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Column 6
Four Funding Dilemmas
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Dear Kim,
My husband and I have produced the World of Possibilities Disabilities Expos in Maryland and Virginia from the basement of my home for three years now with no support from grants or sponsorship. This major high profile disabilities event attracts and serves thousands of people who need these
types of products and services. The expo is free and even offers free wheelchair repair service (usually $100/hour!). Eventually, the vendors will come and the event will pay for itself. I am very committed to serving this population (as a parent of a child who has a disability) and one day
having the best expo in the country.
I hope I am headed there now, but for the moment my husband and I are financing the event ourselves.
Do you know of a way to help me obtain funding to continue? I have sent hundreds of sponsorship kits, letters, foundation requests, small unsolicited grant requests, etc. Obviously, I don't know how to do it properly, but my intentions are honorable, I assure you. Unfortunately, I am an army
of one right now. I hope you have a heart for this audience and will be able to guide me.
Thanks,
Where there is a will, there is a way.
Dear Will,
You are in the classic position of many small businesses in that you are undercapitalized. You have financed the expo the way many entrepreneurs do, with your own resources. Your dedication is commendable, and I am sure thousands of disabled people and their families and advocates are grateful
to you.
You have begun the process of fundraising with all the materials you have sent out. You have created packages for different audiences and tailored your message. However, you must do the next thing which is follow-up. You need to call all the people and places you have written to and ask them
if they have received your information, and ask them if they will be able to help. You will have slightly different points for vendors than foundations. To make this a slightly less daunting task, just follow up on the people you have written to this year. Organizations rarely receive money
from correspondence just sent by mail or email. There must be follow-up.
I would also have to add that there is very little funding for things like expos and conferences, and there is little funding for disability issues, so I would not make foundations any priority.
I also question making the expo free. I know that people with disabilities have higher rates of unemployment and poverty than the population at large, but the people who are able to get to your expo could afford a modest entry fee ($5-10). You could also have a booth at the fair that
describes the work of your organization and asks for donations. My experience is that people prefer to pay for things—no one wants to be a charity case. Ditto with fixing the wheelchairs. If a person would normally pay $100, then ask for a donation of $10-20, or ask people to pay what
they can.
Finally, you need a team of people to help you, such as a board of directors or a fundraising committee. One person cannot be an organization. As you are experiencing, it is too exhausting. Unless you and your husband intend eventually to make money from the expo, you should not be financing
it alone. Ask for help. You will be amazed at how many people will be glad you did.
Dear Kim,
May this find you well and also, thanks for the comprehensive and inspiring responses to your readers. I have spent over 16 years involved with a national charity devoted to "encouraging and balancing" children from ages 7 to 18. There is a need for continued support of participating children when they leave the program to help them pay for higher education. The number of program graduates
actually completing either trade school or college afterwards is low due to the lack of funding.
My research led me to think that creating a full-blown foundation would be difficult, to say the least. Another option is to create an organization funded simply to help students find out about and apply for scholarships and grants. Should I approach major lenders, individuals, and
foundations, and which way would be the best way to fund this endeavor—create a separate foundation and raise funding for program graduates, or act as a nonprofit organization devoted only to making connections for graduates?
Signed,
Choices
Dear Choices,
Actually, I think your best bet is to add a guidance counseling component to your existing program, and work with soon-to-be-graduates to help them apply for scholarships and financial aid to the institutions that are most appropriate for them. You are right that to create a foundation with
enough money to pay for all your graduates to go on to higher education is daunting, to say the least. It will make more sense as a program area in your existing nonprofit—you can use the reputation you have developed over 16 years to raise the money, and over time, I would suggest
approaching your graduates by creating an alumni drive. In the meantime, helping students decide what school options are best for them and how to pay for those is a logical service to add to what you do now, and it allows you to access all available scholarship funds for your students.
Good luck.
Dear Kim,
Our organization is largely funded by grants from corporations and corporate foundations, however most of the grants are for specific, short-term (three- to six-month) projects. Thus, we are constantly fundraising throughout the year to access grants
for each new upcoming project. Also, we charge each sponsor/donor a management fee that goes to cover our overhead costs, therefore our ability to cover overhead is completely dependent upon the success of our project-specific fundraising. To provide our foundation with more consistent funding,
especially for overhead, we would like to create an endowment. We have identified some individuals who might be willing to contribute, but we're not sure how to set things up.
We are based outside the United States so our legal framework will be different than for U.S. organizations, however if you could help us understand the basic mechanics of setting up an endowment (what we need to do, what to consider) or where we could go (preferably online) to gather reliable
information, we would be very grateful!
Many thanks,
Amy from the Philippines
Dear Amy,
As you know, an endowment is a pool of money invested to grow so that you can take out about 4-5 percent of it every year without decreasing the principal. So the first question is whether you have the donor base to create a pool of money that big. If your annual operating costs are $100,000,
you will need a $2 million endowment, for example.
To set up an endowment requires a motion of the board of directors which creates this pool of money. The board needs to create an investment policy (how will the money be invested and who will supervise that?), an invasion policy (are there any circumstances under which the principal can be
spent—invaded—and what are they?), and a gift acceptance policy (what kind of gifts will you accept for the endowment?). Donors must feel assured that if they make an endowment gift, it will be invested wisely and it will not be squandered. Donors have to give serious thought to
making endowment gifts, as they are much larger than annual gifts and will generally not be repeated.
You didn't ask this, but I would suggest considering the creation of a donor base of individuals who will help you with general operating costs and asking them for support each year. Over time, as they see the quality of the work you do, they may be willing to give you larger endowment
gifts. It is usually very difficult to start an endowment without an established base of individual donors.
This is a brief introduction to endowments. I suggest you go to my website at Grassrootsfundraising.org, go to the Article Finder, and order the series I wrote on endowments for the Grassroots Fundraising Journal. This will provide
you with a much more comprehensive answer to your question.
Dear Kim,
I prepare the donor lists for my nonprofit's annual report and other publications. Since so many gifts from individuals now come from family foundations, charitable trusts, and donor-advised funds, I am wondering whether there is a "best practice" for how to list these gifts? For example, if
John and Jane Doe pledge us a gift and then the gift later comes in from, say, the Good Neighbor Charitable Trust, do we list the trust name or John and Jane Doe? I find the possibilities complicated and just want to do the right thing (when the donor or trust doesn't specifically say how
they'd like to be listed). Are there standards, other than contacting the donor specifically for their preference? Can you make your best recommendation for various situations?
Acknowledging Details
Dear Details,
You have raised one of the many questions that often makes fundraising feel like being stoned to death with popcorn. Make sure you have thoroughly read any correspondence that comes from the family foundation, as they often will say in fine print, "In acknowledging this gift, please use our
full legal name, the Good Neighbor Foundation." If that doesn't yield any help, the best practice is to ask the donor how they would like to be listed. This will save you the most grief. When this is not possible, list the name of the foundation rather than the donor. Some donors give through a
foundation in order to remain low profile and you would be respecting that. Proactively, try to get the people soliciting these gifts, who have the relationships with these donors, to ask the donors how they wish to be listed.
Good luck,
Kim
If you have a question you would like Kim to answer please email reading@idealist.org with the subject line "Dear Kim". Please note: Due to the large volume of email received, Kim will not be able to answer all the questions asked or respond
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