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Dec 24
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A Health Checkup for Nonprofit Organizations

By | Nonprofit | No Comments

Wouldn’t it be great if our organizations could get a checkup the way we go to the doctor to get a checkup? When you go to the doctor for a checkup, she takes your blood pressure, listens to your heartbeat, and generally checks your vital signs to ensure they’re within normal parameters. Anything that stands out as unusual can be investigated and, if possible, corrected to ensure you stay healthy for a long time to come.

Nonprofit organizations could also benefit from checkups. Their financial health, along with their overall operational health, needs to be in tip-top shape to continue fulfilling their mission for a long time to come.

Here are seven “vital signs” to check on the health of your nonprofit organization. If anything is amiss, it’s time to speak with Welter Consulting, your nonprofit counselor, to correct it before it becomes an emergency.

Seven “Vital Signs” to Check on Your Nonprofit

The ‘vital signs’ in this list fall into three major categories:

  • Financial: dealing with the nonprofit’s funding
  • Operational: dealing with the organization’s corporate infrastructure, culture, or programs
  • Marketing: how the organization appears before the general public and donors

The following are typical signs of a troubled organization. Check these ‘vital signs’ against your organization. If you see any, it’s time to take action.

  1. Chronic cash-flow problems: Are you always scrambling to find the cash to pay the bills? How about chasing after receivables and invoices each month? Persistent cash flow problems are a sign that something is amiss in the way you’re running your nonprofit.
  2. Crisis-driven funding: A grant dries up, and there’s a scramble to fill the gap. Or there’s a push for an emergency funding drive because no one realized that the coffers were running low to fund the programs to the end of the year. Anything with the word “crisis” in it should be a red flag that something unhealthy is brewing in the organization.
  3. High staff turnover: High staff turnover in any organization or company is a big warning sign of an unhealthy corporate culture. It usually means high stress and little fulfillment for the employees. At a nonprofit, it may also be a sign of a dysfunctional organization that makes it difficult for people to do their work. High turnover rates are a big warning sign that should be investigated immediately.
  4. Burnout: Burnout goes along with high attrition rates. Burnout means that people no longer care about their work. They may continue to work at the nonprofit or volunteer out of a sense of obligation, but the passion, the drive, the fire to fulfill the mission is no longer there.
  5. Loss of programs: Programs are quietly retired without much ado. Instead of an outcry that it’s needed, such programs fade away for lack of participation.
  6. Adding many new programs at once: The flip side of loss of programs is the frantic push to add more programs. It’s as if the new programs will somehow “make things right” within the organization. The feeling one gets amid all the new programs being added is a feeling of frantic desperation rather than healthy growth.
  7. Bad press or negative mentions from the public: One or two bad mentions may not signify much, but consistent questioning of the organization’s leadership, mission, and funding are red flags that the nonprofit is sending signals that it’s not doing what it’s supposed to be doing to support its mission.

All nonprofits, even the healthiest ones, may pass through one or all seven of these issues at any given time. The point isn’t to check off each one with a sigh of relief – “Whew, glad we don’t do that!” – But to see if it’s a chronic problem. Chronic, long-term issues, such as high turnover or poor cash flow, can sap the energy of an organization to the point where it begins to falter. One quarter of high turnover may be a blip on the radar, but a year of people coming and going can seriously degrade the morale of those left in the organization and leave it leaderless. Look for patterns rather than a checklist of vital signs to spot problems.

Welter Consulting

If you’re not sure how healthy your organization is, then speak with the experts at Welter Consulting. Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information or to schedule a ‘vital sign checkup.’

Dec 17
0

Gain Donor Support for Overhead and Infrastructure Dollars

By | Donations | No Comments

After stories in the media showcased lavish travel and other perks among some nonprofit leadership, the public outcry became deafening. The public believed that their cash donations should go directly towards the people they thought they were helping. Nonprofits, eager to prove that they were using funds wisely, began touting the percentage of donations that go ‘directly towards helping those they serve.’

The problem with this model, however, is that it doesn’t address the ongoing need for funds to support overhead. Yes, overhead. Many nonprofits bemoan the limited funds given to them for overhead, yet do nothing to educate the public about why donating to general funds that include overhead, marketing, and administrative costs are necessary.

Nonprofits Are Businesses

Part of the problem is that many people still believe a nonprofit organization is in effect a full charity with zero need for funds for things like office rent, utilities, computers, telephone services, and salaries.

People seem to equate the nonprofits of the 21st century with the charitable organizations of the 19th century. You know, the ones you see in movies, run by ladies with leisure time out of their sitting rooms over cups of tea.

Okay, so we exaggerate, but there’s still a public perception that nonprofits aren’t businesses but charities that should give away all of their funds.

While it is true that nonprofits do not seek a profit margin the way for-profits do, they do need margin to continue their operations, and they certainly need capital to go towards infrastructure.

Ratios Can Be Misleading

Touting the proportion or percent of funds going directly towards programs can be misleading. If 99% of the donated funds go towards programs, nothing is left to pay the bills. And if you can’t pay the bills, the nonprofit won’t be able to continue operations. It’s not an either/or scenario – either funds go towards programs or overhead. It should be both.

Every Penny Goes Towards Supporting the Mission

Instead of promoting the percent of funds that go directly to the nonprofit’s recipients, it would be better if organizations promoted how their donations go towards supporting the overall mission of the organization. After all, every penny donated to a nonprofit, whether earmarked to pay the water bill or to buy food for the homeless, goes towards the support of the organization’s mission.

A few ideas to help you showcase your mission rather than the ratio of funds going towards program recipients:

  • Use images on social media to showcase the recipients without promoting percentages
  • Explain how you track and monitor the use of funds, and reassure donors that all money goes towards fulfilling the organization’s mission
  • Disclose the needs of your nonprofit for overhead and infrastructure. Don’t skip over it in your messages to your constituents. If you need funds for a new roof or to pay the electric bill, say so.
  • Showcase how your nonprofit is more efficient or effective this year than last year — share program results and outcomes

Nonprofits, like any other organization, need money for their infrastructure. By including transparent, honest messages in your marketing to donors and potential donors, you’ll avoid the trap of focusing only on the percent or ratio of dollars spent on direct programs and help raise awareness that yes, overhead and infrastructure are essential, too.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Dec 10
0

Outcomes Measurement Is All the Rage, But How Do You Quantify It?

By | Nonprofit | No Comments

If you run a nonprofit organization, the chances are good that somewhere along the line, you’ve heard the phrase “outcomes measurement.” You may have read it in an article like this one, in a book, or perhaps attended a workshop or seminar where the term was mentioned.

Many people assume they understand what outcomes measurement means, but when asked to quantify it, they stumble for words. “Well, my program encourages children to read more…read anything, really.” Okay, but how do you measure the impact of your program? By the number of children enrolled, the number of books they’ve read, or another measurement?

Output or Outcome?

The example above of a children’s reading program is an excellent illustration of how many people confuse outputs with outcomes. Outputs typically refer to raw numbers: the number of children enrolled in the program, the number of books they read, the hours spent reading.

Outcomes differ from outputs because they measure change. The outcome of a reading program must measure changes in reading habits to measure the outcome effectively. The stated outcome of the children’s program to encourage children to read more and to love reading. To measure the outcomes, the program’s leadership must find a way to measure the participants’ attitudes towards reading and reading habits before and after completing the program.

Do you see the difference? Outcomes always refer to change—a change in habits, thinking, or behavior. Program outcomes should be considered long before you sit down to measure them. Most nonprofits do this automatically by considering what impact they wish to make before embarking on a new program. The emphasis shifts from activity to change, which is the ultimate goal of most nonprofit programs.

Even if you haven’t considered the ramifications of outcomes versus outputs measurement, it’s never too late to find a way to measure outcomes. The Council of Nonprofits has an excellent page of resources that will help you learn more about outcomes measurement. It includes tools from places such as the Kellogg Foundation, GuideStar, and the U.S. Department of Health and Human Services, to name a few, that will help you improve outcomes measurement.

Why Measure Outcomes?

More and more, nonprofits must provide outcomes measurement data to foundations and other sources of funding. Grantors and foundations prefer to put their money behind programs that make a difference in the world, and the measurement of that difference or change is what outcomes measurement is all about. Without this data, they may wonder whether or not your program actually does what it says it will do.

Outcomes measurement is also critical to cultivate public trust. The public needs to know that they’re donating money towards programs that work. They want to see that their hard-earned money goes towards something that inspires the change they wish to see in the world. With outcomes measurement data, you can easily and quickly show even the most skeptical donor or foundation that yes, your program works, and here’s the proof.

Measuring the impact of programs takes time and effort, but it is worth it. The data generated from outcomes measurement can go a long way towards helping your nonprofit gain public trust and receive more funding.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Nov 19
0

7 Common Grant Writing Mistakes And How To Avoid Them

By | Grant Management | No Comments

While individual giving makes up a large portion of funding for a nonprofit, grants can be instrumental in rounding out fundraising plans. All too often grant proposals are dismissed quickly after the foundation or corporation receives it. Poorly researched proposals and other glaring mistakes cause more harm than good. In this article, we’ll summarize seven common grant writing mistakes and how to avoid them.

Mistake #1 – Rushed Research

Learning about the granting organization is the most valuable part of the proposal writing process. Start by reviewing the last three years of grant winners. What do they have in common? How can you target your grant so that you have a better chance of receiving funds?

Mistake #2 – Tardy Applications

We know that work can get busy, but that is not an excuse for turning in your grant application late. Always be on time!

Mistake #3 – Too Much Content

It is important to provide proof of the excellent work your organization is doing. Pick and choose what you would like to present. Too much information overwhelms reviewers and makes you seem disorganized. Refine the enclosures to support the central message of your proposal.

Mistake #4 – Unclear Proposals

Vague language derails many proposals. Be specific about how you plan to use the grant funds and how it aligns with both your mission and that of the foundation providing the funds. Remember that a grant proposal is a plan of action, not an educational brochure or annual report. Explain the problem but then move on to clearly explain what you’ll be doing about it.

Mistake #5 – Numbers That Don’t Add Up

Create the budget and check it twice. Make sure that the numbers included is both realistic and accurate. The financials should support the logic that flows through the proposal. Err on the side of realism rather than optimism and have someone double check your figures.

Mistake #6 – Failure To Plan For The Follow Up Call

You get a call from the foundation, and your application is part at the top of the consideration list. Now they have specific questions about the programs outlined in your application. Don’t be caught off guard. Have a comprehensive plan ready to share with foundation directors when they call you.

Mistake #7 – Not Saying Thank You

Regardless whether you get the grant or not, it’s always appropriate to show appreciation. Thanking foundation directors and anyone else at the organization who helped you with the grant application is the right thing to do. A sincere thank you goes a long way towards making a positive impression for your organization.
Winning grants takes time and effort and can be stressful. With these tips, you’ve just stepped ahead of many others who aren’t taking the time to learn more about the grant application process.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.