accept your proposal, but ask you to change some things about it. Your organization's circumstances might have changed since you wrote it, and you might want to try a somewhat different approach. Or the funder might offer you a smaller amount of money than you asked for.

Scope of work issues can include a number of things. Some of the most common are:

• The amount of service you're asked to deliver for the money. In your budget for the proposal, you've figured out what it costs you to provide service. If you're being offered less than you think it's going to cost you for the service requested, that's a serious problem. To convince a funder that you either need more money or you can only offer reduced service, you'll need to be able to back up your assertions with numbers and a convincing argument. But if you can't convince the funder, you may be stuck in a situation that will cost your organization money, unless you turn down the grant or contract.

Although it's been said elsewhere in this section, it's worth repeating here that you need to make sure you can afford the grant or contract that's offered. Sometimes organizations take grants that they know they will have to supplement themselves, just to be able to provide the service, or to establish a relationship with the funding agency. If they're doing it intentionally, and they have the extra money to cover what they're doing, that's not a problem. But accepting funding that places you at financial risk is a problem, and won't help your organization in either the short or the long run.

You have to examine carefully what the funder wants. Something as seemingly simple as reporting requirements can be the financial straw that breaks the organization's budget, if it means you have to hire someone to do data entry. Extra administrative burdens are another, often hidden, source of costs. Don't let yourself be trapped in a situation that costs you money rather than helping to stabilize your funding.

• The amount of leeway between what your proposal promises and what you have to deliver. If, for instance, you're running a job training and placement program, how many trainees will you have to place in jobs? No agency will expect you to place 100%... but they won't expect you to place only 10%, either. What is an acceptable percentage? It's important to work this out with the funder beforehand.
• The amount of time it might take for a participant to complete a program. If the program is simply a course that lasts for a specified amount of time and is then over, the answer is obvious. But if the program is one of community immunization, or of teaching immigrants English, the time needed depends on a lot of other factors: the receptiveness of the community, the educational backgrounds of the immigrants, what participants experience in the rest of their lives, etc. If the funder's time expectations are unrealistic -- wanting immigrants who can barely read in their own language to become literate in English in six months, for instance -- you need to make that clear, and set up realistic expectations that both you and the funder can agree on. Otherwise you're setting yourself up for failure.

Don't be afraid to negotiate with a funder about these and other issues. They may involve the integrity of your organization, or the difference between doing a mediocre job and doing an outstanding one. You're the expert, after all -- that's why the funder asked you to do this work.

Diversification of funding.

As we discussed earlier in this section, public funding can be very stable, or not stable at all. It also may come with restrictions and regulations that make it difficult to do some of the things you want to do. The wise course is to try not to depend too greatly upon it. In the words of an old pun, "Don't put all your begs in one ask-it."

Your organization will probably be best off if it has many sources of funding. The most desirable is money that comes with no strings at all -- from community fundraising or memberships, for instance -- but it's unlikely, unless you're quite small and willing to stay so, that you can raise enough no-strings money to run your organization. The optimal situation will most likely be one in which pieces of your funding come from several different layers of government, from private foundation grants and community organizations, from community events and fundraising (including membership), and from business and industry partners (perhaps as fee-for-service). If your funding is diverse enough, then losing one piece of it won't be a disaster. It can be replaced with something else, and the organization can continue doing what it was founded to do.

In Summary

Public funding -- money that comes from public revenues at the federal, state, and local levels -- can be a secure source of funding for your organization. In order to take advantage of it, however, it's important to understand its drawbacks as well as its positive side. On the one hand, it's probably the largest potential funding source available, can be a much longer-term prospect than other funding sources, and may be earmarked for exactly what you do. On the other hand, it can come with restrictions, procedures, and bureaucratic hassles that challenge your mission and make your life complicated and difficult. You have to weigh the positives and negatives, and decide whether public funding is right for your organization.

Once you've decided to apply, your first hurdles are learning about the availability of appropriate funding for your organization, and making the organization eligible to receive it. Networking can also be important in positioning yourself to acquire public funding. Then there's the small matter of actually going through the Request For Proposal (RFP) process, and writing a proposal that gets funded. Each of the three steps in this process -- conceptualization, writing, and assembling the final product -- has its own tasks and pitfalls, and needs to be approached in a way that addresses them.

Finally, if your proposal is accepted, you still have to negotiate a contract or grant agreement that actually allows you to provide the services the community needs, both programmatically and financially.

If you can successfully make it through this process, then you might end up with a major piece of stable funding that will help you further the mission and philosophy of your organization for years to come.

What is public funding?

You know that public funding is:

___Funding from the public treasury, i.e. taxes and other government revenues.

___Federal funding

___State funding

___Local funding

Why should your organization apply - or not apply - for public funding?

You know that among the advantages of public funding are:

___Public funding often represents the largest amount of money available to fund organizations and initiatives.

___Public funding is often more reliable and more long-term than private funding.

___Public funding is often appropriated specifically for what your organization does.

___Public funding gives your organization more credibility in the community.

___Public funding may make it easier for your organization to gain funding from other sources.

___Public funding is subject to advocacy, and therefore you may have some influence on how much of it is available.

You know that among the disadvantages of public funding are:

___Public funding proposals may be extremely time-consuming and difficult to write.

___Public funding may come with lots of conditions attached.

___Public funding requires strict accounting and audit procedures.

___Public funding, because of its restrictions, may not allow you to do what you want to do, or may conflict with your mission and philosophy.

___Public funding may be administered by a bureaucracy that is unresponsive, ignorant of the important issues for your organization, rule-bound, and/or difficult to deal with.

___Public funding payments may be slow in coming, either because funding agencies are inefficient or unresponsive, or because the government isn't getting money to them.

___Public funding can get cut or run out if the economy is bad, or if fashions in funding change.

How do you find out about the availability of public funding?

You know that:

___Federal, state, and local agencies usually send notices of funding possibilities to everyone on their mailing lists.

___The Federal Register, a weekly publication, publishes all federal grant notices , with appropriate information and deadlines.

___Check federal, state, and local government websites.

___The newsletters and journals (print and electronic) of professional associations , community coalitions, and other groups often publish funding information.

___Establishing and maintaining contact with individuals at potential funding agencies and town and county offices will ensure that you get information.

___Becoming part of a larger network of community-based, non-profit, and other organizations and agencies will gain you funding information.

How do you position your organization to acquire public funding?

___You know how to become eligible:

• 501(c)(3) tax status
• Appropriate administrative and organizational structure
• Staff with appropriate credentials and training
• Proper financial management, bookkeeping/accounting, and audit procedures
• Compliance with ADA (Americans with Disabilities Act) regulations
• A good track record

___You understand the need to establish relationships

• Establish relationships with federal and state legislators and/or their aides, and local officials
• Establish relationships with individuals at agencies that might fund you
• Attend meetings, conferences, etc. where you'll meet others doing the same work you do
• Join coalitions and collaborate whenever you can
• Volunteer for committees and task forces you're interested in, and take (and carry out) responsibility.

How do you apply for public funding?

___You pay attention to the information in the Request for Proposals (RFP).

• Services or programs desired
• The amount of money available
• Who is eligible to apply
• What the deadlines are
• What information the applicant needs to submit
• What the proposal should look like

___You conceptualize the proposal

• Study the RFP
• Get creative with what you propose
• Be true to your mission and philosophy
• Assemble a reasonable budget for what you're proposing

___You write the proposal

• Find a good proposal writer
• Respond to the RFP precisely as it asks you to
• Answer questions as directly and clearly as possible
• Follow format rules
• Be as brief as you can and still get your message across accurately
• Be explicit about what you want to do and how you'll use the money.
• If possible, allow plenty of lead time to complete the proposal
• Check any numbers several times for errors
• If a checklist is provided, use it; if it's not, make your own

___You assemble the proposal

• Start planning when you first read the RFP
• Assign tasks as you conceptualize
• Do everything you can beforehand
• Make sure you have enough time, space, hands, and equipment to assemble and check the proposal, and deliver it on time

___You celebrate after the proposal has been delivered

If you're successful

___You understand the mechanics of the grant or contract, and be sure you can make it work financially

___You understand any legal agreement fully, and negotiate any questionable points before you sign it

___You make sure you understand and can live with the funder's required financial and reporting procedures

___You negotiate the scope of work if necessary, to be sure you can deliver what 's promised

___You diversify your funding

Let’s dream a little. You’re the director of a small or medium-sized community-based organization. Like all such organizations, it’s strapped for money, and you’ve been spending most of your time looking for funding, both from state agencies and from the community. Then, one morning, you get a phone call.

It’s an attorney with a wealthy client who’s looking for an organization to which to donate a large amount of money...a large amount of money. What kinds of plans do you have to handle such a donation? If you can offer something attractive, his client would be inclined to give you a gift considerably larger than any you’ve imagined. Would you be ready with an answer? More to the point, what would you do with a very large donation?

Large non-profit organizations and institutions – nation-wide charities, universities, hospitals, large churches – look for and receive major donations, sometimes in the millions of dollars. They know exactly what to do with them:  Some of the gifts go to specific programs or needs, but more go into an endowment that supports the organization or institution over the long term, or into planned giving arrangements that allow donors to use their charitable contributions as investments.

Although universities and other large non-profits have the resources to maintain development offices to find and manage major contributions, smaller entities may still be able to provide major donors with some options – and in the process provide themselves with the resources to sustain their work despite the ups and downs of funding.

This section is about endowments and planned giving arrangements – two types of long-term funding that can benefit both donors and the organizations that receive their gifts. We’ll look at what they are, how to establish and administer them, and also consider how to persuade donors to contribute to them.

What are endowments and planned giving arrangements?

Before we begin, two disclaimers:

1. This section will help you understand what endowments and planned giving arrangements are, as well as some of the possibilities they may offer for your organization. Be aware, however, that federal and state tax laws and the state laws regulating (or not regulating) these arrangements are complex, and the Community Tool Box does not mean this section to be more than general information. If you want to set up an arrangement for large donations, we strongly advise you to do it with the help of someone who knows the territory – a development professional, an investment analyst, a lawyer, or an accountant who’s actually had experience creating and working with these kinds of plans.

Be aware also that in order for donors to benefit from the tax advantages that many of these plans offer, your organization or institution has to have 501(c)(3) or other appropriate non-profit tax status from the Internal Revenue Service. Not every non-profit status is eligible, and you should make sure that yours is one that allows tax deductions or credits for donors. (The IRS website, has information on which designations qualify for tax-deductible contributions.

2. In general, endowments and planned giving arrangements work best when there are major donors available, and when an organization has the resources of knowledge, personnel, and finances to set them up, manage, and maintain them. Those basic requirements usually eliminate small grass roots organizations...but not always.

Although most of the information in this section is more likely to be useful to large organizations with relatively sophisticated financial capabilities, there is at least one possibility here for small organizations as well. A community-based organization may only need two or three gifts that would be considered small by a university or museum in order to put together an endowment that will yield a few thousand dollars a year, and make the organization’s life a great deal easier. A few gifts of between $1,000.00 and $10,000.00 – not totally impossible for a small organization, although not easy, either – donated over time and left to grow for ten years or so, can produce enough income to make a real difference in the extent or quality of the work the organization can do.

That said, the amount of work involved in planned giving arrangements, the regulations governing them, the investment skills needed to make them profitable, and the fact that they need a considerable amount of capital to get them started usually make them more than a small organization can or should handle. Working to create an endowment, or persuading local donors to name the organization in their wills may well be worth the effort; trying to take on planned giving probably is not.

(A possible exception is an arrangement whereby a number of smaller organizations join forces to create a joint planned giving program. Such a group could hire a professional or a firm to set up and manage the fund, and could split the income from it according to some formula that they had worked out beforehand, or according to the wishes of donors. This is similar in some ways to a community foundation, which both solicits contributions and manages or receives large sums from small foundations or individuals, which it then distributes to local organizations. The difference is that the group that offers the planned giving program would reap all the benefit, rather than having to apply for funding, as it would with a community foundation.)

• Endowments.  An endowment is, quite simply, a fund built up from donations (or sometimes from a single large donation) to a non-profit. The principal (the original sum) of the fund is invested, and the income is used to fund the activities of the organization or institution. Usually, some of the income is also reinvested, allowing the principal to grow, so that the endowment becomes larger over time, and produces more income.

An endowment may benefit the whole organization or institution, or it may be earmarked for a particular program or activity. In a university, for instance, particular professorships may have their own endowments (usually the gift of a single donor). In a hospital, the cancer clinic or research on diabetes treatment may be supported by an endowment intended only for that purpose.

Large institutions often offer donors the option of contributing to the general endowment or to one of several more narrowly focused ones. Major donors may have their own ideas about what they want to endow, and it is unusual (although not unknown) for an institution to turn away money that a donor earmarks for her own pet project. (It is not unusual, however, for a major donor to have the program or building or professorship that her gift made possible named after her or someone she designates.) Among the conditions that a donor might place on an endowment contribution are that the income should not be used until the principal reaches a certain amount, or that a certain percentage of income has to be spent (or, alternatively, reinvested) each year.

A gift to an endowment might take any one (or more) of several forms:

• Cash
• Securities (stocks and bonds.)
• All, or a percentage of, the income from a property or concession (rent from a large office building, income from a producing oil well, etc. In such a case, the donor would retain ownership of the property or concession, and the donation might be time-limited – perhaps, for instance, going back to the donor’s heirs at her death.)
• Real estate (buildings or land or both.)
• Personal property (artwork, collections, antiques, or other valuable items.)

The timing of a gift can also take a number of forms:

• A one-time lump sum.
• Stretched out over several years for tax purposes (more about this later).
• A bequest in a will, starting only at the donor’s death.
• Time-limited (ending with the donor’s death, or after a specified number of years.)
• Only available when the principal reaches a certain level
• Different types and timing of gifts have different financial advantages or disadvantages for the donor, which is why most non-profits are at least somewhat flexible in what they will accept and how it can be used.

Endowments are not kept in savings banks. They’re invested for growth. Large endowment funds (that of Harvard University was over $34 billion at the beginning of 2008) employ many investment managers who constantly buy and sell stocks and bonds, and make other investments. If they’re well-managed, these endowments can grow by an average of 5-10% a year. (That means that some years they may not grow at all, or even shrink, and other years they may grow by much more than 10%.)

The growth of an endowment is partially determined by investment strategy, and partially by how much income is reinvested annually. Conservative funds – those that try to ensure that their funds grow safely, if slowly, despite changes in the market – typically spend about half their income and reinvest the other half.

• Planned giving arrangements.  A planned giving arrangement is a way for a donor to have his cake and eat it, too – at least some of it.  It allows him to contribute to a non-profit organization or institution (for, according to the government definition, charitable, educational, scientific, literary – including the arts – or religious purposes) and receive from his donation, for himself and/or another designated person or people, an income for life or for a set period. The donor gets a tax break and ongoing tax advantages, as well as a reliable income. The charity gets to invest the money, and, usually, to keep whatever’s left after all the agreed-upon payments have been made.

There are several different kinds of planned giving arrangements:

• Charitable gift annuities (CGAs). A donor’s irrevocable (non-returnable) gift to a non-profit, only part of which is a charitable donation, furnishes one or two people (usually the donor and her spouse, but it could be anyone the donor chooses) with an annuity (a fixed annual income) from the time of the gift or some agreed-upon later date until the death of the longer-lived person.  The amount of the annuity is a percentage of the original donation (minus the amount recorded as a purely charitable contribution), determined actuarially by the age(s) of the beneficiary(ies) at the start of payments.

Actuarial determination. An actuary is a mathematician who works with statistics, particularly the statistics having to do with lifespan and life insurance issues. Actuaries (or people who know how to use actuarial tables), using the records of average life expectancy for men and women of different ethnicities and races in different places and at different ages, can figure out, on the average, what percentage of a gift will yield a reasonable amount for the non-profit after the beneficiary’s death. Life expectancy is based on gender, place of birth, place of residence, ethnicity, race, age, and other factors. Women, at least in the U.S., live about two years longer than men, on the average; a person born in the 1980’s has a longer life expectancy than one born in the 1940’s; your chances of living to 85 increase after you reach 65. Using these kinds of statistics, actuaries are able to develop formulas for annuity payments, life and health insurance costs, and other similar arrangements.

At the death of the last beneficiary, what’s left of the principal (some states require that it be at least 50%) goes to the non-profit. The donor and the organization sign a contract with all the details of the CGA spelled out, and the document is legally binding on both parties.

To make this a little simpler, let’s look at a fictional older couple. Gus and Tillie Brown, who met while attending State University in the 1950’s, have a great fondness for their alma mater. Life has been good to them, and the considerable amount of money they’ve made has been increased by careful investment. Gus and Tillie, who are childless, would like to share their wealth with State U., but want to make sure that they have a guaranteed income as well. They decide on a charitable gift annuity of five million dollars: one million as a direct donation to the university, and the rest to fund an annuity for them. They’ll get a tax deduction for the donation, but not for the annuity fund.

Given their ages – 72 and 74 – their payout rate of 5.8% would yield them about $230,000.00 a year. (See the table of rates recommended by the American Council on Gift Annuities.) At the death of whichever of them lives longer, whatever’s left of the original four million dollar annuity fund goes to State U. They could decide later to add to the annuity fund, which would both increase their income from it and also probably increase the amount that State U. would receive after they were gone.

• Charitable remainder trusts. With his gift, the donor sets up a trust that gives him an income for life, or for a set term. At the donor’s death or the end of the term (whichever comes first), the non-profit gets whatever is left in the trust. There are two types of charitable remainder trusts:
• Charitable remainder annuity trusts (CRATs). The trust pays the donor a set amount per year (either a specific dollar amount, or a percentage of the original value of the trust, as with a CGA).  Because the payment is fixed, the trust can’t be added to.

Another possibility for Gus and Tillie would be to set up a charitable remainder trust. This could work for them in almost the same way as for a charitable gift annuity, except that they wouldn’t have to make any of the gift as a direct donation. All five million could be part of the annuity. The Browns’ payout would be a bit higher (because of the extra million dollars) if they received the same percentage of the trust’s value as with a CGA, but they couldn’t add to it later. Their tax consequences would be different from those of a CGA aswell

• Charitable remainder unitrusts (CRUTs). The trust pays the donor a fixed percentage of the trust’s fair market value each year. If the value of the trust increases in a particular year, the payment to the donor increases also; the payment decreases if the trust’s value goes down.

If Gus and Tillie expect the value of their gift to increase over time, they might choose to put their five million dollars into a charitable remainder unitrust. If the five million dollar investment increases in value by 7% a year, for instance, they’ll be collecting nearly $600,000.00 annually by the time they’re in their mid-eighties. They could add to the principal later if they chose, and, of course, in addition to either a CRAT or a CRUT, they could still choose to make a direct donation to State U.

• Charitable lead trusts. A charitable lead trust is similar to a charitable remainder trust, but works in exactly the opposite way, timewise. A donor’s gift funds a trust that makes annual payments to the non-profit for a specific term or for the donor’s lifetime, after which the balance goes to the donor or her heirs.

If Gus and Tillie wanted to leave a considerable amount to their nephew, Charlie, they might set up a charitable lead trust. This would pay State U. a specified amount for their lifetimes, making them major donors, but at the death of whichever of them lived longer, Charlie would receive whatever was left in the trust.

• Pooled income funds. A pooled income fund is essentially a mutual fund run by a non-profit. Donors contribute to the fund, and receive payments out of the interest it generates, depending on how many shares they hold (based on the size of their gift). Since their income comes only from the interest, donors receive full tax credit for the amount they invest. They can continue investing (and thus increasing their shares and income) as much as they choose to. Whatever they invest remains the property of the non-profit.
• Life insurance policies.  Donors can make a non-profit the beneficiary of their life insurance policies. That gives them tax deductions on both the buy-out value of the policy (what it’s worth if they sell it back to the insurance company) and on any premium payments they make after the donation.

Endowments, planned giving arrangements, and tax advantages for donors. As we’ve mentioned, various kinds of arrangements have various kinds of tax advantages for donors. We’ll talk about some of the less complex here, but for a complete understanding of how tax law affects charitable donations, you really need to confer with a CPA or a tax lawyer.

• Charitable deductions. The least complex and confusing type of tax advantage is a simple charitable deduction. You give a tax-deductible contribution (say, $200.00) to a non-profit, and you can subtract the amount of the gift from the amount of income on which you have to pay taxes in the year you gave it. If your total income is $32,300.00 for that year, you only have to pay taxes on $32,100.00 of it.

You can only deduct up to a certain portion of your income for charitable contributions, but you can defer some of the deduction to future years. If you generously donate all of your inheritance from Grandma’s estate, and it adds up to more than half your income for this year, you’ll probably have to take some of the deduction this year and some next year in order to gain the full tax advantage from it.

If you donate cash (using bills, a check, or a credit card) as a straightforward contribution to a non-profit or its endowment, you get a simple charitable deduction for the amount donated. If, however, you donate something other than cash, things get more complicated.

• Donating securities. There are solid financial reasons why large donors, in particular, often donate securities rather than cash. For one thing, good investments grow far faster than the inflation rate. The value of stock in a successful company (especially one that may just have been starting up when you bought shares) can increase enormously over several years...which leads to a problem. When you sell that stock (and you’re still selling it, even if you use the money to buy another stock in the next minute), you have to pay considerable taxes on your capital gains, the amount of its increase in value since you bought it.

A charitable donation of appreciated securities (stocks or bonds that have gained in value since you bought them, and that you’ve owned for over a year) gives you a double benefit: it allows you to donate a large amount for far less than you paid for it; and you not only pay no capital gains tax on it, but you can take a tax deduction for the full current value of the donation. So... you bought 100 shares of Bob’s Microprocessors at $3.00 a share ten years ago, and they are now worth $300.00 a share – $30,000.00 altogether. You can donate them to your local food bank, take a $30,000.00 deduction on your income tax, and save several thousand dollars in capital gains tax – all for an initial $300.00 investment. (And remember that the food bank can keep or sell those shares without worrying about capital gains, because it’s a tax-exempt organization.)

So far, we’re still keeping it fairly simple, even with the donation of appreciated securities. Donations to an endowment are still just charitable contributions, and donors get straight deductions for them, with perhaps some capital gains tax breaks thrown in. The situation develops another level of complexity, however, when we look at planned giving arrangements.

• Donations of real estate and personal property. Donations of real estate and personal property can be complicated by the fact that their owners benefit if they are undervalued while they own them, and overvalued when they’re sold or donated. If they’re undervalued, they cost less to insure, and property taxes on them are lower. If they’re overvalued when they’re sold, the difference between their value and their sale price is less, thus reducing capital gains tax, and if they’re donated, the tax deduction is larger. For that reason, obtaining a definitive assessed value for tax purposes can be difficult.

The other issue with real estate and personal property is that, unlike securities, there is no way of assuring that the assessed value will be what it’s actually worth to the non-profit. Selling real estate is always tricky. The price depends on the housing market at a given time, the number of other properties on the market, and the actual usefulness of a given property. A huge house with lots of land may be worth a great deal on paper, but may be extremely difficult to sell at any price because of its need for upkeep, its location, its condition, or any number of other factors. Many organizations and institutions refuse to accept real estate at all, because it brings too much uncertainty with it.

Personal property – art collections or individual works, antiques, items of historical value, etc. – can carry some of the same uncertainty. Valuable artwork, for instance, is often sold by one of the big auction houses in New York or London (they get a commission on the amount of the sale). Sometimes, pieces that are expected to fetch enormous sums are sold for far less, and pieces that aren’t expected to go for much money nonetheless do. The assessed value of such items may mean very little until they’re actually sold.

• Planned giving and taxes. Planned giving is designed to have direct benefits for the donor as well as the non-profit, as a result of which not all of the donor’s gift is considered a charitable contribution. With a CGA, for instance, a good part of the gift will go to produce the donor’s annuity. The maximum rate of return, by federal law, must be figured so that the charitable portion of the gift is at least 10% of the total, and a donor can choose to take less than the maximum rate, and thereby take a larger charitable deduction. If the gift is in the form of securities, the donor still doesn’t have to pay capital gains tax on any of it, even the part that isn’t considered deductible.

With a CGA, the whole gift can’t be considered a charitable contribution, because the amount that’s left for the non-profit depends on the lifespans of the beneficiaries, and is bound up in an annuity contract. With a pooled income fund, the whole gift is considered a charitable contribution, because only the interest from the fund is paid out.

Deferred payment adds another wrinkle to the tax advantage fabric. Donors may give their gifts several years before starting to collect their annuities or other payments. Some CGAs, for example, allow donors to begin contributing at age 50, but won’t pay out until the donor reaches at least 60. Depending on their tax situations, how soon they plan to retire, and other considerations, many donors don’t want to begin receiving annuities or other payouts till they’re 65, or even 70 or 75. The longer donors defer payment, the higher the payments, and the better the tax situation (more of the original donation is deductible).

Why would you want to secure endowments or planned giving arrangements?

• As you can probably see already, administering an endowment or planned giving arrangement involves lots of legal and financial responsibilities, as well as endless recruitment of donors. (We’ll cover donor recruitment later in the section.) It means a large amount of work, requires expertise and nerves of steel to deal with the investment world, and entails some financial expense as well.  Why would you want to go to the trouble?
• If you’re a small organization, or have no real need for large amounts of money, you may not want to. These arrangements aren’t for everyone, although an endowment, at least, can be a benefit to an organization of just about any size. You have to decide whether you can generate the resources to make such things work, and whether you can get enough large donations to make your effort worthwhile.

If you can make it work, however, endowments and planned giving arrangements can bring a number of advantages:

• They’re attractive to donors. Among the extras you can offer to donors are:
  • Tax advantages, including the possibility of giving a large gift and getting a good part of it back in tax deductions.
  • Recognition. For very large gifts, donors might have a building or program named after them, but even smaller gifts can mean a name on a plaque or on a listing in a publication, being honored at a reception, or being granted “insider” privileges of some sort
  • The feeling of satisfaction that comes from knowing they’re doing something for the society.
  • A reason to give a large amount. The existence of an endowment and/or planned giving implies that their money will do some long-term good.
  • Some control over what their gift funds. The chance to contribute to – or set up – an endowment for a specific favorite program or activity or project is very attractive to many donors.
  • For planned giving arrangements, the chance to be recognized for giving a gift that they aren’t really giving away till they die.
  • For planned giving arrangements, a steady income for life.
  • The opportunity to give back for valuable experiences or services or benefits.

For example, a successful athlete might be particularly motivated to give to his school’s athletic teams. Someone who conquered a physical handicap might be especially motivated to help the health and human service organizations that once helped him.

The reasons for donating are many and varied.

 If you can learn more about a prospective donor, and what benefits she might want from giving, you can customize an appeal that will help the donor obtain those benefits, and thus be more likely to give to your organization. See also Tool #2 following this section.

• They’re more likely to result in large donations. Major donors often look for these types of giving programs, both for their own benefit, and because they lend legitimacy to organizations that have them. They imply that the organization already handles large amounts of money, and that theirs will be well used.
• You can use the good experiences of donors to attract other donors. You have to manage your arrangements well, but if donors are pleased with how they’re treated and with your work in other areas, they’ll let their friends know, and become marketers for you.
• They give you investment opportunities, and the chance to develop a funding base that will continue to grow.  The old adage “It takes money to make money” is true in investment as it is in business. If you double $50.00, you have $100.00. If you double $50,000.00, you have enough to make an impact on your work.  With a large enough amount to invest, you can use income to fund operating costs, which are often difficult to fund otherwise, leaving you with enough grant money to actually fund programs and pay staff salaries.
• They can make possible programs or opportunities that you wouldn’t otherwise be able to fund. The income you can gain from endowments and/or planned giving can allow you to go in directions that funders may not, and to try out new approaches.
• They can give you the long-term financial security that makes long-range planning more than hope. Knowing that you have funding coming in regularly, and continually gaining more through new donations, can give you more freedom to make plans for long-term growth and organizational development.
• They can free you from the restrictions of public and foundation funding. You probably will never be able to get along without outside funding unless you’re a major private university with many wealthy alumni – and even they depend on government and foundations to fund most faculty research. A healthy independent income, however, can make it possible to turn down funds that aren’t in accord with the vision and mission of your organization, and allow you some freedom from funders whose ideas may not mesh with your organizational culture or philosophy.

When should you try to secure endowments and planned giving arrangements?

The timing of setting up and securing endowments and/or planned giving arrangements is largely a matter of two factors: (a) the capacity of the organization, and (b) the needs of the organization.  If you don’t have, or can’t easily develop, the capacity to market your plans to donors, set up and manage plans properly, and invest the money appropriately, you shouldn’t be trying to go this route yet.  If, on the other hand, your organization has major needs, and outside funding prospects are dim or nonexistent, this may be a good time to look at these sorts of major funding plans.

The capacity to market, set up, and manage arrangements, and to invest the resultant funds, doesn’t mean that the people and mechanisms you need already have to be part of your organization. People can be hired as employees or consultants; work can be contracted out to firms that exist just to carry out these functions. What you will need, however, is a way to pay for these services – or to get them pro bono (i.e, free) – at least until your endowment and planned giving arrangements are well enough funded to be self-supporting. What you will also need is a plan for structuring your arrangements so they’ll fit smoothly into the organization, and systems for making sure that all parts of the organization that need to be are involved, understand what their roles in the fundraising picture are, and have the capacity to fulfill those roles

Here are some suggestions for times when it might be appropriate to set up an endowment or planned giving:

• When you’ve grown to the point that you have, or can buy, the capacity to invest and administer the funds you want to set up.

In the case of an endowment, you may not need a great deal of capacity, depending on the nature of the organization and the size of the endowment. A small community arts organization received a $7,500.00 grant as an endowment for the repair and maintenance of its historic building. The interest couldn’t be used until the principal reached $10,000. The Treasurer of the organization invested the grant in a reliable mutual fund with check-writing privileges, and simply let it stay there. Once it reached the desired amount, the interest could be used for the building, as long as the principal remained above $10,000. That endowment needed only minimal management, and the same might be true for other relatively small endowments to small organizations.

• When you have a base of donors and potential donors that can make it worthwhile to set up endowments and planned giving arrangements. Any non-profit that doesn’t already have a sizeable endowment generally depends on smaller donations to help pay operating and program costs. Large donations, on the other hand, may be more valuable over the long term as income generators than as ready cash.  And it’s the access to those large donations that you need in order to make endowments and planned giving worthwhile for your organization.

That kind of access can be a matter of location. Organizations in rural areas, for instance, know that it’s often difficult to get any number of people to contribute $25.00 a year, let alone $25,000.00, while in urban/suburban areas, where there are both more people and more money, larger donations may be easier to come by.

Access to large donations can also be a matter of connections. If you have someone on your board who can make large donations, or who knows others who can, that may lead to still more. Once again, those people are more common in urban metropolitan areas, where there’s a much greater concentration of business and finance.

Regardless of your specific location, there is always the possibility of attracting donors from a variety of areas. If your organization or institution serves a widespread population, as many educational institutions do, or has widespread appeal (child health, hunger eradication), you may be able to draw donors from many regions

• When you have the capacity – either through volunteers or a development office – to market your program to potential donors. Potential donors won’t ordinarily come to you – you have to go to them.  Before they’ll contribute, they have to know about your giving programs – what they consist of, and how they’ll benefit donors. Marketing is an extremely important part of funding endowments and planned giving arrangements.  If you don’t have a way to do it, it might not be worth the effort.
• When the reputation of your organization or institution is one that will make donors feel that their money is both well spent and well used. For security, donors have to be confident that:
  • The organization will be around for the long term, so that their contribution will indeed be used as they desire, whether or not they’re still alive;
  • They can trust both your management skills and your ethics; and
  • You’ll use their contribution for something they and their heirs can be proud of.

If your organization has an outstanding reputation, donors will feel more comfortable making major contributions.

• When your organization has a need for something that requires a large capital investment. Typical needs of this kind include building programs or long-term expansion plans. Often, an endowment or other major source of investment capital is the best way to raise money for ambitious long-range goals.
• When a specific donor can be identified who is motivated to give to a specific cause. Your free health clinic may need more staff, and a doctor who grew up in the neighborhood or a former patient who has since become financially successful may see this as an opportunity to fund something close to his heart.
• When there is a special opportunity to act, in response to an immediate or unanticipated community need. A disaster like Hurricane Katrina in New Orleans or the 2004 Indian Ocean tsunami, for instance, or an increase in homelessness and hunger in the community can provide the opportunity to seek large donations.
• When funding restrictions from public or private funders make it difficult or impossible to do work that is in the best interests of the community or the society.  Funders’ agendas may be different from yours.  Accumulating enough of your own funds can make possible work that otherwise couldn’t be supported.
• When funding from public and private funders becomes scarce. 

These last two circumstances can result from a number of causes. Political considerations, government budget shortfalls, an economic downturn that reduces the income of foundations and government alike, or a change of government that brings with it reallocated funding priorities can all drastically affect the amount of money available for your work. Having your own sources of funds affords some protection from hard times and self-serving or politically expedient decisions on the part of funders.

Harvard University, for instance, has decided to take no government funding related to stem-cell research, because of ideologically-motivated government restrictions on the stem-cell lines that can be used. Harvard has an endowment large enough to take such a move without fear of the consequences.

How do you secure endowments and planned giving arrangements?

As we’ve discussed, setting up endowments and planned giving arrangements takes some work and some resources. The first step is to assess your organization and determine what’s possible for you. Then you have to set up your financial arrangements, market them to donors, and implement and institutionalize your plan.

Determine whether the arrangement you’re considering is possible for your organization in your community. First, you have to decide whether you have or can get the resources – the finances, the people who understand the process and can run it, the systems to manage it – to sustain what you want to do.  If you decide that the resources are available, you then have to assess the community to determine whether there are enough potential donors to make what you’re aiming at worthwhile.

If you’re trying to put together an endowment, you may only need one or two reasonably generous donors to get it started. If you want to institute a planned giving arrangement, you’ll need many people to participate, an unlikely possibility in a community that’s largely working class or low-income. You’ll have to make sure that the donors you need are out there, and might be willing to contribute. Unless you’re an organization with a proven track record of bringing in large donations, it will probably be worth the effort to do some market research to find out what you need to know. If that research tells you that the potential donors aren’t out there, then you’d probably be wasting your time on planned giving arrangements.

The point here is that setting up and administering planned giving takes far too much work and organization to be run for one or two contributors.  In order for such arrangements to yield good returns, they have to have a fairly large number of donors, each contributing a fairly large amount of money.

Set up your financial arrangements. Once you’ve decided that an endowment or planned giving is a good idea for your organization or institution, you have to create systems to handle the money you raise.

• Find an advisor. At the beginning of this section, we made clear that it’s absolutely necessary to consult with a professional in the field if you’re setting up anything but a small endowment. This may be a board member or friend of the organization who’ll do it cheaply or pro bono (free, as a public service), or someone you hire. Many organizations try to find board members with specific skills to do specific jobs; this may be an instance where that will work for you.
• Determine what level of investment you need. The first task of the advisor is to analyze what you want to do and help you devise an investment strategy that will best meet your needs. Endowments may call for different strategies than planned giving arrangements. Different amounts of money may call for different approaches. Some types of planned giving may demand strategies that maximize the growth of the fund; others may demand strategies that maximize yearly income. A good professional can help you decide what you need, and how best to go about getting it.

Past a certain, relatively low, point, an endowment needs management just as much as a planned giving fund. For a small endowment – again, like that supporting the arts organization’s building – you may not need anything more complicated than an on-line account with a single mutual fund. A larger amount – starting at about $50,000.00 – however, should be managed somewhat more aggressively (balanced among a number of mutual funds with different investment strategies, for instance), in order to ensure a good return. A still larger amount – in the millions – will need day-to-day management of a carefully chosen, balanced portfolio of securities.

Investments can also be high-risk or low-risk. High-risk investments carry the possibility of high returns, but they also carry the distinct possibility of heavy losses. Low-risk investments are more likely to be the tortoises of the market: slow but steady, and producing decent, but not flashy, returns over time. Most large investors – including many mutual funds – maintain a majority of low-risk securities, with a small percentage of higher-risk ones to allow for some high-profit potential.

Please see Tool #1 for some simple, generally accepted common-sense rules for investing.

• If you need them, hire professionals to do your investing. If you’re only dealing with a small endowment, like that of the community organization responsible for the historic building, your board treasurer or the organization’s director may be able to handle it. If you hope or expect that the endowment will be large, or if you offer planned giving arrangements, you’ll almost undoubtedly need professional investment. That may come in the form of someone you hire as an employee (Harvard, with its huge endowment and numerous planned giving offerings, has a large investment office with many employees, some of whom make several million dollars a year as commission on the hundreds of millions in income they generate) or of farming out the job to an investment firm – perhaps one that specializes in just this type of institutional investment, and has systems set up to address some of the financial reporting and other issues surrounding it. Once again, your advisor can help you here.

One of many decisions you may want to make is whether you’ll try to do only ethical investing. Ethical investing, in the investment field, means investing only in entities that do no harm, or actively do good. This means different things to different people, but, in general, it means companies and municipalities (bonds) that are environmentally responsible, that don’t produce harmful or unhealthy products (tobacco, junk foods, etc.), that don’t mistreat or exploit labor in the U.S. or elsewhere, don’t support repressive governments, etc. Some (although not all – it’s wise to check carefully on any firm you consider) ethical investment firms do extremely well financially, allowing investors to prosper without feeling guilty. Some potential donors will find an ethical investing philosophy attractive; others might think it’s misguided or unnecessary. You’ll have to balance a number of factors – organizational philosophy, income needs, potential donor attitudes, etc. – in deciding whether you want to subscribe to such a philosophy or not.

• Set up systems to administer your arrangements. You’ll need systems to track investments, keep the records required by state and federal laws, issue annuity payments on time, etc.  These systems should include red flags that automatically notify people when things have to be done, and also automatically notify the appropriate people if they haven’t been done.  Once again, depending on the size of your operation, you may have to hire one or more people to set up and implement these systems.

Administering these kinds of financial plans can be a major task. Planned giving arrangements, for example, are governed by state laws as well as federal, and state laws vary. In general, you have to go by the laws both of the state(s) in which your plan is located (i.e. your main office, as well as any subsidiary branches or offices that operate the plan) and the state(s) in which your donors live. Universities in particular may have donors from all over the country, and therefore may be subject to the laws of many states simultaneously. They are usually well advised to adhere to the laws of the state(s) that are strictest, so they’ll be in compliance with all the others.

In some states, there is a requirement or possibility of becoming certified as a planned giving provider. This is the time to look into and do that if it makes sense for you. Examine this possibility carefully: there are advantages and disadvantages to it, and you’ll have to decide what works for you.

Information on state regulations and statutes – as well as on practically everything else having to do with planned giving – can be found on the website of Planned Giving Resources, Inc.

• Train everyone involved in investment and plan administration to understand and deal with the particulars of the plans you offer. Whether it’s simply the organization’s treasurer, an existing fiscal staff, or new people that you’re hiring that will be responsible, it goes without saying (but we’re saying it anyway) that they have to fully understand the ins and outs of your financial arrangements in order to do their jobs.

Reach out to and recruit potential donors. The best plans and coordination in the world will do you no good, however, if no one participates in them. You’ll need a recruitment plan to contact potential donors – ideally in person through someone they know – and convince them that your organization is exactly what they want to contribute to.

Universities usually start by recruiting a committee of alumni who are enthusiastic about the institution. This committee then acts as a champion of the fundraising effort, doing the work of reaching out to potential donors, with the support of the university development office.

You won’t get donors unless:

• They know about the organization and what it does (and why they should want to contribute to, or take part in a planned giving plan from, your organization as opposed to another one).
• They know about the giving programs you offer.
• They understand how giving to your organization can benefit both you and themselves.
• They have a positive feeling about the organization.

To inform donors, you have to market both your organization and your giving plans to those who might be inclined to contribute to you. That means using a number of channels and methods, including:

In order to use any of these methods, you have to start with a list of current and potential donors. It should include individuals and businesses that have regular contact with the organization; former participants, beneficiaries, or alumni; names of family, friends, and colleagues submitted by board members, staff, participants, and other friends of the organization; etc. Most organizations, even small ones, have such lists computerized, so they can easily keep track of contacts and update them as necessary.

• Postal and/or e-mail. Use your network to expand your reach here. Sending an informational brochure or letter to this list is one way of reaching a pool of potential donors.
• An organizational newsletter, e-newsletter, or magazine.
• The organization’s website. You can post as much information as you want here, since you don’t have to pay postage or worry about page limits. You can include links by which donors can contribute on line, e-mail addresses of people in the development office who’d be happy to call and discuss giving arrangements, explanations of possible areas of sponsorship, etc. You can include a link to your website in e-mail solicitation.
• Ads in targeted publications, such as alumni magazines, organizational newsletters, magazines covering particular fields, or professional journals. These often include profiles of current donors similar in some way to the readers of the publication.

For the three methods just described, it may be useful to recruit one or two donors who are willing to be used as examples for advertising the benefits of the programs offered. Universities often do this as a matter of course: “Gus Brown, class of ’58, and his wife, Tillie, are collecting a nice amount every year by donating to State U. They’ve purchased a charitable gift annuity from the university, and it’s providing them with a comfortable retirement income while it helps to finance the new Main Campus Science Center. Gus and Tillie have the security of a regular income, and the satisfaction of knowing that their investment is making the world a better place.”

• Phone solicitation. This might be carried out in a small organization using volunteers – participants, board members, and friends of the organization – to call people on the organization’s current and potential donor list. A larger organization might use its own fundraising or development staff, or might hire a telemarketing company to make its calls
• Word of mouth. Board and staff members and donors can be asked to contact directly – either face-to-face or by phone – those potential donors whom they know personally, or with whom they have something in common (college classmates, for example, or people who have jobs similar to theirs).

Volunteers who will be contacting potential donors directly should receive training for the task. Background information on the organization, establishing rapport, what and how to ask (many organizations provide a script for volunteers to use), how to accept refusals gracefully – training in these and a number of other areas will greatly improve your chances for success with potential donors, and leave even those who refuse with positive feelings about the organization.

To the extent possible, all potential donors should be approached in person, ideally by someone they know. If that’s not possible, make sure any personal approach is made by someone who is tactful, knowledgeable about the arrangements you’re offering, persistent (but not to the point of obnoxiousness), and personable. (If you’re using volunteers, here’s where training comes in.)  It’s important to leave people with a good feeling about the organization even if they decide not to donate – they may change their minds later.

An important part of recruiting donors is finding out what they want from their donation. After all, if all they wanted was a reliable income, they could invest their money directly, rather than putting it into a planned giving arrangement. They’re thinking about giving it to you for a reason – they want to support the organization’s goals, they need the tax advantages, they want to be remembered for more than making money, they feel affection for the organization. If you know their reasons, you can help them create a personal giving plan that addresses those reasons, making it more likely that they’ll want to donate.

See Tool #2 for some tips on recruiting and maintaining relationships with donors.

Implement your plan. Now that you have everything lined up – whatever state licenses or permissions you need, money management, administration, the first few donors – it’s time to put your plan into action. There are three essential elements to implementation:

• Make sure your systems are working properly, and maintain them so they continue to do so. This includes ensuring that:
  • All payments are made on time, to the right people and in the right amounts.
  • All state and federal reporting requirements are being met.  You’ll need to keep up to date on any changes in regulations as well, so that you’re certain you’re following the current rules.
  • All state and federal regulations are being followed. This means that appropriate paperwork is turned in on time, and you maintain proper recordkeeping and storage, information security, etc.

As part of each of these last two requirements, it helps to have personal contacts at the appropriate state and federal agencies. Maintaining a friendly relationship with an individual allows you to get fast and accurate answers to questions, smooth over problems, and maintain good relations with the agency. Life is always easier if you can deal with a person rather than a bureaucracy.

• Any restrictions or special arrangements that have been negotiated with donors are clearly spelled out, and are being properly implemented. Funds designated for particular purposes have to be used for those purposes, for instanc
• Investment strategies are successful, with investments, over time, more than covering expenses.

Remember that the stock and bond markets go up and down, and even the best investments don’t make large amounts all the time. The test of an investment strategy is in both how it does in relation to the markets themselves (i.e., are you doing well when everyone else is?) and how it does over time. The fact that you have a bad year – especially if most investors are in the same boat – doesn’t mean your strategy’s not working, although it may call for some adjustment. If you’re doing noticeably worse than the markets over five or ten years, it’s probably time to rethink your approach.

The Community Tool Box is not in the business of giving investment advice, and you don’t have to be an expert – that’s why we urge that if there’s a reasonable amount of money involved, you should hire the expertise you need. It is important, however, that someone in the organization besides the hired expert have a basic understanding of markets and investment, so that if the expert isn’t doing a good job, someone will know enough to realize it.

There are at least two ways to make this happen. One is to make sure that the board includes – as treasurer or otherwise – at least one member with expertise in finances. Another is to take advantage of the many plain-English, common-sense guides to investing that are available in any bookstore. We don’t suggest that reading one or more of these books will equip you to manage a multi-million-dollar endowment or planned giving fund, but rather that it will allow you to communicate with investment experts with some degree of understanding, and help you to sort out the reasonable strategies from the unreasonable. Two of these books are listed in the “Resources” area of this section, and there are many others available.

 Cultivate current donors. Pay attention to your personal relationship with each of your donors. They may choose to donate more, but, equally important, they may suggest to others that they donate to your organization.  They can be your best ambassadors and salespeople.  In addition, they’re helping to make your organization flourish: you owe them a debt of gratitude. People need to know that their efforts are appreciated.

Offer agreed-upon donor benefits for gifts of certain sizes. These may include levels of giving identified in organization publications and media publicity; named programs or facilities;

• Use the occasion of each payment to send a personal letter – from the director, the director of development, a board member who knows the donor, etc. – thanking the donor for his gift, updating him on the organization’s activities and progress, and letting him know what his donation is making possible.

Where there’s no payment involved – where the gift was to an endowment, for example, or where the planned giving arrangement pays to someone other than the donor – there should nonetheless be communication of the same sort at least once or twice a year. Personal relationships with donors are tremendously important, regardless of the amount of the donation. Part of the donor’s impression of the organization – probably the largest part – comes from the people she deals with; if she’s happy with them, she’s happy with the organization. And if she’s happy with the organization, it’s likely that there will be benefits of good publicity, as well as increased donations from the donor and her friends, down the road.

• Hold donor meetings and forums, where you can learn more about donor needs and desires, and where donors have a chance to meet, talk, and form relationships with one another, and to build a community of support for your organization.
• Hold donor events, or give donors special privileges at organizational events. A yearly dinner or party (not too fancy – donors don’t want you to waste their money), a private tour, a seminar, a special performance or private tour of an exhibition – there are many ways to make donors feel like insiders. These kinds of events and privileges both provide an ongoing thank-you to donors, and bind them to the organization.
• Ask donors for their suggestions in areas where it’s appropriate.They may have ideas that are original and valuable, and they’ll appreciate being asked.
• If and when it’s appropriate, ask donors for the names of other potential donors (or, depending on your relationship with them, ask them to approach other potential donors). You might also ask whether they’d be willing to be cited as examples in order to attract other donors.

Continue to search for and recruit new donors in every way possible. In order to keep your funds and your organization growing, you’ll need to continue to attract new donors, as well as keeping current donors happy and – in some cases – continuing to contribute. Once you’ve established an endowment or planned giving arrangement, you’re in it for the long haul.

In Summary

Endowments and planned giving arrangements of various kinds are ways of providing your organization with ongoing income and long-term financial stability. They’re not for everyone: while small organizations may be able to accumulate a modest endowment without adding any systems or personnel, larger endowments – in the hundreds of thousands or millions of dollars – and planned giving arrangements of any size take careful management and administration. If you have or can gain the capacity to deal with them, however, they can be great boons to your organization.

Endowments and planned giving offer attractive benefits to donors – tax advantages, recognition, guaranteed income, and a variety of ways to donate and to designate donations for specific programs, activities, or facilities. For non-profits, they offer investment capital, regular income, the chance to accumulate capital for special projects or programs, and a certain degree of independence from the uncertainty of public funding and the hard choices that funders of any stripe can impose.

If you’re willing to set up and maintain both the money management and administrative systems necessary to sustain them, and to take on donor relations in a serious way, endowments and planned giving arrangements can help your organization grow and flourish.

What are endowments and planned giving arrangements?

___An endowment is a fund built up from donations, of which the principal is invested, and the income used for the support of the organization or institution.

___A planned giving arrangement is one in which a donor contributes to an organization or institution, and receives both tax advantages and an income from his donation for a fixed period or his lifetime.

___Planned giving arrangements include:

• Charitable gift annuities.
• Charitable remainder trusts
• Pooled income funds
• Life insurance

Why would you want to secure endowments or planned giving arrangements?

___They’re attractive to donors. 

___They’re more likely to get you large donations. 

___You can use the good experiences of donors to attract other donors. 

___They give you investment opportunities, and the chance to develop a funding base that will continue to grow. 

___They can make possible programs or opportunities that you wouldn’t otherwise be able to fund. 

___They can give you the long-term financial security that makes long-range planning more than hope. 

___They can free you from the restrictions of public and foundation funding. 

When should you try to secure endowments or planned giving arrangements?

___When you’ve grown to the point that you have, or can buy, the capacity to invest and administer the funds you want to set up. 

___When you have a base of donors and potential donors that can make it worthwhile to set up endowments and planned giving arrangements. 

___When you have the capacity – either through volunteers or a development office – to market your program to potential donors. 

___When the reputation of your organization or institution is one that will make donors feel that their money is both well spent and well used. 

___When your organization has a need for something that requires a large capital investment. 

___When funding restrictions from public or private funders make it difficult or impossible to do work that is in the best interests of the community or the society. 

___When funding from public and private funders becomes scarce. 

How do you secure endowments and planned giving arrangements?

__ Determine whether the arrangement you’re considering is possible for your organization in your community.

__ Set up your financial arrangements.

__ Reach out to and recruit potential donors.

__ Implement your plan:

• Monitor and maintain your systems.
• Cultivate current donors.
• Continue to recruit new donors.

__ Keep at it indefinitely.

Tool #1: Twelve Common-Sense Rules for Investing

BUY LOW, SELL HIGH.

Don’t follow the crowd. Don’t buy at the top of a bubble just because everyone else is buying. Don’t panic and sell in a slump; grit your teeth, hang on, and buy more if you can. Whatever you do, don’t buy what the gurus say is the hot new thing, because it’s almost sure to be cold three years from now.

DIVERSIFY.

Different types of assets – growth stocks, income stocks, international stocks, bonds, etc. – go up and down at different times. Spreading your portfolio out among several asset types moderates the windfalls but cushions the disasters. In the long run you’ll do better.

PICK A DISTRIBUTION AND STICK TO IT.

Decide what percentage of your portfolio should be in each asset type. When one section goes up, sell off enough to bring it back down to that percentage. When it falls, buy more. This forces you to observe Rule #1.

DOLLAR-COST AVERAGE.

Invest a set amount at regular intervals. If you force yourself to invest on a regular schedule, you’ll invest more. You’ll also buy more of what’s cheap and less of what’s expensive at any given time (Rule #1, again).

BUY ONLY NO-LOAD MUTUAL FUNDS.

A mutual fund gives you a start on diversity, no matter how small your stake. A no-load fund is one that doesn’t take a percentage of your principal as the price of investing, or charge you if you take money out before a particular time. A fund that skims a chunk of your assets off the top isn’t going to perform any better than one that doesn’t.

CHECK THE EXPENSE RATIO BEFORE YOU INVEST.

The expense ratio tells you the fund’s operating costs, including management fees, as a percentage of the fund's average net assets. The average expense ratio for an actively managed mutual fund is about 1.5%. A higher ratio has nothing to do with better performance.

NOBODY BEATS THE INDEXES EXCEPT WARREN BUFFET.

A lucky fund manager may beat the S& P 500 three years running, but over the long run almost no one even manages to match it. So stick with mutual funds that simply mirror the relevant indexes. That cuts your expenses dramatically, too.

RISK AND RETURN ARE ALWAYS CONNECTED.

There is no such thing as a safe, high-yield investment. The higher yield is the premium they pay you to assume a higher risk. Don’t believe anyone who tells you different.

THE LONGER YOUR TIME FRAME, THE MORE RISK YOU CAN AFFORD.

Over the long run, stocks give you a higher return than bonds. You can guess what stocks will do for you over the next 20 years, but over the next five they could kill you.

NEVER INVEST IN ANYTHING YOU DON’T FULLY UNDERSTAND.

The more complicated the deal that someone is trying to sell you, the greater the likelihood that they’re skimming the profit and leaving you with risks you don’t know about. These people are not your friends.

NEVER BUY ANYTHING ON THE ADVICE OF SOMEONE WHO’S GETTING A COMMISSION ON THE SALE.

This includes brokers, annuity salesmen, and anyone who works for an investment

company. Their interests are not aligned with yours, even if they are your friends.

IF IT SOUNDS TOO GOOD TO BE TRUE, IT IS.

Tool #2: Ten Tips for Donor Recruitment and Relationships

• Know your prospective donor. Learn as much about the donor’s background, affiliations, needs, preferences, and interests as you can.
• Develop a relationship with the donor – an honest, open, and personal relationship, based upon your mutual interests.
• Listen to the donor’s needs and concerns. Carefully, attentively, and respectfully.
• Ask for what you want. This should be a specific request, based upon your knowledge of the donor’s current ability and motivation to give.
• Show the benefits of giving, again based upon the donor's individual interests and needs. Many different benefits are possible; the ones you offer should be customized for the individual situation.
• Minimize the costs of giving. “Costs” here mean costs of time and effort, as well any personal barriers, or “psychological costs.” Make it as physically and psychologically easy to give as possible.
• Modify your request, if necessary, based on feedback you receive to your initial appeal.
• Refer to models. Along with your request, indicate others who have given corresponding amounts where possible – especially those persons the donor knows, likes, and respects.
• Express appreciation to the donor for his listening and consideration, regardless of any amount given. Even if the prospective donor does not give this time, there will be other opportunities.
• Provide feedback. After a gift is given, follow up by indicating to the donor how the gift was used and what results were obtained.

• What is a membership program?

• Why might you want to establish a membership program?

• When is a good time to establish a membership program?

• Who are potential members, and how do you find them?

• How do you establish a membership program?

• How do you maintain a membership program?

What if...

Your organization could count on a chunk of annual income that came with no strings attached?
You could mobilize hundreds of people to provide political support for your cause or your organization?
You could draw on a large pool of people to help with planning, fundraising, public speaking, and other organizational tasks?
These are some of the possibilities you might realize if your organization establishes a membership program.

You probably belong to one or more organizations, and pay for your membership. What kinds of organizations are you a member of? Perhaps some, like the YMCA, that you've joined so you can use their facilities. Perhaps a professional organization that advocates for your field and gives you the chance to network with like-minded colleagues. Perhaps one or more human service or charitable organizations that you contribute to every year -- Oxfam, say, or Boys' Town. How about public radio or TV? Or an advocacy group: the Sierra Club, or NOW?

Establishing and maintaining a similar membership program for your organization can help you toward institutionalization by building a base of financial, political, and moral support over the long term. When people join an organization, their membership signifies they've made a commitment to that organization, and implies that their commitment will continue. And that continuation will guarantee your organization their financial contribution and support every year.

This section will help you decide whether a membership program makes sense for your organization, and show you how to set one up and how to keep it going.

What is a membership program?

In its simplest terms, a membership program is one which asks people to contribute something - money, time, their presence, their names, certain actions - to your organization, in return for which they become somehow affiliated with it for a set period of time -- usually a year. Members may or may not receive products, privileges, or other advantages over non-members. Depending on your organization, members may have to meet some standard or hold specific credentials in order to join (think of the American Medical Association, for instance). In any case, membership implies an "insider" status. Much of the purpose of a membership program is almost always to increase the financial, political, and/or operational stability of the organization.

There are a number of different types of membership programs, and many organizations run programs that fit into several different categories.

• Programs affording members something substantive. The "something" may vary greatly from organization to organization:
  • The use of facilities or services, as with the YMCA or an art museum
  • Networking and advocacy, as with the Chamber of Commerce or a professional organization
  • Specific publications, such as those which come with membership in many professional and other organizations
  • Group health insurance, legal help, and other services which some organizations, particularly professional organizations, can provide to members
• Programs supporting organizations that lobby or use the legal system on behalf of particular causes, such as the American Civil Liberties Union, Friends of the Earth, or the National Rifle Association.
• Some memberships, like those in the American Bar Association or the American Psychological Association, help establish a professional credential or legitimacy.
• Programs that support national or international charitable, research, environmental, or other efforts. Some examples are Oxfam, the Heart Fund, Easter Seals, and the Nature Conservancy.
• Programs that support the work of local human service, health, environmental, or other community organizations. Many local programs, -- community land trusts and those serving developmentally delayed adults come immediately to mind -- make membership programs a standard practice.

There are, of course, many other kinds of membership programs. Some are for the direct spiritual or psychological benefit of members - Alcoholics Anonymous, for instance, or a church or prayer group. Others are primarily social, or centered around a particular activity: the Elks, model train clubs, bowling leagues, etc. Still others - the American Legion, for instance - are limited to members of certain groups or people with certain common experience. We're specifically concerned here with membership programs that can help to institutionalize an organization.

Why might you want to establish a membership program?

"Membership" in your organization may seem unnecessary. Why not simply ask for contributions? While this may be effective in obtaining funding, it may be less so in assuring long term support. For this reason, many organizations that have no basic need to offer membership do so anyway.

The National Geographic Society (NGS) is a prime example, since virtually all members join simply to subscribe to its magazine. The mystique of being a member, however -- of being part of something as romantic as the NGS, which sponsored the first successful expedition to the North Pole and the discovery of the Titanic -- appeals to many people, and keeps them coming back to the organization year after year.

Membership increases commitment to your organization by fostering the feeling of belonging. If members see the organization as theirs, they'll be more likely to support it and act on its behalf, whether that means giving money or advocating or attending events.

Besides making members feel part of your organization, membership can build support for it in a number of ways.

• It can broaden the knowledge and understanding in the community of your cause and the work of your organization.
• Membership builds a core of community support for the organization, and helps to establish the organization as a "given" in the minds of the community. ("Of course we need that service -- it's just as much a part of this community as the Fire Department.")
• It may be the first step toward involving members more deeply in the organization -- as volunteers, Board members, or even staff.
• Once firmly established -- a process that may take three years or more -- a membership program can afford you with predictable annual income that can be used however it 's needed.

Membership programs don't happen overnight. Building a membership list large enough to yield a fair number of members, smoothing the process of contact and maintaining membership, and learning to manage and expand the list all take time.

An adult literacy organization started a modest membership program (memberships were $25.00) with a mailing list of about 200 names. In the first year, there were fewer than 25 members, the next year about 40, most paying only the basic fee. After six years, the mailing list was up to over 3,000 names, and revenue from membership was over $12,000.00, with many members contributing $100.00 or more. Many on the list were now reliable members who had contributed for at least three years. But it took six years of work to get to that point.

• Membership and familiarity with the organization may motivate some people to contribute toward an endowment fund, or to make larger annual gifts.
• It can help to develop a sense of identification with the organization among members, thus strengthening their support and their advocacy in the community.
• A successful membership program can help to establish credibility with funders.
• Being able to point to a large constituency ("We have over 500 dues-paying community members.") can increase your clout with policy makers.

While a membership program brings with it many advantages, it carries a major drawback that needs to be examined as well. It is extremely important to be certain that you have the resources -- particularly the personnel, whether staff or volunteer -- to start and sustain it over time. Managing and continuing to build a member list and maintaining the program can be time-consuming and frustrating. Program management and maintenance need an organized mind, attention to detail, long-term commitment, and, ultimately, a reasonable amount of time each week. And a yearly membership drive takes careful coordination and a lot of labor. If your organization can't provide all that in some way, you might want to think carefully about whether a membership program is right for you.

This isn't to say that it can't be done without a professional membership director. Very few small organizations have one, and many are able to run very successful membership programs. It simply means that someone has to take the time and assume the responsibility either for getting things done or finding others to do them. That person can be a volunteer (although it's much more likely to be the director of a small organization), an interested staff member, or a Board member, but whoever it is, she has to be committed and to have the skills necessary to make the program happen.

When is a good time to establish a membership program?

As with most "when" questions in the Tool Box, the temptation is to answer "Right now," but that's not strictly true in this case. Right now is certainly the best time to begin planning your membership program, but it may not be the best time to implement it. There are a number of questions to consider -- assuming you have everything else in line -- before deciding when to actually begin a membership program.

When is the best time to contact potential members? To answer this question, you have to know your community and its peculiarities. Winter holidays, for instance, are often seen as a good time for a membership appeal, since people are perceived as feeling generous and full of good will at that time of year, and it's a final chance to record charitable contributions on the year's taxes.

The tax issue only matters if your organization is certified as a 501(c)(3) tax -exempt non-profit by the IRS. Contributions for lobbying or legal work are usually not tax deductible, even if the organization is tax exempt.

It's also true, however, that people are often strapped for cash at holiday time. Many other organizations may be taking advantage of the season to recruit members or raise funds, so you'll have some competition. Furthermore, while winter holidays might be a good bet if you provide services for children or the homeless, they may be less appropriate if you provide advocacy or are fighting against something. People prefer the positive at this time of year, and like to feel they're connecting with someone.

Some other considerations when choosing a time to solicit members:

• United Way. The United Way or its local equivalent runs a campaign at a given time every year (usually in the fall). If you're a member, you probably aren't allowed to run any fundraising activities while that campaign is going on. Even if you're not a member, it's generally foolhardy to try to compete directly with something as respected and community-wide as United Way.
• Other organizations. Other community organizations may also have membership drives at specific times. It's probably a bad idea, both politically and pragmatically, to stage your membership appeal at the same time, unless you all have some agreement about solicitation.
• Availability of potential members. In some communities, particularly those dependent on a single large employer, most people may take their vacations at a particular time (often in July or August), so that time may be a poor choice for a membership drive.

In reality, you can probably make arguments for and against almost any time of year. If you use the above considerations, you'll probably find that a particular season or month leaps out at you, because everything else is in some way inappropriate. Sometimes, you may just have to make a less-than-perfect choice, rather than agonizing endlessly. Once you establish a particular time for a membership drive, your members and supporters will expect it and respond to it in any case.

When do you have the capacity to mount a membership drive? Capacity generally means three things: people, money, and time. When are staff members or volunteers available, or how long will it take you to find volunteers, to do the work involved in getting a drive together? When do you have the cash available for a mass mailing or phone marathon, and when can your organization afford the staff or volunteer time needed for coordination?

When does the organization particularly need an infusion of cash? It might make sense to schedule your membership drive for a predictable time of year when cash flow is a problem -- between grants, perhaps, or a time when expenses are particularly high. If early spring is traditionally a period when cash flow is low, for example, then your membership drive should be in late winter, which would bring in the cash when you really need it.

Are there times or events when -- because of the nature of your organization -- a membership drive would be particularly appropriate? A land trust might tie its membership drive to the birthday of the great naturalist and environmentalist John Muir, for instance, an adult literacy program to National Literacy Day in September, or a domestic violence prevention group to "Take Back the Night" activities in the community. Sometimes the anniversary of a local event that everyone remembers, and that is associated with your organization's work -- a tragic accident, a heroic act, a fire, a crime, a local historic event -- may be a good time for a drive.

An alternative may be a membership program that goes on constantly. People are solicited as their names appear on your list (see below), and are asked to renew their membership on the anniversary of their joining. This won't work for every organization -- it increases the administrative burden -- but for some, it may be the best solution.

Who are potential members, and how do you find them?

Everyone in the community is a potential member. However, since it would be difficult -- in all but the smallest communities -- to contact everyone, a list of people who are at least somewhat likely to be sympathetic to your organization is a good way to start. How do you get such a list? There are a number of ways to get a core list of names.

• Start with people you know. Ask everyone connected with the organization -- staff, Board, volunteers, participants -- to come up with a list of the names and contact information of a few friends and acquaintances who can be solicited. (Ten is usually a manageable minimum, and some people will come up with many more.) It might also help to pass the lists around, since some names may suggest others to some people. As you start attracting members, you may want to ask if they'd be willing to contact friends and ask them to join.

As is so often the case, the personal touch is crucial here. Research consistently finds that the most important reason people give for joining an organization is "Somebody asked me." The people on the list should know that they're being contacted because their friend is associated with the organization and wants them to join. If the membership solicitation is by letter, each list maker can write short personal notes on the letters to the ten or more people on her list. If people know that someone familiar vouches for and believes in the organization, they're much more likely to join.

Your core list should also include current and former donors or contributors, current and former volunteers, and - if you provide services or run a program - former participants. (If most participants are low-income, you might designate a different level of donation for their membership. If regular membership is $25.00, former participant membership might be $10.00, or whatever they can afford.)

As you build a list and enter it into a database, think about exactly what information you'll try to get. There are the obvious categories for easy contact -- name, home and business addresses, phones, faxes, and e-mails -- but there's also other important information. Who referred this person to the list? What's their history of contact with the organization? Have they stated any preferences about being called or about any other form of contact? Have they donated to the organization in the past, and how much?

You may want to enter some personal notes in addition to specific categories. Some members may be interested in specific aspects of the organization, for instance ("Says she wants to help with fundraising."), or may have contacts they're willing to share ("He's Bill Gates' cousin, and is willing to call him.").

If you're keeping a computerized database, adding and using new categories is a fairly easy process. If you're keeping a pencil-and-paper list, you'll probably want to limit the amount of information in the interests of time and of the fact that it's much harder to retrieve from a paper list. Where a computer database will sort and resort the list in any way you want -- by zip code, by size of contribution, by who recommended the name, etc. -- paper lists have to be gone through one by one, and can only be sorted by one category at a time. If your list is 40 people, that's not so big a job; if it's 4,000, it can take forever.

• Target specific groups that have some connection to the work of your organization. If you're a community health clinic, you might aim to contact all the health professionals who live or work in the community, for instance.
• Consider buying or borrowing contact lists from other organizations or from businesses whose lists comprise people who'd be sympathetic to your work.

For Example,  an adult literacy program, for instance, used lists from bookstores. A similar option is to trade lists with another organization.

The drawback to borrowing or sharing mailing lists is that some people - the author is one - get very upset if their names are given to other groups without their being consulted. One way to deal with this is to ask people to check a box or otherwise indicate whether they'd be willing to have their name given out in that way, and then make that a category in your database, so that you can pull out the names of those who object before you give your mailing list to someone else.

• Circulate a sign-up sheet at presentations to faith groups, service clubs, and other organizations.
• Go where the money is. You might prepare a specific presentation or solicitation for a large employer or patron of the arts, or try to make contact with such a person through a mutual friend. If you're asking someone to join and contribute a significant amount, or to solicit his friends, it's wise to be specific about what you want to use the money for, and how it will benefit the organization and the community over the long term.

Sometimes the most valuable thing a prominent person can give you is the use of his name. A particular endorsement on a membership letter may do more than the text to convince people to join the organization.

• If you haven't done it already, start building a contact list right now. It should include everyone the organization has had contact with, including current and former contributors, colleagues from other organizations and from the field (including those outside your region), current and potential participants, current and potential volunteers, legislators, former staff and Board members, community members, public officials, etc.

Compiling and managing a list like this is much easier if you put it on the computer. If you have that capacity, there is a large amount of software -- with a broad range of price and complexity -- designed specifically for this purpose. Such software will typically allow you not only to keep track of information about each person (a contact history, who or where their name came from, their relationship to the organization, how much they contributed, etc.), but to print out, automatically, computer -generated letters with the correct address and salutation to everyone on the list, or to a selected group.

As your list grows, computerizing it -- and timely entry of new names and information -- becomes more and more necessary if you hope to keep control of your membership program.

How do you establish a membership program?

You've already accomplished some important steps toward your goal - deciding on a time for a drive and building a list of potential members. But that's only the beginning of establishing a membership program for your organization. There are several other considerations to deal with in setting up and running a program, and in maintaining it over a period of years.

Develop a system for overseeing the membership process

As discussed earlier, the logistics of a membership program -- building a list, organizing a membership drive, responding to membership contributions, and maintaining the program -- all take time and effort. A coherent system for handling all this is absolutely necessary for a successful membership program. And the key to an effective system is an effective coordinator.

In a larger organization, the membership coordinator might be an administrator or staff member responsible for development. In a smaller organization, it will probably be the director or assistant director, or even a volunteer. Whoever it is, the coordinator needs to have an overview of the program as a whole, and to understand what's necessary to make everything happen at the right time. She doesn't have to do everything herself, but she has to make sure that everything gets done, and done properly. She's the hub around which a membership drive revolves, and the last stop for questions and problems.

An effective membership system should include, in addition to a coordinator, clear timelines for each step in the process, and clear assignment of responsibilities for each of the tasks that needs to be accomplished: list-building, crafting an appeal, stuffing and sorting mailings, training and supervising callers, recording and answering responses, and maintaining the program.

Set fees or dues

To a large extent, where you set your membership fees depends upon who your target members are. It generally makes sense to make membership accessible to the largest number of people possible while still getting returns that make running an annual membership campaign worthwhile. Think about who your target members are. If you want large numbers of your organization's beneficiaries to join, and most are low-income, then you either need to set fees low, or to offer membership on a sliding scale. Look at what other groups do, and canvass people in the community to get some idea what would make the most sense for you.

All this assumes that you will charge a fee for membership. That doesn't have to be so, depending upon why you want members. As discussed above, they can function as community support, as advocates, as a political base, or as a source of volunteers and board members. The assumption here is that, if you're using membership as an element of institutionalizing your organization, you need all those things and money as well.

Charging a membership fee, or a fee that seems too high, may mean that some of your supporters won't join. If you're a grass roots group, you may be seen as selling out or abandoning your principles. On the other hand, unless you think your members ' support and political clout can assure your funding, that assured money from a solid membership base can go a long way toward providing a foundation for your activities over time.

The price of annual membership may be connected to something you offer to members as well. Professional organizations that publish a journal, for instance, usually include the cost of the journal in their membership fee.

You might think about offering different levels of membership. Many organizations designate different levels of contributors as "regular member," "friend," "supporter," "patron," "benefactor," "angel," etc. You may also offer different privileges or products for different levels. A performing arts organization, for instance, may offer higher contributors a chance to meet with performers before or after the show.

Whatever the character of your organization, and whether or not you decide on different levels of membership, you'd be wise to offer members something. Bridge Over Troubled Waters, a Boston organization that offers comprehensive services to homeless youth, sends its members a quarterly newsletter. Each edition contains a short news bulletin about a current program development, a brief profile of a staff member, and a longer, but still brief, participant success story. These stories tell of abused and abandoned adolescents who, with the help of Bridge's services and their own inner resources, have left the streets and become college graduates, Bridge staff members, loving parents -- functional people who see themselves as somebody.

The cost of this newsletter is probably minimal: it's produced in-house, and the printing is almost undoubtedly donated. Its impact, however, is enormous. It would be difficult for anyone reading it to fail to be moved by the plight and resiliency of those profiled, or to deny the value of Bridge's work. The newsletter keeps members ; it's as simple as that.

Contact people

So you have your list in front of you. It may have 200 or 500 or 5,000 names on it: now what? Here are some possibilities for reaching those names, with the pros and cons of each.

You don't have to have a "complete" list in order to start contacting people. Building a list is an ongoing activity. For the sake of efficiency, however, it does make sense to have enough names before you start so that it's worthwhile to attempt a campaign. It makes very little sense to enter into a membership drive with only 20 or 30 names; but it makes just as little sense to wait till you have 1,000 before you get started.

Personal meetings. This is the ideal. It's unlikely that you can make personal contact with everyone on your list, but it may make sense to try to make a personal appeal to people you particularly want as members. These may be community leaders, potential major donors, or people who've been involved with the organization before. Having someone they know contact these folks face to face will greatly increase the chances that they'll join. 

Like all the other contact methods on this list, face to face meetings take preparation. You need to think carefully about who'll make each contact - personal friends of those to be contacted, the organization's director and board, well-known organizational supporters - and then make sure that those people have the information to answer whatever questions come up about the organization. In addition, they need a pre-tested method of approach - a script, or at least a general line of conversation, that's been run past several people who are representative of those who will be contacted in this way. The more prepared the contact people are, and the more thoroughly pre -tested the approach is, the more likely it is that prospects will become members.

Phone solicitation. Even if you use other contact methods, contacting people by phone is another common way to solicit memberships. Many organizations send letters and then follow up by phone to a core group of the most likely potential members, or to those who might need a little extra push. Whether you use the phone as your only method of contact, or as a supplement to other methods, it's important to make sure that you train callers and help them understand what they need to say.

Who might your callers be? In most cases, they'll be people solidly connected to the organization: staff and Board members, participants, regular volunteers. Occasionally, community supporters or other interested outsiders might join a phone campaign.

Whoever your callers are, you'll need enough phones with separate lines to make a dent in the list (you may be able to convince a business or institution to donate its phones after working hours); a script for each caller to help her introduce the idea of membership, answer questions, and deal with a number of situations (like membership letters - see below - phone scripts should be pre-tested to see if they 're effective, and changed if they aren't); and food, drink, and bathroom facilities.

You'll also need some time before the calling begins to train callers, so they won't be tongue-tied or alienate people who don't want to join.

Phone contact is tricky. Some people love being called; others hate it. All the books say that you should call at dinnertime because that's when people are home, but most folks dislike having their dinner interrupted. So you both risk alienating a potential member, and have a shot at enlisting an enthusiastic supporter every time you pick up the phone. For that reason, it probably doesn't make sense to make calling your only source of contact with potential members.

It's particularly important that, if someone asks not to be called again, that injunction be included in his record so that he's not disturbed a second time. It 's also important that it be recorded if someone obviously enjoyed being called, or had a good conversation with the caller. Caller training should include ways to get off the phone quickly and graciously if someone is clearly unhappy about being called.

Direct mailings. The most common, and probably the most efficient, method of contacting prospective members is a direct mailing. You compose a letter asking people to become members, put it in an envelope -- perhaps with a brochure about your organization, perhaps with a personal note -- send it off, and wait for a return. As described above, this process can be made much easier if you have software that automatically prints out a string of personalized letters for all the people on your list.

Sounds easy, right? Well... yes and no. The part that's easy is printing the letters. All you have to do is make sure that someone keeps putting more paper in the printer. But first, you have to write a letter that will convince people that your organization is worth joining. And afterwards, you have to fold and stuff into envelopes the 200 or 500 or 5,000 letters that represent all the names on your mailing list, either stamp them or sort them for bulk mail (see box below), and see that they get mailed at the proper time. Let's take these three tasks -- writing, stuffing, and mailing -- one at a time.

Writing membership letters. You may think that some people won't even read your letter... and you're right. Some will look at your letterhead or at the envelope, decide not to contribute, and throw your letter away. Others will be convinced -- or not convinced -- by the personal note from someone they know. But for a large number of the people who receive it, your letter will be the factor that determines whether or not they decide to become members.

It's important, therefore, to plan and write the membership letter carefully. It should explain briefly and powerfully what your organization does. Give specific examples of the organization's success or efforts -- refer to participants if you 're a service organization; refer to politics if you're an advocacy organization; to issues, to research, to whatever your organization aims to achieve. Tell people what their money will help you accomplish, and what they'll get for their membership. Thank them in advance for being great people who care about their community. Let them know if their contributions are tax deductible. And do it all in clear, readable, graceful prose.

Again... when your letter's done, pretest it. Give it to a number of potential members, your neighbor, your friend's Aunt Sally, your cousin's bridge club, and see what their reaction is. Better yet, if it's possible, send out a pilot letter to a small sample of your mailing list and see what the results are. If you get an overwhelmingly positive response, you're home free; if not, you need to find out what would work better, and rewrite the letter in those terms. No matter how good your letter sounds, if it doesn't convince people to become members, it's not what you need.

If there's no one on your staff who's capable of writing a good membership letter, turn to your Board, to volunteers, to a friend -- wherever you can find the expertise. It's crucial that the letter be persuasive, well-written, and grammatically correct. (If you blow it, and then catch the error before the letters are mailed, don't let it go: reprint them.)

You might add to your letter a tear-off or separate sheet to fill out and send back with membership dues. Such a sheet could include both basic information (name, address, phone, amount enclosed) and a check-off of things that a prospective member might be interested in being involved in -- volunteer tutoring, fundraising, providing in-kind goods or services, etc. Your recording task will be much easier as a result, and you'll be able to flag people to contact after the campaign is over.

Stuffing membership letters. The key to stuffing letters is finding volunteers to do it -- Board members, organization volunteers, people who just want to be helpful. Providing food and drink and holding a "stuffing party" can be a relatively painless way to accomplish an essentially tedious chore.

Another possibility is finding a group unconnected with the organization to do it: a high school community service class, a sheltered workshop. One organization had a stuffing arrangement with a halfway house for incarcerated adolescents. The kids were extremely fast, and were so pleased to get out for a few hours that they happily stuffed thousands of envelopes -- competently -- in return for a fast-food lunch and snacks.

Mailing membership letters.

By far the least expensive way to handle mailing is with bulk mail. More costly, but still relatively inexpensive, options are third class mail and postcards. The most expensive option is to stamp each letter separately and send it first class at the normal rate.

Bulk mail is an option that the post office provides to non-profit organizations for a set annual fee. It allows greatly reduced postage rates on mailings of 200 or more pieces, but can only be used at the post office where it is purchased.

Bulk mail only makes sense if the annual fee (usually under $200.00) is less than the amount you save in mailing costs by buying a bulk mail permit. If you're only doing one mass mailing a year -- unless it's truly huge -- a bulk mail permit may not help you. If, however, you're doing three or four, it may save you a lot of money.

Here's how it works: You buy a bulk mail permit that entitles your organization to bulk mail rates (usually considerably less than half of first class). You have your envelopes printed or rubber-stamped with your bulk mail permit in the upper right corner. (It's a standard design that printers and stamp makers have on file, and they'll insert your permit number.) To use these envelopes for regular mail, you simply put a stamp over the bulk mail permit.

Bulk mail, in order to be eligible for the low rates, must be sorted by zip code. The more specifically the mail can be sorted, and the more letters going to the same zip code, the lower the rate. Sorting can be done while stuffing, thus saving a good deal of time and effort. (This may all sound complicated, but the folks at your local post office will usually be glad to help, because it will make their job easier if you know what you're doing. By the same token, the nicer you can be to them, and the more you can do to reduce their workload, the smoother the whole operation will go.)

A drawback to bulk mail is that it's sometimes slow. There's no guarantee that it will reach its goal within a day or two, as most mail in the U.S. does. It can take as much as three weeks sometimes, although most bulk mail actually travels about as fast as first class. If you want to be absolutely certain that your mailing reaches its recipients within a short time, then bulk mail may not be an option.

A hint: always include at least one envelope addressed to yourself in any bulk mailing. That will give you a check on how long the mailing is taking.

Another consideration here is how to set your letter apart from the pile of solicitations, catalogues, bills, political messages, and notices that arrives daily in most people 's mail boxes. Don Dillman, who has done research in this area, suggests making the letter look both professional and distinctive. This may mean hand-addressing envelopes (an impossible job for a mailing of several thousand, unless you have a huge number of volunteers, but not for a mailing of a few hundred); using odd-sized or colored envelopes and paper; using distinctive stamps; etc.

E-mail.

If you have an e-mail contact list or organization listserv, this may be a way to ask people on it to join. It's still early to understand exactly how effective e-mail is in a situation like this. Many people think of any kind of solicitation as spam, and either automatically delete it without reading it, or are angry that they've received it in the first place. Others may be delighted to be contacted in this way.

In any case, e-mail will only work for those who have access to it, and may therefore eliminate many elderly and low-income people, who are less likely to own and use home computers.

If you have a website, you can advertise membership there. Whether it's worth it or not depends upon the number of hits you normally get, and whether you're willing either to deal with rolling membership, or to take the trouble to run a campaign on your site, and then take it off when the campaign's done. This is a low-cost option, and probably would work best added to one or more of the other contact methods described here.

Public appeals through the media.

These can include Public Service Announcements (donated ads on radio and TV), paid ads in newspapers or on radio or TV, Internet advertising, press releases or press conferences, or stories in the print and broadcast media about the organization and the membership drive. Since they lack personal contact, these methods are probably less effective than the methods above.

Other methods.

Although the ones above are the most common forms of membership solicitation, there are other methods, both low-key and high-profile, that can be used. In the former category are posters and fliers in local businesses or a booth at the home show. More flamboyant appeals can involve street theater, contests, festivals, or people in odd costumes. If you have a lot of different options, you can use whatever seems appropriate at a given time for a given audience.

Record and answer responses

Every response has to be recorded with all its relevant information -- whether this is a new membership, how much the contribution was, etc. Each response then has to be answered, and if membership includes something tangible -- a publication, a key chain, a window sticker -- then that has to be part of the answer as well. The recording and answering should be one action, not two -- they should automatically happen at the same time.

Here's where your system can be tremendously helpful. Those responsible for recording and answering responses will know who they are and what they have to do, and will also know whom to ask for help if they are unable to keep up with the task.

The usual method of response is by personalized form letters or thank-you cards which provide space to acknowledge the amount the member contributed. (Once again, your computerized system can print out personalized letters, and the amount can be filled in by hand.) The letter should explain how the money will be used, at least in a general way, and thank the member, both for his contribution and his wisdom in understanding how important your organization is. A sincere thank-you is really important: people love to know someone has appreciated the good thing they've done.

If members got personal notes on their membership letters from friends within the organization -- staff or Board members -- those friends should be asked to write personal notes on the thank-you's as well. Remember also that, for contributions of $200 or more, if the contribution is tax deductible, you have to provide a receipt, or a letter that doubles as a receipt, for tax purposes.

How do you maintain the program?

Once you've run a successful membership campaign, your job hasn't ended. You have to do it again the next year, and the next, and the next, continuing to expand your list and hoping to increase membership and income each time. Maintaining the program over time takes organization and effort, and is just as important to success as the things you do during the membership drive.

• Keep building the list. Continuing to add to the list of potential and current members should be a constant activity. Anyone the organization has contact with should be added to the list, and people within the organization should be encouraged to think of others who could be added to it. If it seems possible, another route is to ask members either to suggest names or to contact friends and ask them to join as well. The possibility of buying or borrowing mailing lists from other sources has already been discussed.
• Keep the list up to date. You should manage a membership list like a garden, pruning and weeding to keep things growing. Names of people whose deaths someone in the organization is aware of, or who have asked to be removed from the list, should be removed immediately. Duplicates and people whose names have been on the list too long without a response from them should also be removed.

How long do you keep a name on the list if the person doesn't join? Most of the experts say three years. People may not join the first year, but might be persuaded by a second solicitation a year later. Generally, if they haven't joined after three solicitations, you can assume they're not going to.

You can also do a list-cleaning every couple of years, by mailing people a card to be returned if they want to be taken off your list. (This can be a double-edged sword, however. Once people start contributing to an organization, they often continue out of inertia until something happens to change the pattern. A card like this could be that something.)

By the same token, there should be an ongoing attempt to fill in any missing categories of information for those who remain on the list. Addresses, phone numbers, and zip codes can often be found in the phone book, for instance. A memo to staff may uncover a person's original contact in the organization. This information can come in handy later.

Building a membership list and keeping it up to date sounds like a straightforward, fairly simple task. Don't be fooled: it isn't. Doing it right requires almost daily checking and updating: once you get behind, it's incredibly hard to catch up. It requires a very high level of organization, constant vigilance, and a near-obsessive attention to detail. It's a great job for a volunteer or board member who gets real satisfaction out of keeping things in order.

A list can be kept on a standard computer database, like Microsoft Access or Lotus Approach. There is, however, as mentioned above, software specifically designed for fundraising that allows you to organize membership lists in a number of ways. If you choose to use a standard database, you can create computer-generated personalized mailings through the Mail Merge function of your word processor. If you have an integrated database and word processor (Microsoft Office or Lotus Smart Suite, for instance ), such mailings are easier still.

• Respond to specific offers or requests from current members. If someone expresses a desire to help the organization and is never contacted, you've lost both an opportunity and a friend. It's crucial that you follow up on information volunteered during a membership campaign and on contacts by members during the rest of the year.

Someone specific should be responsible for going through the list immediately after the campaign and pulling out the names of all those who offered time, goods or services, expertise, or anything else. (Here's where tear-off returns, if you used them, make your life easier.) Whoever does the information-gathering should then refer the name of each member to the appropriate person in the organization -- volunteer coordinator, fundraiser, director -- for follow-up.

The same should be the case for any member who contacts the organization to offer help or make a request in the course of the year. Members' communications of any kind should be treated as high-priority, and effort made to get back to them as soon as possible. They're your ambassadors in the community, and it's important that they feel good about the organization.

• Keep contact with the membership. Maintaining contact with members keeps the organization in their minds and establishes a relationship. There are a number of ways to accomplish this.
  • Newsletters or other simple publications. Like the newsletter from Bridge Over Troubled Waters mentioned earlier, a one- or two-page communication a few times a year can make members feel more a part of the organization. A simple newsletter might include brief news of the organization (numbers served, recent successes, efforts engaged in, etc.) and a story -- of a participant, a successful initiative, a new program -- reminding them of why they're members.
  • Contact members about needs. Members who didn't think to offer may have furniture, expertise, volunteer time, access to funding, etc. that they're able to donate or obtain for the organization (often with tax benefits to themselves). People like to be asked for help, and like to be able to respond. They'll feel good and become more loyal members, and you'll get what you need.
  • Ask members for help with advocacy. Your membership is a ready-made advocacy group. Many members can be mobilized to write letters, make phone calls, etc. for either a particular situation or long-term support of your issue.
  • In any press release, news conference, or article about the organization, thank members and friends for their support. If a member contributes or does something out of the ordinary, put it in the newsletter. Let members know they're appreciated.

Maintaining member good will is an important part of a membership program. One organization made it a point to hold at least one members-only event a year. These were free to members and their guests, and generally involved something not readily available to the general public -- a private tour of a historic house, a guided excursion on a river lined with spectacular autumn foliage. Generally staged with donated or greatly-reduced-cost services (a Board member was a docent at the historic house, for instance), and with food and entertainment provided by the organization's staff and Board, these events cost the organization next to nothing... but the good will they generated was invaluable

• Make sure members know what their contributions make possible. Explain how important undedicated money is, and explain what you were able to do with it that you wouldn't have been able to otherwise -- buy a copier, pay for particular services, etc.
• Ask for member input. Members may be able to help with planning, dealing with funding emergencies, or looking at long-term strategies for advocacy. They might even help plan the next membership campaign. Try to make them feel like part of the organization.

Properly maintaining a membership program exacts a cost from the organization in time and energy, but the costs of not maintaining it can be far greater. Once your program is established and a system for maintaining it is in place, you're ready to reap -- and continue to reap -- the rewards of an organization with true community support.

In Summary

A membership program can bring your organization both financial resources and increased community support, but it takes work and thought to establish and maintain one.

There are a number of tasks to complete and decisions to make:

• Develop a system for running your membership program
• Choose a coordinator
• Decide on your target group
• Put together, and continue to add to, a list of potential members
• Determine when to begin your membership campaign
• Devise a fee schedule for membership
• Decide how you're going to contact potential members, and how you'll respond
• Figure out what, if anything, members will receive from the organization
• Put together and transmit the actual membership package
• Maintain the program, through list management and contact with and cultivation of members, for as long as your membership program exists.

Congratulations! You're a membership organization.

What is a membership program?

___You understand that a membership program is one that asks people to contribute something - money, time, specific actions, etc. - to an organization, in return for which they become affiliated with it for a set length of time.

Why might you want to establish a membership program?

You know that membership:

___Encourages commitment, and makes people feel part of the organization.

___Can broaden the knowledge and understanding of your issue in the community.

___Builds community support for your organization.

___Can involve members more deeply in the organization.

___Can afford you with a predictable share of annual income.

___May motivate members to contribute to an endowment or make larger annual gifts .

___Can strengthen members' support and advocacy in the community.

___Can establish your credibility with funders.

___Can increase your influence with policy makers.

When is a good time to establish a membership program?

You take into account:

___The best time of year to contact potential members.

___The organization's capacity to mount a membership drive.

___The organization's need for cash at specific periods.

___ The existence of events or periods when - because of the nature of the organization - it's most appropriate to conduct a membership drive.

Who are potential members, and how do you find them?

You know that you can:

___Start with the people you know.

___Target individuals and groups that have some personal or professional connection with the work of your organization.

___Buy, borrow, or trade contact lists from other organizations.

___Circulate sign-up sheets at presentations.

___Go where the money is.

___Build a contact list.

How do you establish a membership program?

You will:

___Develop a system for overseeing and coordinating the membership process.

___Set fees and dues.

You'll contact people by:

___Face to face meetings.

___Phone solicitation.

___Direct mail

___You know about bulk mail

___You know how to write and pretest a membership letter.

___You know how to get membership letters stuffed and mailed.

___E-mail.

___Public appeals through the media.

___Other methods: events, postering, etc.

___You will record and answer members' responses.

___You know how to write a member thank-you letter.

How do you maintain a membership program?

You will:

___Keep building your contact list.

___Keep contact and membership lists up to date.

___Respond to members' offers and requests.

___Keep contact with members.

Tool # 1: A sample membership letter.

Dear [Potential Member],

"For the first time in my life, I feel like a real person. I know what I can do now." -- Francis

"Learning has become really important for me. And my kids see that, and they're doing better in school now, because they understand it's important. Mom's going to school, it must be important." -- Jacquie

"...and I voted for President for the first time this year. I read the newspapers, and I understood what both of them were saying, and I decided who I wanted to vote for. I could actually read about politics and understand it. And it was interesting !" -- Nancy

These are quotes from learners at Reading, Inc., an award-winning adult literacy provider serving Washington County. They, and the more than 300 others who took classes from us in reading, writing, math, and GED (high school equivalency) preparation in the past year, were able to accomplish things they thought were beyond them. By offering them not only educational services, but the opportunity to take charge of their own learning and look at themselves differently, we help learners understand how to take control of their lives. Many earn their GEDs and go on to higher education or to better and more fulfilling work. Nearly all gain skills and an increased respect for their own abilities that they'll carry for the rest of their lives.

We're asking you to join us in this work. Become a member of Reading, Inc. for the next year, and help to make adult illiteracy a thing of the past in Washington County. For your membership of $25.00 or more, you'll receive a quarterly newsletter, an invitation for you and your family to our annual barbecue (Jimmy's famous ribs get better each year!), and the knowledge that you're part of the difference for Francis and Jacquie and Nancy and hundreds of others like them.

Nearly half of the over 19,000 adults in Washington County who lack high school diplomas are unable to read the safety instructions on a medicine bottle or figure their change at the supermarket. As a result, many are un- or underemployed, constantly subject to layoffs, unable or afraid to move up. Furthermore, it's likely that their children will follow in their footsteps: the most powerful statistic we have about literacy is that children's literacy is dependent on that of their primary caregivers, usually their mothers.

Literacy is a core issue. Lack of basic skills is one of the roots of many societal problems, including hunger, homelessness, and crime (about 80% of those incarcerated lack high school diplomas). At Reading, Inc., we're trying to tackle these problems one learner at a time.

Your contribution will help us to pay for what our state funding doesn't cover : rent, most of our administrative and clerical salaries, a computer for our bookkeeper. We're a 501(c)(3) tax-exempt organization, and your membership is completely tax -deductible.

As a community-based organization, Reading, Inc. has always depended on partnership with community members like you. Thank you for your support, and for your recognition of the importance of eliminating adult illiteracy.

Sincerely,

[Director]

Please detach and return this portion of the letter with your membership. Yes! I want to become a member of Reading, Inc. I'm enclosing my check or money order, made out to Reading, Inc., for $25.00____ $50.00____ $100.00____ Other amount____________ Name____________________________________________________________ Address__________________________________________________________ Phone___________________ Fax_________________ E-mail: ______________ I'm interested in becoming more involved in Reading, Inc. Please contact me about : ____Learning more about what I can do ____Volunteering ____Becoming a Board member ____Making a tax-deductible donation of goods or services ____Other

 

Tool #2: A sample thank-you letter.

Dear [Member's name],

We're delighted to welcome you as a member of Reading, Inc. for 2001. Thank you for helping to support the efforts of the more than 300 learners we serve every year .

Your membership contribution is very important to us, because we can use it to pay for whatever we need. Our state funding comes with many strings attached, and we can't use it for many of our expenses: rent, for instance, or most of our administrative and clerical salaries. We depend for operating funds on the support of community members like you. This year, your contribution may help us buy our own copier (we spend hundreds of dollars and countless hours a year having learner readings and office documents copied commercially), may help (finally!) to finance that computer for the bookkeeper, and will, as always, assure that we can keep our space.

Please feel free, as a member, to contact Reading, Inc. with any questions, ideas, or concerns you have, or about getting more involved in our work. There are opportunities to volunteer in the classroom or the office, to join the Board of Directors, to work on specific projects, or to donate goods or services. If you'd like information about these possibilities or anything else, please call or e-mail [name of contact person ] at [phone and e-mail], and she'll be glad to talk to you.

We're enclosing the latest edition of our newsletter, which includes some stories and comments from learners, as well as a description of the Distinguished Teaching Award won by staff member Elaine Marshall. You'll be getting three more newsletters and occasional collections of student writing over the course of the year. You're also cordially invited to our annual barbecue, to be held this year at Jefferson Park in Bigelow on June 9 (rain date June 10) starting at 1:00 p.m.

Welcome to the Reading, Inc. family. We hope you'll take advantage of your membership to become more familiar with the organization, and perhaps to join us in our work. Thanks again for your help and support. Without folks like you, who care about the community, we couldn't do what we do.

Sincerely

[Director]

• Why -- and why not -- would you develop and market products?

• When would you consider developing and marketing products?

• How do you develop products to sell?

• How do you market your product?

• How do you create an infrastructure to run the business?

In the supermarket or the department store, you normally shop for products that are made by small businesses or corporations in order to earn profits for their owners or shareholders. But what if, in a drugstore, you could buy a blood pressure cuff or a pregnancy test kit the profits from which went to the local health clinic? Or if, in a bookstore, you found a parenting manual whose profits went to a youth program? What if Toys R Us sold educational games whose profits benefited local after-school programs?

Developing and marketing products is one way that non-profit organizations can help to institutionalize their services in the community. Sometimes others do the developing and marketing: Newman's Own food products, for example, the brainchild of the actor Paul Newman, turns all profits over to various nonprofit organizations. Many non-profits do their own product development and marketing, however. Museums have gift shops. Most universities market clothing, books, and other products -- not to mention big-time sports events -- that help to fund academics. UNICEF holiday cards are a major force in the greeting card market. Local non-profits often sell T-shirts, or items specific to their work.

In this section, we'll discuss why -- and why not -- you might want to develop and market products; when your organization might want to; what kinds of products it might make sense to offer (developing products); how to go about marketing products you develop; and what sort of infrastructure you need to support a sales operation.

Why -- and why not -- would you develop and market products?

There are a number of reasons why you might decide that developing and marketing products is a good idea for your organization:

• It's a way to make money. If you do it well, it can mean a fairly large, long-term, stable source of income. Furthermore, it's income that comes without any restrictions from funders, so you can use it any way you please.
• It can raise the profile of your issue and your organization. A widely -distributed book, unusual or particularly attractive logo items (T-shirts, mugs, etc.), or other products can capture people's attention.
• It can provide jobs for participants and community members and/or involve them in supporting the organization.

Several human service organizations and a cooperative supermarket in a rural area, for instance, discussed starting a cooperative business to produce healthy packaged foods from organic ingredients (salsa made from nothing but organically-raised vegetables, herbs, and spices, for instance). The business would be run by experienced professional managers, and would use locally-grown produce, meat, and dairy products. It would be staffed by welfare recipients and other low-income area residents, who would be trained in various phases of the operation of the business. It was hoped that the low-income residents would become part of the cooperative, and would ultimately take over the running of the business.

This concept had a number of worthy goals:

• It would provide the human service agencies with a source of income.
• It would provide training, job experience, income, and the chance for cooperative ownership to unemployed, low-income area residents.
• It would provide local farmers with an outlet for their products.
• It would provide the cooperative market with high-quality local products to sell at a reasonable cost (because shipping would be negligible).
• It would provide consumers with good-tasting, healthy packaged food as an alternative to the high-fat, low-nutrition alternatives available in most supermarkets.
• It would provide jobs and add to the local tax base.
• It would provide use for an abandoned factory, thus reclaiming a currently blighted property and restoring it to the tax rolls.

• It can improve the whole organization's understanding of business and marketing, which could, in turn, improve its efficiency, management, and general operating ability.
• It could lend your organization more credibility within the business community, especially if you're successful.

Unfortunately, as with most ventures, this one carries with it some disadvantages to go along with its obvious advantages.

• To start up a business and keep it running requires spending large amounts of both money and time. You can't get started without capital, for instance. For a small venture, that may mean only a few hundred or a few thousand dollars, but it has to come from somewhere.
• Paying attention to the business may take the focus off the real purpose of the organization. You could find the organization becoming consumed by trying to successfully market its product, and becoming less effective in its work.
• By the same token, focusing on making money could lead to the organization 's ignoring its guiding principles, and thereby changing its character. As is discussed many times elsewhere in the Tool Box, you have to safeguard the principles, values, and vision of your organization at all costs. Anything you do that conflicts with them will probably be bad for the organization in the long run, no matter how great its short-term benefits.
• Even if you do everything right, running a business of this sort -- especially if it's successful -- takes constant attention. It may be difficult, with the resources you have, to maintain both the business and the work of the organization.
• As a business, you're at the mercy of the market in several ways.
  • An economic downturn can mean a fall-off in business and an end to profit, at least for a while.
  • A for-profit may see a promising market, and move in as a competitor.
  • The demand for your product may simply dry up, or be replaced by something else.

For all these reasons, you need to carefully consider your position before you decide to use the development and marketing of products as a method of institutionalization.

When would you consider developing and marketing products?

Because it demands careful consideration, the decision to go ahead should include thought about the timing of the venture.

At least some of the following conditions should obtain before you actually proceed:

• You have, or have thought of, something you're really eager to sell. There are several reasons why you might feel this way:
  • It spreads your gospel. A book, for instance, marketed to other professionals and non-profits, explaining a particular successful approach or technique that your organization has pioneered.
  • It advances the mission of the organization. A wellness program might sell products that encourage exercise (work-out clothes), healthy diet (cookbooks), or monitoring health risks (breast self-exam instructions). An adult literacy organization might sell high-interest books aimed at adults at a variety of reading levels.
  • It will enable people to improve their well-being. That might encompass physical and mental health, life satisfaction, relationships with family and others, enjoyment of the natural world, etc. Some products in this category might include blood pressure or blood sugar test kits; books to read to children; bike helmets; or self-help and instructional books.
  • It's particularly beautiful or useful. An example might be a series of prints by a fine artist created specifically to be sold by your organization.
• You have the resources to try it. "Resources" can mean a number of things:
  • You have the staff to carry out the work of the organization and still pay proper attention to this effort.
  • You have one or more staff members with business experience who think this will work, and are willing to put in the time and effort to make it happen.
  • You have an offer from a business or a retired businessperson for help with the process, or a good deal on production, or working capital, or some combination.
  • You have, or have an offer for, start-up capital in a form that's not overly risky (a low-interest loan, a direct investment, a gift, or organizational surplus funds whose expenditure won't affect the work of the organization).

This might be a good place to bring up the subject of risk. Any business venture, no matter who carries it out, bears some risk. The trick, of course, is to try to minimize the risk while maximizing the chances of a good outcome. That's why successful businesses do careful market research and concentrate on quality, but they can never eliminate risk completely... and neither can you. It's important to be aware that you're risking some money and other resources in the hope of a return that makes the risk worth it. You have to weigh the two and be sure that the possible return is, in fact, worth the risk. If it is, go ahead: very little that's worth anything comes with no risk at all.

• You have a solid business plan. It should include a realistic assessment of your level of resources and expertise, the amount of time and money it will take to get started, how long you can afford to wait for the break-even point, etc.

A business plan is just that: a plan for how your business will work, and how you expect to make it profitable. Business plans in general are long and complex, because they're usually presented to potential backers or to bankers in hopes of an investment or a loan. If you're not looking for money from outside the organization, your plan may be relatively simple, but you do need one. Writing a business plan forces you to look at reality, and to think out your situation.

A business plan should include a description of the organization, including its mission. It's important to remember that whatever product development and marketing you do should be in service to that mission, not an end in itself. If the two are connected, all the better. Other elements of a business plan are:

• A description of the product, and a rationale for its selection
• A marketing strategy, including a description of your market research plan
• A management plan, including who will run and staff the venture
• A financial plan, detailing how much money you have to work with, what it will cost to start up the venture and keep it going, what returns are likely to be, how you'll handle cash flow, and an honest appraisal of how long it will take to break even and to start turning a profit.

Whether or not you intend to present your plan to anyone else, writing it will make you think through the venture carefully, and will give you a much clearer picture of what to expect. Remember: you have to be honest. If there are areas that you should be addressing, but aren't, go back and do it. If you don't have the resources to start this venture, you need to rethink what you're doing. Don't just forge ahead without paying attention to reality.

There are numerous  sites on the Web that have information on business plans. Two particularly good ones are BPlans, which offers a number of sample business plans and an online manual; and the site of the U.S. Small Business Administration, which offers a tutorial on writing a business plan and links to related sites.

• You really need a steady source of income that's not tied to a funder's priorities or restricted in any way.
• Market surveys indicate that people are likely to buy what you have to sell. Depending upon the scope of your proposed operation, market surveys might consist of anything from stopping and questioning a few people in the supermarket to complex national research carried out by a high-priced market consulting firm.

There is clearly a range possible here. You can set out to develop and market some organization-specific goods (T-shirts, coffee mugs, tote bags, etc. with your logo on them) to be sold locally to make a few extra dollars. Or you can turn your hand to products that you expect many thousands of people to buy, and that you hope to continue to sell over a long period. As we'll discuss later, market research is important in either case, but the level of research has to match the overall effort and expected outcome.

The reality is that the "T-shirt sales in the office" approach won't ever make you very much money. If you see marketing products as a small supplement to your budget -- enough to pay for some extras not covered in your grants -- then that may be exactly the approach you want to take. If you're really looking at product sales as part of the basis for institutionalizing your organization, you'll probably have to think bigger. Marketing books and other instructional materials to professionals is a way that a local organization can reach a national audience without an enormous investment in either advertising or production.

How do you develop products to sell?

General guidelines

So, you've weighed the pros and cons, and you've decided to go into the business of selling products to help support your organization. How do you decide on what to sell? Your product should meet at least several of the following specifications:

• Your product(s) should have something to do with the organization. People are more likely to purchase your product if they think you might have some reason to know something about it. In addition, it's more likely to reflect well on your organization and your issue if it's related to them in some way. That could mean material for professionals about your issue, health-related items for a health organization, books for an adult literacy organization, safe toys for an organization that works with or benefits children.

At one point several years ago, the gift shop at a natural wonder in the Southwest, located in the middle of a vast desert hundreds of miles from the ocean and hours from the nearest flowing water of any kind, featured ships in bottles for sale. Needless to say, this struck some visitors as inappropriate.

• If possible, it should advance the mission of the organization in some way. Books that somehow educate people about your issue; health-related items; games or kits or instructions related to the activities of the organization are all examples of sale items that might serve to achieve this purpose.
• It should be useful in some way.
• It should be of excellent quality. Offering top-quality products both makes it more likely that people will buy them and demonstrates your respect for the customer.
• It should be affordable, or at least a good value for the money.
• It should be something people will want to buy for itself, not just to support the organization.

Although most of the possible products that are mentioned in this section are directly related to the work of organizations, there is also room for the familiar T-shirts, caps, mugs, and other logo-embossed items that so many non-profits offer. These may be sold in addition to other kinds of products, or may stand on their own. Most of them in fact meet the conditions of the guidelines, and serve to draw attention to your issue and your organization. If they're particularly well-designed, they can become much sought after, and could be a good source of income if they're marketed well.

Deciding on an actual product

There are three essential steps to coming up with a product appropriate for your organization:

• Research. Do some research with potential customers. Depending on your budget, it could be formal or informal. It doesn't necessarily have to involve hundreds of people, but it should involve people whom you might expect to be purchasers of your item. Use interviews, conversations, surveys, focus groups, brainstorming sessions -- whatever you can manage -- to find out what they think. If you already have a product in mind, ask them their opinions about your product as it is, and how they think it could be improved. If you don't yet have a specific product, find out what potential customers need and want that you could supply. In addition, pick the brains of those connected with the organization and other supporters.

The research referred to here and elsewhere in this section boils down to asking potential customers what products or features of products they'd be willing to buy. There are various ways to do the asking, some more reliable than others. A marketing firm might poll -- often by phone -- a specific number of consumers carefully selected at random, or equally carefully selected to be members of one or more particular groups. It might also use other techniques, including:

• Surveys: carefully crafted questionnaires, usually with multiple-choice answers, designed to get accurate information about consumers' preferences.
• Focus groups: composed of people chosen from particular target groups, facilitated by a researcher, these gatherings discuss products and other consumer issues, prompted by the facilitator's questions. (A local focus group doesn't have to be particularly formal. It can be any available group that meets the criteria you're looking for. A high school class can yield a teen focus group, for instance; your weekend softball team can serve as a focus group of people interested in sports.) The interaction among people in the group often provides different kinds of information from that of surveys.
• Structured interviews: one-on-one telephone or in-person in-depth interviews.

Using these and other strategies, marketers try to find out, before new products are offered, whether they're likely to sell. Most non-profits trying to institutionalize can't afford to use a marketing firm, but they can put together focus groups and employ other methods of testing the waters before they make a total commitment to producing and marketing items.

• Response. Act on the information that arises from your research. If a book is seen as having good ideas, but being too densely written, do some serious editing. If customers think your software lacks features that could be easily added, add them. If people want something you haven't thought of, but would be appropriate for your organization to market, consider developing it.
• Refinement. Make sure of the quality of what you have. Work out all the bugs in the software before you release it. Make sure the instructions for your materials -- and the materials themselves -- are clear, easy to use, and work the way they're supposed to. Run the final product by potential customers, especially if you've changed it, to make sure it's something they still want to buy.

Producing your product

Once you've decided on what you want to market, you have to actually get it produced, so that you have something tangible to sell. If you're offering a book or informational or instructional materials, you have to write or program and design it, including whatever other pieces you want the finished product to have: graphics, separate objects, etc. Other items must be designed, too (whether that means determining the logo on a T-shirt or coming up with the total idea and physical design of a game or a mechanical device). That may mean working with a professional designer.

The next step is to find a supplier -- someone who can actually supply you with a finished product you can sell. That may be a publisher, a printer, a manufacturer... whoever can actually turn out finished copies of your product.

There are some issues around working with suppliers that it's useful to consider:

• If you're a local organization, can you accomplish at least part of the production locally? (Items that aren't available locally could be bought from a national supplier and imprinted locally, for instance.) Using local businesses will both make you friends and give you another opportunity to contribute to the community you serve. It also means that your supplier is easily reachable if you have a problem or if you need to confer.
• How will you handle quality control? Get -- and check -- references from potential suppliers, and ask other organizations that market products to rate their suppliers. If you don't have the expertise, try to find help to determine the quality of the products that potential suppliers turn out. Ask suppliers about their quality control process.

Something that often comes up in situations like this is that a particular supplier is a friend of the organization, or has provided an especially good deal, and no one wants to hurt his feelings, even though what he's turning out isn't very good. The problem is that the quality of what you're selling reflects on the quality of your organization. People will judge the effectiveness of your organization's work by the quality of the goods you sell. That may not be fair, but it's reality.

You need to work closely with your supplier from the beginning to make sure you 're getting what you want. You should certainly give a supplier a chance to improve if the product isn't up to your standard. But if it doesn't get better, change suppliers. You can't afford to jeopardize your organization's reputation just to be nice.

• The same rules apply for service as for quality. If a supplier fails to deliver on time, or gets quantities wrong, or over bills, and doesn't improve when you call him on it, find another supplier.

The ideal is to find a supplier who'll work with you as a partner, and who cares about quality and service as much as you do. He'll help you improve and refine your product and procedure, whether that means suggestions about the design of a book cover, or mechanical improvements to a piece of equipment, or changes to your delivery system.

A few words about publishing: If your product is a book or other textual material, you may have some choices about how it gets produced. The standard -- and usually best -- possibility is to have it published by a commercial or academic press. In that case, the publisher will take care of the expense of producing, distributing, and advertising your work. You may or may not get an advance (money in advance to support your writing), but you will get royalties (a percentage of the receipts from the sale of your product).

Commercial publishing, however, produces relatively little income: books geared to professionals do well if they sell a few thousand copies. The return to you may be small (although it may also be measured in prestige and respect in the field, and in opportunities to consult and lecture, which could in fact generate income as well ).

Another option is self-publishing. In this instance, you pay the publishing costs, and do your own marketing. You also can design the product yourself, and you get all the profits from the sale of each copy after a bookstore or other seller takes its cut. Some non-profits have found they could make several thousand dollars a year just by selling their books or materials by word of mouth in the field. They keep costs down by using small, local printers to put out a few hundred copies at a time, and reprinting only when the supply runs low. Since they sell the items themselves, the profit is all theirs.

As is obvious, there are advantages and disadvantages to both commercial and self -publishing. The first is far less hassle and expense, but returns may be limited, and you don't have complete control over the look -- or even the content -- of your work. Furthermore, you have to find a publisher who's willing to print your work. The second affords control and the possibility of a larger return, but also involves much more work, much greater expense, and much higher risk. You need to consider the alternatives, and decide what makes the best sense for your organization.

How do you market your product?

The Tool Box includes a chapter on social marketing, "selling" social and individual change. Most of the guidelines for social marketing come right out of commercial marketing texts, and are totally relevant here.

In brief, successful marketing is defined by some specific principles:

• Be customer-centered. That means that customers' needs and wants guide both product development and marketing strategy. If you do what you think will work, it may work or it may not. If you give customers what they ask for, you have a far greater chance of success.
• Pretest. Once you have a product and a marketing strategy, pretest both with your target customers to make sure they will fly. If not, make the changes that your pretest tells you will make them successful.
• Pay attention to the Four P's: Product, place, price, and promotion. Each of these -- the nature of the product; where and how it's offered; the price, both in money and other factors, that the customer has to pay for it; and how you promote it -- helps to determine whether your marketing effort will work or not.
• Monitor and adjust. Once a marketing campaign starts, you have to keep checking -- both by results and by consulting with customers -- on how well it's working, and make changes to improve it.

A large commercial firm with a new product would conduct a long-term marketing campaign, including a large amount of market research to determine what marketing approach would work best. Most community based organizations don't have the resources for this kind of marketing, but they still need to pay attention to these principles. Here's how a local marketing campaign might work.

The Pryorview Bird and Nature Club has developed a game designed to teach children and adults about local endangered species, and at the same time promote family togetherness in the outdoors. The Club has already pretested the game with a number of families (they loved it), and found a local firm to produce a colorful and attractive version of it out of recycled materials. Now the task is to convince people in the area to buy it.

• Customer centered. What will potential customers respond to? The Club first conducts some focus groups -- members of the PTA and their children, families from the church of one of the Club's officers, people enrolled in parenting courses at the Human Service Center -- to ask what people like about the game, and to try to find out what marketing strategy might work. They find that most people in the focus groups respond to the fact that the game is something fun that parents and kids can do together, and that they can then continue the activities of the game in the outdoors. The Club decides to feature these aspects of the game in their marketing.

They work out a marketing strategy that emphasizes family fun, environmental learning, and outdoor activity leading to practical knowledge. They add the fact that the outdoor activities can be pursued at any season. The Bird and Nature Club finds an intern from the Communications program at the local university who creates a series of newspaper stories that can run in the "family" section, newspaper ads, radio spots (including public service announcements), and copy for both postal and electronic mailings to the Club's mailing lists.

In looking at market segments (particular groups, each with particular characteristics -- age, preferences, behavior -- that might make them more or less likely customers for the product at hand), the Club decides that the obvious target customers will be families with children, and particularly those who already enjoy outdoor activities.

• Pretesting. The marketing strategy is pretested with a number of individuals and focus groups. The most enthusiastic about both the game and the marketing strategy are indeed families with children who already spend time in outdoor recreation. It turns out that nearly everyone really likes the idea of the game leading to four -season fun in the outdoors, and appreciates that it's made of recycled materials. As a result, the marketing material is edited to emphasize those features.
• The Four P's.
  • Product. The product has already been developed and pretested, and found to appeal to the target customers.
  • Place. Where can the Bird and Nature Club best reach its targeted customers ? One obvious tactic is to advertise, in the form of underwriting programs, on public radio, which many potential customers listen to, and to place ads or stories as well in the newsletters of local environmental organizations or fish and game clubs. Another is to place copies of the game in stores that sell camping and outdoor sports equipment, and on the shelves of stores that will promote it as a local product. Yet a third is to sponsor ski reports and similar features on commercial radio, or to place newspaper ads in sections that include reports on outdoor activities. The Club might also make sure to be present at conferences and fairs that emphasize either family or outdoor activities, with copies of the game and information on how it can be used to lead into outdoor activities for the whole family.

The suggestions here are aimed at a local organization without a large budget. There are, of course, alternatives to those named above. Organizations marketing to other professionals would probably advertise in professional journals and present their ideas at conferences, for instance. An organization might establish or upgrade a website in order to market its products.

An organization with the resources could try to market products nationally, either in existing retail stores -- through, for instance, an agreement with a national chain -- or through a mail-order or e-mail campaign. An organization might open its own store, as Goodwill Industries does, to market its products, or might publish and distribute a catalogue, as do many museums. There are as many placement strategies as there are organizations and budgets.

• Price. Because the game is produced and advertised locally, the price can be kept reasonable -- lower, in fact, than the prices of most other comparable games. Since it's available locally, the cost in time and effort for customers to buy the game is low.
• Promotion. The Club has already learned, by pretesting, that it should promote the game as leading to family fun in the outdoors, and as environmentally responsible. Its ads, both in print and in other media, have been written to emphasize that. The member who developed the game has also managed to get herself interviewed both on radio and in the newspaper. In addition, the Club has sent promotional materials for the game to several national media outlets, hoping that someone will want to do a story that may run on National Public Radio, or even on national TV news, as a human interest or environment story. Such publicity could lead to national sales.

Some other ideas about promotion, particularly if you're trying for a larger market than your own community:

You can give out free samples to influential people to use, including people you don't know, hoping that they, in turn, will tell others about your product. Everett Rogers, in Diffusion of Innovations, talks about opinion leaders, people whose opinions influence others. If you can convince them to adopt something new, they'll pull large numbers of people along with them. Let the opinion leaders try out your product. (Book publishers do this all the time. They send college professors free samples of many -- sometimes hundreds -- of textbooks every year, in the hope that the professors will assign some of them in their classes. For the cost of a single free book, a publisher may get back hundreds of orders.)

If you're trying to market a book or materials to other organizations, there are some other paths you might take. One is placing ads in professional journals and magazines, where your target customers are likely to see them. Another is publishing scholarly articles in those same journals and magazines about the techniques or materials you're marketing. This will both gain you respect and whet your colleagues' appetites for the material you're offering. A third tactic is obtaining testimonials from respected people in the field. Customers may never have heard of you, but if you're recommended by someone they have heard of, they might be more willing to take your claims for your product seriously.

Unless you have an enormous budget for advertising on TV or in such national and quasi-national newspapers as USA Today and the New York Times, the best ways to market nationally are probably direct mail, e-mail, and web sites. In the first two cases, this probably means buying mailing lists from other organizations or entities. Direct mail also involves large outlays of money and time for both postage and actually assembling mailings. A website is relatively easy and inexpensive to set up -- especially if you have the in-house expertise to maintain it yourself -- but you have no control over which or how many people you'll reach.

•  Monitor and adjust. The Bird and Nature Club will keep track of how well its marketing campaign is working. They'll look at which ads and outlets are contributing most to the sale of the game, and ask customers why. They'll go back to some of their original focus groups to get feedback on both marketing and on the game. Has it turned out to be as much fun as it seemed? Has it actually drawn families outdoors?

The Club will change its marketing strategy in response to its customers' ideas, and may change the game itself as well, to make sure it accomplishes its purposes. The Pryorview Bird and Nature Club knows that paying attention to what its customers tell it can make the difference between the success and failure of a marketing campaign.

So there you have it: like the Pryorview Bird and Nature Club, you, too, can develop and market a product that both advances the mission of your organization and helps to institutionalize it in the community. There is an issue left, however: managing the whole sales operation. The practical side of the operation has to be attended to as well if you're going to be successful.

Creating an infrastructure to run the business

It's important to remember that, no matter what you're selling and how you're selling it, you also have to have an efficient and well-constructed system for running the product-development-and-marketing part of the organization. In order to keep everything in order, you have to consider a number of areas:

• Taxes and other legal issues. Even though your organization may be tax -exempt, if your state has a sales tax on whatever items you're selling, you still have to collect, record, and pay that tax back to the state on all your sales. You may need a state permit to sell anything, or there may be particular laws or rules for non-profits that you have to follow in order to market products. There may also be particular reports to submit or annual permit fees to pay.

There may be other issues to consider as well. States may have rules about how much of its income a nonprofit can generate from sales and other business ventures and still be considered a nonprofit If your sales effort is really successful, you may have to create a for-profit subsidiary in order to stay within the law. (In this case, the profits would be rolled back into the nonprofit) It's probably worth it to consult with an accountant, a lawyer, or both. (You may have a Board member who can help.)

• Logistics. Depending on the size of your marketing operation, you may need extra phone and modem lines, supplies (order forms, for instance), staff time, etc. This all has to be worked out and monitored to make sure that you have and maintain everything you need to run the business.
• Day-to-day management. Someone has to oversee the actual workings of the business. If you're selling only a couple of small items a day, sales can be recorded in a notebook and the money kept in a drawer. But if you're actually operating a serious business, management is a major concern.
  • Orders. If you receive orders for your product(s) by mail or phone, you need both people and a system to handle them. If you accept purchase orders from other organizations, that further complicates matters. Someone has to set up and oversee an ordering system that makes it as easy as possible to track orders and assure that customers get what they asked for.
  • Inventory. A business needs to keep track not only of how much it has on hand to sell, but of how fast items move, so that it can order more in time to keep from running out. If you are marketing several items, this can be a complicated process. You may want to set up and use a computer-based inventory program, which, in turn, may require UPC bar codes on products and regular monitoring. All of this has to be set up, coordinated, and monitored.
  • Shipping. If you're sending items through the mail or by UPS or FedEx, you need to send the right stuff to the right place in a reasonable amount of time. Orders have to be filled properly and promptly, and sent with as little wasted effort as possible.
  • Dealing with suppliers, shippers, and customer questions and complaints. Finally, someone has to see that everyone's happy, and that both you and your customers are getting what you pay for.
• Fiscal management. Then there's money. Whether you ask for payment in advance, bill customers when you ship their orders, or simply take money as people buy your products, someone has to keep careful track, send bills out on time, and keep after anyone who doesn't pay. You're responsible for recording how much comes in, and taking care of sales tax. The organization has to pay its suppliers and shippers on time, which means someone has to manage the cash flow so that can happen. You also have to keep an account of your sales receipts separate from your organization 's grants or contracts. If you're doing a reasonable amount of business, fiscal management alone can be a big job.
• Other possible issues. The paragraphs above assume that you're conducting a walk-in or mail-or phone-order business out of your current space. That's the way most small organizations run marketing operations. If you're marketing in some other, more ambitious way, however, you'll have concerns in addition to those already described.
• Internet. If you're doing some of your selling through a website, that site has to be designed, programmed, and maintained. Someone has to monitor it regularly, in order to record and process orders, deal with credit card companies (another issue in itself), update information, and handle customer e-mails. There are technical issues to attend to as well, such as how easily the site can be found by search engines.
• Retail operation. If you have a store, even if it's on your premises, as a museum gift shop would be, you will be dealing with:
  • Buying. Can you stock a whole store with only your own products? If not, you'll have to look for related items from wholesalers, monitor how well they sell, and replace or supplement them with others on a regular basis.
  • Presentation. You'll want to set your products out attractively so people will want to buy them.
  • Stocking shelves.
  • Janitorial services and general cleanliness.
  • Security and fire protection.
  • Handicap accessibility.
  • Insurance.
  • Personnel -- procedures, breaks, and other logistics, not to mention such things as salary and benefits.
• Catalog sales. The use of a catalog brings with it the need for the design, production, printing, and updating and reprinting of the catalog itself; a storage and shipping facility that has to be maintained, staffed, and secured; collection and updating of mailing lists; regular mailings and their attendant costs; continued product development and/or buying; and, as with other types of operations, customer service to answer questions, field complaints, and ensure that the operation runs smoothly for those who use it.

Regardless of whether you sell a few T-shirts or CD's every week, or whether you market health educational materials to thousands of clinics, a solid infrastructure is absolutely necessary to the success of your venture. If you can combine it with quality products that follow the general product-development guidelines, and with a marketing strategy that starts with customers, you're on your way to an operation that will help to provide finances to institutionalize your work in the community.

In Summary

Developing and marketing products -- particularly products that reflect the work you do -- can be a way of providing income to institutionalize your organization. Before you start to create a marketing operation, you would do well to consider whether there is a good reason for your organization to do so, whether the potential advantages outweigh the risks, and whether you have the capacity and resources to make it successful.

Regardless of what products you choose or for whom they're intended, they should meet at least some of these basic criteria: They should have some connection to your organization; they should help to advance your mission; they should be top quality; they should be affordable, or at least a good value; and they should be things that people want to buy for their own sake, and not just to help your organization. Use customer research and pretesting to come up with products that people will want, and then continue to refine them based on customer feedback (research/response/refinement ).

Pay attention to the cardinal rules of marketing:

• Be customer-centered.
• Pretest.
• Pay attention to the Four P's (product, place, price, promotion).
• Monitor and adjust.

Finally, create an infrastructure -- the necessary people and systems -- to make sure your product development and marketing operation runs smoothly. If you can successfully negotiate these steps, you're on your way to entrepreneurial success.

Why -- and why not -- would you develop and market products?

• You know the advantages of developing and marketing products:

___It's a way to make money.

___It can raise the profile of your issue and your organization.

___It can provide jobs for participants and community members and/or involve them in supporting the organization.

___It can improve the whole organization's understanding of business and marketing .

___It could lend your organization more credibility with the business community.

• You know the disadvantages of developing and marketing products:

___To start up a business and keep it running takes time and money.

___Paying attention to the business may take the focus off the real purpose of your organization.

___Focusing on making money could lead to the organization's ignoring its guiding principles, and thereby changing its character.

___Running a business takes constant attention.

___As a business, you're at the mercy of the market.

When would you consider developing and marketing products?

___You have, or have thought of, something you're really eager to sell.

___You have the resources to try it.

___You have a solid business plan.

___You need a steady source of income that's not tied to a funder's priorities .

___You've done market surveys that indicate that people are likely to buy what you have to sell.

How do you develop products to sell?

• General guidelines:

___Your product has something to do with the organization.

___Your product advances the mission of the organization in some way.

___Your product is of excellent quality.

___Your product is affordable, or a good value for the money.

___Your product is one people want to buy for itself, not just to help the organization.

• Deciding on a product:

___You have conducted market research.

___You have responded to the results of the research.

___You continue to refine your product.

• Producing the product:

___You've looked for ways to produce at least part of your product locally.

___You pay attention to quality control.

___You pay attention to the service you get from your supplier.

How do you market your product?

___You are customer centered.

___You have pretested both your product and your marketing strategy.

___You pay attention to the Four P's: product, place, price, and promotion.

___You continually monitor and adjust your marketing strategy.

How do you create an infrastructure to run the business?

___You have learned about, and have instituted mechanisms to deal with, taxes and other legal issues.

___You've worked out the logistics of the operation.

___You have the personnel and systems to deal with day-to-day management.

___You have the personnel and systems to deal with fiscal management.

___You have the personnel and systems to deal with all elements of daily operation .