The IRS expects that nonprofits will raise funds to offset a percentage of their costs, thereby lowering their cost to the public. Another aspect of measurement is what public good the organization offers. It is not the intent of the IRS to provide an opportunity for a nonprofit company to compete at lower costs than a for-profit.

Questions to ask:

Why is my organization worthy of financial support?

What portion of the dollars we raise will actually be put towards the services we provide?

What is the outcomes measure and how does it show that the organization is successful? How big is the issue the organization is trying to address?

How much of the issue is the organization trying to address itself?

What is the impact of the issue in the geographic area the organization services?

What would it take to address the issue in the geographic area the organization services?

What amount of money is being used to fund raise in comparison to the amount raised?

 

I have read too many 990’s and fiscal statements of nonprofits where no funds are raised, little is raised, or the proportion of money spent to raise funds of the amount actually raised is more than 25%, sometimes actually resulting in a loss.

 

Most nonprofits are doing a terrible job for one reason only - the lack of planning. So stop complaining and get your organization organized. The Executive Director and Board should be the leadership and base in this effort. It does not take hiring permanent staff to get the plan implemented. An organization can hire part-timers or consultants to assist in developing a plan or direct the implementation of the plan until there is adequate capacity in an organization. I have estimated that in any given week an Executive Director could contact 8-12 potential donors and only for up to 40 weeks.

 

So when was the last time you called a potential donor? When was the last time board members gave to your organization? When was the last time the board members helped to solicit money for the organization?

 

It is time to really make raising funds a priority for the Board and 25 % of the Executive Director’s time.

This entry was posted on Tuesday, September 18th, 2007 at 12:01 am and is filed under Fundraising, Volunteering, Corporate Giving, Online funding, Business Plan, Strategic Planning, Program Development, Public Policy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.