Acct 4650 Fundraising report

Acct 4650 Fundraising report - Fundraising for Non- Profits...

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Unformatted text preview: Fundraising for Non- Profits ACCT 4650 (R10) Chuan Wei — 100110290 Eunji Lee - 100203963 Frank Wu — 100136714 Jeremy Yu - 100217938 Michelle Cho — 100191814 Philip Cheung - 100184546 Susan Robertson - 100121537 Contents Fundraising Overview .................................................................................................................................. ..2 Three Types of Donor Giving ....................................................................................................................... ..2 Annual Giving ...................................................................................................................................... ..2 Major Giving ........................................................................................................................................ ..3 Planned Giving ........................................................................................................... ............... ....3 Motivation for Giving ......................................................................... ............................................. ...... ..4 Fundraising Cycle ................ .... ........................................................................................................ ..5 Grants ........................ ............................................................................................................................... ..5 Foundation Grants ..................................... ....................................................................................... ..E Public Foundations ......... ................................................................................................................. ..6 Private Foundations ........................................................................................................................ Qualified Donees for Foundation Funds ............................................................................................. ..F Tips when Applying for Foundation Grants .................................................................................. Corporate Grants ...................................................................................... ............................................... ..? Government Grants ................................................................................................................ ................. ..8 Provincial Government ................................. ............................................ ........................... ..11 Federal Government ............................................................................ ...................................... ..11 Municipal Grants ................ ........................................... ..................................................... ..11 Developing a Proposal Idea ....................................... ........................................................................ ..12 Project Description ............................................................................................................................ ..12 Community Support ..... ...................................... ....................................... ....................... .... ..12 Locating Grantors .............................................................................................................................. ..13 Writing the Proposal .................................................................... ................................. ...................... ..13 The Concept Paper ....................................................................................... .................................. ..13 Proposal Contents .................................................................... ...................................................... ..14 The Government’s Revised Role in Financing Non-Profit Organizations ............. .................... ...... ..17 Pros and Cons .................................................................................................................................... ..1? The Initial Phase: Changes in Traditional Government Grants ......................................................... ..18 Bibliography .............................................................................................................................................. ..19 Fundraising Overview A survey taken by Statistics Canada in 2007 revealed that "almost 23 million Canadians — 84% of the population...made a financial donation to a charitable or other nonprofit organization" [Michael Hall). Individual, corporate, foundation and government giving is what makes up approximately 61% ofthe voluntary sector's revenue in 2003 (Planned Giving Solutions Inc., 2007). Fundraising is the act of raising funds with the goal of charitable or philanthropic giving. The different revenue sources come from individuals, corporations, foundations, and government. Fundraising is a crucial component for not for profit organizations (NPO) as some NPOS are totally reliant on fundraising to continue operating. Every NPO will have experience with this type of revenue stream. In this report, we will: a focus on how an organization can obtain gig-(grants - explore the different types ofgrants that are available to NPOs based on who awards the A ,/ grants look at how a Not for Profit can start the proposal process once they have found a 6(0 9 grant suitable to their organization I share our findings on how a Not for Profit can maintain any previously awarded grants in the future I summarize how the government has recently changed their way they plan to support charities and Not for Profits Three Types of Donor Giving \/ One way a nonprofit obtains revenues is through donations. There are three main categories which & its“ donor giving falls under: annual giving, major giving, and planned giving. {gt-P by; Annual Giving [)3ng K The most common type of donation is annual giving. Annual giving refers to the smallest type of _ 5(1) gifts with values usually less than $1,000. Because these gifts are fairly small and require little (901' g? decision making on the part ofthe donor, it is common for the donor to give on a regular basis. $1 Furthermore, the gifts usually come with no restrictions on how the funds are to be spent and can I; "a" 1 be raised in many different ways. Although annual giving has the highest number of donors, the é D ‘7 _ amount of revenue raised by these donors is smaller than major and planned giving. Product I. fundraising provides the donor with a good or service in exchange for money. Examples ofproduct 0ru%. fundraising are; bake sales, car washes, charity dinners, concerts, auctions, contests, sport tournaments , the list is practically endless. Sponsorship is when a person donates money when the person requesting has performed a specific activity as part ofa Not for Profit organization. Online fundraising is when the Not for Profit turns to the internet to produce money. Such ways include; Pay by Click, organizations will receive funds every time an ad is clicked on or an article is read or Donate now buttons on website or email campaigns. Grants can also be classified as annual giving but often comes with restrictions on how the funds can be spent. Grants are larger sums ofmoney distributed to the recipient from either a corporation, foundation or an individual. Major Giving A Not for Profit wants annual giving to become a habit ofthe donor where they will eventually upgrade their gift and move on to major giving. Major giving is defined differently by each organization; usually it is the top 10—20% of the donors who make up 70-80% of the gift income (Norris). These gifts can be cash but they can also be donated goods or services-which are In-Kind gifts. In order for major giving to occur, three factors must be present: 1. the donor has a stronger relationship with the organization 2. the donor has similar values with the organization 3. And, the donor has the financial ability to give big Planned Giving The largest stream ofincome for NPOs comes from Planned Giving. Planned giving is a deferred gift that is planned for in the present. This incorporates various types ofbequests, trusts, annuities and other commitments requiring legal documents (Alexander).This gift can be cash, equity or land. These gifts generally come with restrictions on how it should be used and they come from the smallest percentage ofthe donating population. The fundraising pyramid depicts the relations between the three types of giving below. Refer to Exhibit 1. Exhibit 1 Motivation for Giving There are different reasons that corporations, foundations, and individuals give. When fundraising, a Not for Profit should understand the different reasons for giving in order to increase their Chances of receiving donations. When a Not for Profit begins a search for corporate dollars they need to consider how there can be a mutual benefit to the Not for Profit welfare and the interests of the corporation. They will also need to understand a corporation’s business plans and goals and make sure they are in line with the corporation. Many corporations give frequently and have systems in place for giving. Sometimes, Corporations give cash products or services they have by specific foundations they have set up. For example, Home Depot has set up the Home Depot Canada Foundation which is aimed at using their skills, knowledge and resources to develop sustainable homes and communities for Canadians. This structure helps the corporation increase their Visibility in society and build partnerships that are mutually beneficial. Foundation giving occurs when a company sets up a structure to give for a specific cause or purpose. These companies are set up by corporations, individuals or families who have a special interest. For example, the Tiger Woods Foundation is set up with the purpose ofhelping kids go to college. Foundations have strict guidelines that need to be followed when giving. Some have restrictions which are geographical, tax based, or self imposed. Operating foundations only support their own programs and usually do not make contributions to other organizations. Individual donors are more complex with their motivations for giving. Some donors may donate in order to rid themselves of guilt. Some of the individuals give for the following reasons: - Devouts give because ofreligious beliefs. This is the most popular form of giving as in 2007 46% of all donated money was received by religious organizations (Hill) e Communitarians are motivated by the belief that giving makes good sense with business, society or are daily lives. - Investors are concerned with the tax and estate benefits of giving and are interested in what their support will result in. Studies suggest tax breaks do not influence many individuals on the amount ofmoney donated, unless tax rates influence how much an individual is able to give. For example, if you give $1000 and are taxed at 35% your out ofpocket money given is $650 as the $350 reduces your tax liability, ifyou are taxed at 10% your out ofpocket money given is $900 so you might give less ifyou are taxed less. t Socialites give because it provides them an opportunity for social interaction. I Altruists are selfless donors who give without any desire of recognition. - Re payers give based on the gratitude they receive. - Dynasts give because of a family tradition of giving. Fundraising Cycle The fundraising cycle is a continuous cycle aimed at generating and retaining funds from potential donors. The process may begin at any point of the life cycle and should be applied to all types of donors in identifying, obtaining and retaining grants. There are 6 key steps identifies in the cycle: 1. Identify prospects and research who they are and what they are interested in. At this point of the fundraising cycle, corporations, foundations or individuals are identified as potential donors. These prospects may be identifies through existing relationships, past history, current donors and employees. The degree of research on individuals, corporations, foundations or government will depend upon the type of giving pursued. 2. Cultivating the relationship involves contacting the potential donor on a regular basis in order to develop a relationship. Some of the ways in which to cultivate a relationship with a donor would be to invite them out to the organization and events to meet different types of people working for the NPO and benefiting from the programs offered. 3. Soliciting often involves personal solicitations such as a letters, grant proposals, phone calls and meetings. For major giving and planned giving, a nonprofit will already have a good idea if the solicit to the individual will be successful or not. A Not for Profit can also get professional help to develop media advertisings or mail campaigns. Membership fees raise funds and also track those who are interested in your organization. Other fundraising efforts are impersonal letters, e-mail, phone calls, grants and special events such as bake sales, charity balls, golf tournaments, or auctions. 4-. Thanking the donor upon receiving the gift means to acknowledge the contribution and express gratitude. The acknowledgement of a gift can range from a simple thank you letter to a more elaborate thank you- depending on the size of the gift and needs ofthe donor. In deciding how to acknowledge donations, it is important to remember that each donor requires different types of "thank you" arrangements. On the other hand, the donator will remember if they do not receive a thank you and this will impair your future donor capabilities. 5. Stewardship means to follow up with the donor in order to account for the funds received and explain how the money has been spent. Stewardship also ensures the donor that the money has been used within the terms agreed upon. It is important to continue communicating with donors in order to successfully nurturing relationships. The more connected a person or company is to a Not for Profit, the more likely they are going to continue supporting the organization. ‘1‘ a!) T/x—fl w . :1- rants 5 gal" Grants are a type offundraising that a non-profit can obtain revenues from. A grant is "a form ofgift / that entails certain obligations on the part of grantee and expectations on the part of the grantor" (Pynes, 2011). The process to apply for a grant is similar to apply for loans from the financial institution. However, grants do not require any repayment of principle or interest charges. A grant usually contains legal obligation and an agreement which is either presented in a written formal 5 agreement or an informal agreement. Failure to fulfill any obligations resulting from a grant is likely to produce legal litigations; especially for restricted government grants. Grants can be divided into conditional grants and unconditional grants. Conditional grant funds are restricted for a specific project or purpose and may not be used for any others; this type of grant is also called a restricted grant. Most grants provided by governments or large organizations are conditional; so the candidates must be qualified for all eligible requirements. Unconditional grants, also called unrestricted grants, can be used for any purposes that recipients see fit. In most situations, unrestricted funds are usually used for either general operations or events relevant to the organization's mission statement. Grants can be classified by its source into three main types: Foundation, Corporate, and Government. Foundation Grants . Foundations are a type of charitable organization with a principle purpose of distributing grants to .IL lettFElEltEfl organization, institutions, or individuals for scientific, educational, cultural, religious, or 1p L other charltable purposes. Foundations that give grants to support other charities are known as ELI-l7 grant maldng foundations. Approximately 3,000 grant making foundations in Canada distribute good over $1.5 billion every year to support the work of charities and nonprofit organizations. Canada l Revenue Agency regulations require that public foundations give 3.5% of its investment assets annually. Most grant making foundations have endowment and invest the funds to generate an annual income in order to make grants. There are two main types of grant making foundations: public foundations and private foundations. Public Foundations A public foundation is governed by a board with the majority of its directors at arm's length. It derives its support from various sources including other foundations, individuals and government agencies. Common examples of public foundations are hospital, university and community foundations. The main purpose ofa community foundation is to build community endowments that ensure vital futures for a particular geographic community. Donors may have control over the charities that will benefit from their fund, or they may contribute to the community foundation's general endowment fund. The Board of directors from the community foundation will decide how to spend the income from the endowment funds. Private Foundations I’rivate ioundations are controlled by a single donor or family through a board with the majority of directors at non—arm's length. Private foundations obtain their money from family members, individuals or corporaiions. Examples of private foundations are corporate foundations, donor advised funds and family foundations such as Ford Foundation. Corporate foundations [also known as company sponsored foundations] are separate legal entities that maintain close relationshipf with their parent company. They mainly rely on regular contrihutions from the parent company to support other charities or individuals. Qualified Donees for Foundation Funds According to Income Tax Act, a registered foundation can disburse grants of gifts only to qualified donees. Qualified donees are organizations that can issue official donation receipts for gifts that foundations make to them including: a Registered charities - Registered Canadian amateur athletic associations - Registered national arts service organizations - Housing corporations resident in Canada constituted exclusively to provide low- cost housing for the elderly a The United Nations and its agencies I Universities outside Canada listed in schedule Vlll ofthe Income Tax Act Regulations o Charities outside Canada to which Her Majesty in right of Canada (the Federal Government) has made a gift during the last 12 months - Municipalities in Canada o The Federal Government, Provincial Government, or their agents Tips when Applying for Foundation Grants Reading the goals of a foundation and researching its previous awards are always good starting points for a NPO to get a sense of whether sending a proposal to the foundations is likely to elicit a positive response. Most foundations offer information about foundation grants on their website with application forms. A nonprofit seeking a foundation grant should consider how well the goals of the foundation match with the organization and the proposed project. A foundation’s activity generally reflects the interest of the founders. Therefore, big differences in political or social ideals can provide adequate means for rejection. For example, a Catholic foundation is not likely to support an effort to expand birth control services to a high school population. Foundations often ask nonprofits to demonstrate the potential outcomes or benefits arise from t ieir grants. It is important to show not only the direct benefit to their organization, but also the ositive impact to the community as a whole. Many foundations give grants to NPOs based on personal relationship. Therefore, building a good relationship with donors is one of the most important factors in obtaining and retaining any type of potential grant. W Corporate Grants In aoos. corporate sponsorships. donations and grants made up approximately 3% [Planned lCiving Solutions Inc.. Zflfl'i'} of the non—profit sector's revenue in Canada. Corporate grants are grants given by a corporation. or its established foundation to nonprofit organizations. Corporate Grants are the more flexible in terms of the application process as they often require fewer restrictions. Large businesses such as TELllS will often set up a department or an independent committee to process grant applications. With small businesses, decisions are made by the owners andfor the managements. Some corporations set aside a percentage of their profits for giving while others give less frequently. Corporations may provide either cash grants or in—hind gifts. (fay/(1an fieVLmeem c: Co/Z/Qeuvle gem/LR)’ auc/ 4 CKOWQVl/L‘Du 7 Some ofthe motives for corporations to give grants to non-profits are: I to pursue positive public relations I tax reduction I community involvement I society reputation I increase public awareness However, the more common reason that corporations provide grants is to improve the communities where they conduct business in. The hope is that, by helping to make people more educated and communities cleaner, safer and better, business will be stimulated and people are less likely to leave the community. Therefore, corporate grants are typically given to non-profit organizations whose programs match strongly with the values of the corporation’ and benefit the communities where their employees live and work. Most corporations follow a “profitable philanthropy (Library Development Bureau, 2010]" based approach in making grant allocation decisions. That means that corporations take on a high cost conscious approach when deciding what project and non-profit organization they will contribute to since they want to feel that they are getting the most value for their dollar. The challenge of obtaining a corporate grant for non-profits lies in convincing the corporation that the project or organization will provide the most value to them while demonstrating how the project will directly benefit them. Some common benefits that corporations may receive from providing grant to a non- profit are employee satisfaction, publicity resulting in a positive corporate image within the community, and prestige. Furthermore, as public corporations have high levels of accountability to their shareholders, they must insure that the money they give will be utilized efficiently and in line with the corporate mission. As a result, some of the questions that corporate donors will want answered are: who is receiving the grant; what the background of the organization is; how exactly will the money be spent and how much; what contingency plans are in place for the project; how the efforts of the organization is monitored and evaluated; and how realistic the plans and budgets are 1 Government Grants "Even in the most economically challenged of times, the government is one of the best sources of grants [Tim Berry, 2008)." The Canadian government gives away billions of dollars every year in grants and sets up hundreds of grants programs. For the non-profit sector, government funding remains the largest source of revenue ranging from 44-75% depending on the province (Eakin, 2001). Although government funding remains the largest source of revenue in the non-profit sector, a study by Statistics Canada reveals a slight decrease in government grants as a percentage of the sectors total revenue from 1994 to 2004 [Refer to Exhibit 2 on page 9). Exhibit 2 Sector Revenue Trends 700/0 60% 50%) '1 0% Earned income 30% ' Charitabledonations 20% I Governmentfunding ; iuuu |Tit--I L.._i —. .- —.I ""4 1994 1997 199‘) 2002 2004 Source: Data for 1994 come from Hall. Michael, and Laura MacPhersoni l997. A provincial pom‘ait of Canadian charities Research Bulletin 4 (2 & 3). The data for 1997—2004 come irom Statistics Canada 2007. Satellite account of nonprofit institutions and volunteering, 1997—2004. Cat. no. 130 l5-XIE. Ottawa: Statistics Canada. http://dsp- psd.pwgscgc.ca/collection_2007lstatcan/I3»O 15-x1 13-0 l5vXIE2007000.pdr, (Graham, 2 0 1 1) Government funding does not include indirect or non-financial forms of assistance, low-interest loans and loan guarantees, goods or services supplied at subsidized prices, refunds or rebates, and credits in respect to taxes, duties or fees imposed under any statue. The CRA defines Government funding as an amount ofmoney that is paid by the grantor in order to: I support or promote the NPO's objectives but not to pay for goods or services supplied by the NPO to the grantor I provide an exempt sale of goods or services made by the NFC if the goods and services are not for the use or consumption ofthe grantor or persons related to the grantor (for example, government funding of a local health unit to supply medical services to the public). Government grantors may come in the form ofthe following organizations: I the federal government, provincial governments, and municipalities; I a corporation that is controlled by a government or by a municipality and one ofits main purposes is to fund charitable or non-profit activities; I a trust, board, commission or other body that is established by a government, a I municipality, or a corporation (as described above) and one ofits main purposes is to fund charitable or non-profit activities; and I Indian bands. A Government grant entails a contractual agreement between the government and the grant receiver. Upon receiving a government grant, the recipient of the grant must ensure compliance with all contractual agreements. Government grants received by non-profits will be analyzed once they are spent in order to NPOs accountable for their actions. Unlike other types of grants, any project changes must be approved by the government and all project phases must be completed on time. Among the three types of grants, government, corporate and foundations, government grants usually have stricter terms for deadlines and will accept proposals only at certain times of the year. A government fund can either be paid directly to NPOs or through an organization called an intermediary. For example, the federal government provides an amount ofmoney to a national organization; the organization has the right to distribute the money to its provincial institution. The provincial institution also has the power to allocate the government fund to the local department. Isv‘a 9 ’ In order to meet the require ent for being recognized as a government fund, this amount ofmoney must haVe several characterZFii'st. the mono must initially paid by the grantor. Second, even though the money can be distributed throng itiiltermediary, the number ofintermediary cannot exceed two. Third, the amount must be clearly identified as government funding in the NPO's financial statements. Before considering obtaining a government grant, a NPO should consider some important factors. ‘5qu oi'tliese factors involve: successfully raising funds from foundations, corporations, and 'fidividua] St‘OI‘ES may increase the chances ofa NPO successfully attaining a grant since many 1/ government awards require a local match; having the staff capacity and infrastructure in place to manage the grant and handle the reporting requirements; and keep careful records about how the government grant is spent in case ofan audit. In order to apply for a government grant, an organization will be required to submit some ofthe following documents: I a needs assessment or background research I a proposal that provides information on your objectives and how you will achieve them I information on your staff or other personnel I experience history of similar work completed I a comprehensive budget I detailed financial statements. In 2003, approximately 49% ofrevenue from nonprofit organizations was made up ofgovernment grants (Planned Giving Solutions Inc., 2007). The three types ofgovernment grants are provincial grants, federal grants and municipal grants. Provincial grants make up the largest allocation of government grant revenue with federal grants and municipal grants following respectively. Refer to Exhibit 3 below for the approximate breakdown allocations ofgovernment grant revenue. 1U Exhibit 3 % of Government Actual % of Total Revenue Federal Government 14.29% 7% 1 Provincial Government 81.63% 40% 1 Municipal Government 4.03% 2% E Total 100.00% 49% i Breakdown of Government Grants funding 14.2956 I Federal Government l ProvincialGovernment Municipal Government *Values derived from http://www.pgsolutionsinc.com/Statistics.aspx Provincial Government On all three levels offunding, the provincial government contributes the largest stream of revenue for non-profits. In 1993, the provincial government made up approximately 80% of government grant contributions (Eakin, 2001]. Ten years later in 2003, provincial grants continue to amount to about 80% of government grants. Federal Government Federal Grants make up approximately 7% ofrevenue for the average Canadian non-profit in 2003. Most federal grants are awarded to organizations, institutions, and communities which improve specific sectors ofpopulation as a whole. The majority of federal grants are not directly awarded to non-profit organizations. Instead, federal grants are commonly given to provincial and municipal governments for a specific purpose. The provincial and municipal governments that receive the grants will then distribute the funds to projects and organizations they see fit. Federal funders generally prefer projects that serve as prototypes of models that other organizations can replicate. NPOS looking to obtain federal grants may review past federal grants history in order to gain information on the types of projects approved and the types of organizations receiving government grants. In addition, grant seekers may also examining? current and future fiscal budgets to determine the proposed amount of dollars the federal government plans to allocate. Municipal Grants According to the National Survey of Nonprofit and Voluntary Organizations, in 2003, revenue reported from the non-profit and voluntary organizations was made up of 2% from municipal 11 grants. Municipal grants obtained by non-profits are grants given by the local government, usually to improve the community, to meet the community‘s needs, or to plan for the community‘s future. Local government funders almost always require strong evidence of community support for a project. As Municipal governments must balance their budgets and report to the community and in many cases, the provincial government, on where they have allocated funds, grants given from the municipal must reflect the local needs of the community. Depending on the municipal and the needs ofthe community, the requirements to qualify for a grant may vary. Developing a Proposal Idea Project Description The purpose ofa proposal is to provide a briefand concise description ofwhat the project is about. Grantors want to be sure that their goals are aligned with the grantee's goals and that the project has a purpose. Areas ofinterest within the description include: The goals, needs and anticipated outcome of the project A timeline of the project Performance measures Staffing needs Budget Enrp‘WNt" Before an organization starts to apply for grants, they need to identify why it is necessary and what outcomes they expect to achieve. This is similar to a mission statement in the sense that it provides a concise description ofthe purpose of the project, but on a smaller scale. A timeline is necessary as it details how long the project will take and the various stages of completion. Performance measures are stated so that there‘s a way to find out how the project is coming along and what the organization is doing well, or not so well. Staffing needs have to be addressed so the grantor has an idea of how many people are involved and what the ratio of employees to volunteers is. Finally, a financial budget is needed so that the organization knows what level of funding they’ll need. Co__A_uiiity Support After completion ofthe proposal summary, the next step is to secure community support. The goal is to have individuals or groups from political, academic or professional organizations support the grant in writing. These letters of endorsements will detail the extent of financial commitment and in which area they are committed to. Letters of endorsements are often required by the government or larger foundations in order for the proposal to be accepted. A method ofdrawing community support is to attend local meetings involving community leaders. Ifyour project benefits the local community, it makes sense that the leaders will help you out. 12 While most organizations will prefer monetary contributions, services or assets may be contributed instead. These non—monetary contributions may sometimes decrease the amount of funding required. For example, assets that would have been bought anyways are donated will decrease the expenses that would have otherwise been incurred. These non-monetary contributions are usually looked upon more favorably by grantors as it shows a level of cooperation and involvement by other parties outside ofthe grant seeking organization. Locating Grantors An organization has many ways to locate potential grantors. For example, they can look at other organizations with similar projects to see who provided them with a grant and how much was received. Another alternative is to make a list of organizations which share a similar cause. Most grantors provide information regarding who should apply and how they should go about doing it. The government and large foundations usually have a very stringent set of guidelines that need to be followed in order to successfully apply. Smaller foundations may have a more relaxed and informal method when it comes to grant proposals. Regardless ofthe size ofthe grantor, most of them state explicitly who should apply for the grant and how the application is to be submitted. It is important to understand and follow these requirements. Failure to comply may result in reason for a? After coming up with a list of potential grantors, the next step is to either visit or call the _ a representative involved with the grant. This is critical because it helps rejection. organization an f establish a relationship with a member of the organization and they’ll often have tips or advice on how to make the proposal successful. Another method is to call the previous grant recipients from that particular organization. They may again provide tips as to how they secured the funding. Writing the Proposal The Concept Paper After determining which grantors the organization is interested in, a preliminary concept paper can be submitted to each ofthe grantors. This concept paper is brief, usually only a page or two in length, and is used as a form of screening for the grant seeker. The grantors will use this concept paper to determine if they're truly interested in providing funding for the organization. The concept paper is basically a modified version ofthe project description that is tailored for each grantor. Since writing the concept paper can be extremely time consuming, most organizations will haveW Each paper will intrinsically include goals and objectives that coincide with the grantors desired outcome. The grant seeking organization may find it useful to look at the paper from a grantors perspective. ii: is important to state what will happen once the projoct is over; Iariil the project ha- self—aupporting or will additional funding be needed? * 6* “A wi‘li 7+ (ON (404“. __———- A grantor that is interested in the concept paper may provide constructive criticism or advice as to what changes/improvements should be made. After considering these adjustments, the final grant proposal can be written. 13 whee Proposal Contents There are many templates for how a proposal should look Mid what it should include. The _ topics that are absolutely essential include: (firm {'1‘ p“ L; I ,7 Cover Letter and Proposal Summary Introduction to grant seeking organization Mission statement Objectives and Methods Evaluation On-going concern Budget NP‘WPS’JNE‘ The one page cover letter should be directed at the grantor organization’s highest official. The content ofit should reiterate the general goals and objectives of the project and how they're going to be achieved. The cover letter is important as it’s the first thing being seen by the person reviewing the proposal. If it isn’t written well, there’s a possibility that the person may not even read the rest of the proposal. The purpose of the introduction is to make the grant seeking organization look credible. It should include the organization's past achievements, the quality of staff, past grants received, alternative sources of funding and a resume of the individual overseeing the project. The mission statement should describe the purpose of developing the proposal. It should also state who the beneficiaries are and where the problems lie. The grantor organization will also want to know how the problems are going to be fixed and why it's necessary to fix them. It is important to properly identify the critical issues as the causes, rather than the effects. The objectives should be verifiable and quantifiable. For example, the objective should be to try and lower the unemployment rate by 5% as opposed to just saying helping the unemployed find jobs. The timeframe, target audience and anticipated outcomes are an important part ofthe objectives. Also, how the organization intends to reach these objectives is important. The inputs [i.e. people, labor, assets] and the throughput process (how the inputs are used] must be described in detail. Evaluation is an important process that must be performed at selected points during the project. The evaluation can be conducted internally or externally at the organizations discretion. Methods of evaluation include interviews, surveys, observation and questionnaires. There are two aspects of evaluation: Product and Process. Product evaluation is the review of results attributed to the project. Process evaluation is the review ofhow the project has been carried out. Futurefunding is basically outlining what happens after the grant and/or project ends. Outlines of the cost of maintaining and continuing the project have to be made. It should also be stated if 14 further funding, and how much, is needed. A well prepared budget summary helps bolster the organizations credibility and in turn increases the chance the grant will be approved. The summary should state the estimated expenses and additional assets that are needed. Expenses should include salaries, services, utilities, rent, insurance and supplies. It is important that any purchase of equipment is approved by the grantor beforehand. Each of these areas is to be explained in detail and has to be consistent with the other sections of the proposal. The estimations should be as concrete as possible with as much proof as possible. An honest effort should be made to ensure the estimations are not overstated or understated. How to maintain Grants Maintaining the Grants Getting the grant proposal approved and receiving the money is not the end of the process. The fundraising cycle is an applicable process which is essential to the follow up and maintenance of grants. It is equally important for an organization to evaluate how the money is being spent and if things went according to plan. The grantor will also be interested in how their funds were used and the progression of the project. The method in which a grantee informs the grantor about that information is by writing a grant report. About the Grant Report The majority of grantors will explicitly require a grant report to be submitted. Even if it isn’t required, it's still good practice to submit one anyways. They may ask for more than one report depending on the time frame of the project and they’ll usually specify the intervals (i.e. every 3 months). Grantors usually have specific guidelines regarding the content ofthe grant report. Some of them might even provide the grantee with a list of questions to answer or a template, which streamlines the whole process. The main areas that they're mostly interested in are: I Detailed financial statement[s) - Information about the projects outcome I What, if any, unexpected events occurred and how they were handled - Sustainability ofthe project Having a well prepared grant report will help strengthen the relationship between the grantor and grantee, which might result in additional funding in the future. The Financial Statements The main purpose of this is to show the grantor how exactly their money was spent and it should detail how the funds were allocated to the various expenses [i.e. wages, advertising, travel, asset 15 purchases, etc). Grantors will often set tell you exactly what they want to see on the financial statements and how detailed the information should be. The genesis of showing the financial statements are to compare the projects actual budget to the one that was presented in the grant proposal. It's important that the level of detail and disclosure is adequate in the event that the grantor asks for the statements to be audited. It is also prudent that the grantee discloses any major changes in financial health and offers an explanation. Disclosing them up front is better than the grantor discovering it while reviewing the statements as it will show that the grantee is being completely honest. The Outcome of the Project This section is directly connected to what was written in the initial grant proposal. In this section it should be stated whether the projected goals were met and if not, then why. Grantors will want an explanation as to why the goal was not met and what factors attributed the undesirable result. The overall impact and result of the project should also be disclosed. Using quantifiable data (i.e. 50,000 starving children were fed in Africa) will help in illustrating the scale and size ofthe positive outcome. This will help the grantor put into perspective how their funding helped generate significant results. For goals that can't be quantifiably measured, it is important to highlight intermediate findings and results that will lead to a positive outcome. For example, one of the goals might be to reduce the spread of HIV and other diseases as a result of sharing heroine needles. It’s difficult to measure if that goal has been achieved as the results won’t be apparent until sufficient time has passed. Instead, the grantee might want to state that they’ve heightened awareness of this danger through presentations and posters. The Unexpected An often overlooked part ofa grant report is what unexpected events occurred and how they were dealt with. Identifying and evaluating how these events were handled will show the grantor that the “lesson has been learned" and that the grantee will be aware of these issues in the future. It will also show that the grantee is resilient and that they’re able to deal with problems on the fly. Using the above example, the grantee may discover, by surveying, that the posters detailing the dangers with sharing heroine needles aren't being read. In the future, the posters should be placed in more populated areas such as in front ofbus stops or that the posters weren’t eye catching enough. Sustainability of the Project Grantors are interested in what happens after their money has been fully spent. The grantee may decide to secure additional funds to continue the project or they might be already happy with the outcome. 16 a} walk v in" Ifthe project was conducted successfully and there are plans of expansion/continuation, then the grantee should outline a plan. If the grantor is happy with how their money is spent and the outcomes achieved, they may renew the grant and even provide increased funding. A Real World Example ~ The VancouVer Aquarium and the Heart and Stroke Foundation The Vancouver Aquarium (VA) and the Heart and Stroke Foundation (H&S) provided some information regarding their success for maintained and renewed their grants. The vast difference between them is the number of grants they applied. For VA, it applies for approximately 45 grants per year with usually 15-20 grants approved. However, H&S only applies 2-3 grants per year. This shows that different foundations rely on different methods of acquiring revenue sources. The longest grant term was 1 year for both of these organizations so it is suggested that they have difficulties renewing the grants for whatever reason. It might be because their projects only lasted for 1 year or that renewing grants are becoming increasing difficult due to the economic downturn. So far, neither the Vancouver Aquarium nor the Heart and Stroke foundation has any difficulties maintaining relationships with past and current grantors because they have established strong relationships with them. Some of the ways VA has been able to nurture their relationship with grant givers are by providing them WVA provided evidence ofpositive outcomes because of the partnership. Both VA and H&S have successfully fostered their relationships with grantors and deliver well-prepared grant reports to maintain reiatitms. swig“ a P”*"‘L‘ "WP"; - The Government’s Revised Role in Financing 0 O Non-Profit OrgamZfitlons p we ' The Canadian government has dficirdéd to alter the way they finance charitable and non-profit organizations. The general idea of this movement, which is based on Britain’s Big Society experiment, is that the government wants the public and private sectors to take over the financial burden of financing non-profits and charities. This concept has given rise to a new term, social investing, and has generated both praise and criticism. The government’s main mission is to lessen the expectations that are placed on them to financially aid the charitable and non-profit organizations. They're currently looking into new policies and rule changes [i.e. increased tax credits and additional allowable funding sources) and will implement the changes in multiple phases. Pros and Cons Many people View this initiative as a chance for communities to come together and unite. It would raise the level ofinvolvement and awareness on a local basis. It may also raise awareness of charitable/non-profit organizations which may in turn, increase overall contributions. From a 1? philosophical standpoint, it may help eliminate the belief that social responsibilities are should be mainly handled by the government. A cause for concern is that the public isn’t convinced that the government is mainly doing this for the good ofsociety. Due to the recent economic downturn, government bodies are facing deeper and deeper budget cuts. Many people are concerned that this is just a large social budget cut being dressed up with a bow and ribbon. Also due to the proposed increase of tax credits for the private sector, the criteria in order to be deemed a charity have to be tightened. This is to address the possibility for larger corporations, such as companies from the tobacco and alcohol sector, to fund think tanks (organization that conducts research and engages in advocacy). The benefits for these companies is that they receive larger tax credits and they get to promote their messages, which are seen as having negative effects on society. The Initial Phase: Changes in Traditional Government Grants Currently, the government provides funding to all the non-profit organizations that meet their grant terms and guidelines. The main problem is that they have no idea if their money actually helps the organizations meet their goals. As Diane Finley, Minister for Human Services and Skills Development states "We give them money to do it. They receive the money whether they achieve their objectives or not (Curry, 2011)”. The main proposed change is that organization must prove that they are reaching their targets to maintain the grant. This raises the level ofaccountability on the part of the non—profit organization as the onus will be on them to provide adequate evaluation and reporting. How this will be implemented is by initially replacing a small number of traditional grants with hybrid versions. These hybrid versions will still include a principle amount similar to traditional grants. The difference is that increases in the amount will be based on the organization meeting predetermined quantifiable measures. 3/ {(101 [Lo/kmte 6:10am {3*er 9:4. /IM fem Fifi-g: Z! (‘9’ WOMCA Lang, been QAKQTWQQQVYL/‘l 17L (490;: 94:” £1904 _ g ' ' ~ (I HamH lwd’f‘wlucwl 775 Fuudfalfilfiq 94tl¢ Ava Coccé Lowe {TL )La $074; (on/9564A: 4c éowémwd—J 6&4 ' CKI'ILIdo‘Vch lu{“lefl“££ufl mffl; MInfi-ufv “(mi/l. putaf wlmf' 7&4 w.'// ,Lunal . pi tar 37:19:» lac m» A i. a; 1912 MoVL facet/é: fat £9°pnvr 0+: 6+ our (3&5, Norm-DP; 7L5 finial—fright Bibliography Local Government in British Columbia A Community Effort. (2006). Retrieved October 15, 2011, from Sooke: http://www.sooke.ca/assets/LocaINGovernment/Corporate~Services/UBCM%ZOBooklet.pdf Alexander G Douglas, K. J. (2005). Essential Principlesfor Fundraising Success. San Franciso: John wiley & Sons Inc. Canada Revenue Agency. (n.d.). Certification of Government Funding. Retrieved October 23, 2011, from Canada Revenue Agency: http://www.cra-arc.gc.ca/E/pbg/gf/gst322/gst322-08b.pdf Curry, B. (2011, October 29). Philanthropy: Ottawa looks at rewriting rules on charitable giving. Retrieved October 31, 2011, from The Globe and Mail: http://www.theglobeandmai|.com/Iife/giving/giving-news/ottawa—Iooks-at-rewriting-rules—on- charitabIe-giving/article2216738/page1/ Eakin, L. (2001). An overview of the Funding in Canada's Voluntary Sector. Retrieved October 24, 2011, from Voluntary Sector Initiative: http://www.vsi— isbc.org/eng/funding/pdf/overview_of_funding.pdf Gerli, M. F. (2007, May 25). How to Develop and Write a Grant Proposal. Retrieved October 15, 2011, from Mikulski Senate: http://mikuIski.senate.gov/constituentservices/upload/L07- h0wtowritegrant.pdf Graham, L. E. (2011, October 17). Canada’s Non—Profit Maze. Retrieved May 2009, from Wellesley Institute: http://we||esleyinstitute.com/fiIes/Canada's%20Non-Profit%20Maze%20report.pdf Kluge, D. (2011). US Government Grants. Retrieved October 17, 2011, from Proposal Writer: http://www.proposa|writer.com/govtgrants.html Lord, J. G. (1990). The Raising of Money:Thirty-Five Essentials Every Trustee Should Know. Cleveland: Third Sector Press. Michael Hall, D. L. (2009). Caring Canadians, involved Canadians: High/ightsfrom the 2007 Canada Survey of Giving, Volunteering and Participating. Ontario: Minister of Industry. Michael Hall, D. L. (n.d.). Statistics Canada. Retrieved October 18, 2011, from Caring Canadians, Involved Canadians: Highlights from the 2007 Canada Survey of Giving, Volunteering and Participating: http://www.statcan.gc.ca/pub/71-542-x/71-542-x2009001—eng.pdf Montgomery, F. (2009). How to Write a Grant Report. Retrieved October 31, 2011, from http://www.ehow.com/how_5714825_write—grant-report.htm| 19 New Jersey State Library. (2010). Applyingfor Foundation and Corporate Grants. Retrieved October 13, 2011, from Library Development Bureau: http://Idb.njstatelib.org/Grants/grcorpfd Norris, J. (2011, October 27). In Class Presentation on Fundraising. Philantrophic Foundations Canada. (2011). FAQ. Retrieved October 17, 2011, from Philantrophic Foundations Canada: http://pfc.ca/en/resources/foundations-in-canada/faq/ Planned Giving Solutions Inc. (2007). Canadian Statistics. Retrieved October 20, 2011, from Planned Giving Solutions Inc.: http://www.pgso|utionsinc.com/Statistics.aspx Pynes, J. E. (2011). Effective Nonprofit Management. New York: M.E. Sharpe. Satterfield, B. (2010, May 25). An Introduction to Grant Reports. Retrieved October 31, 2011, from http://www.charityvilIage.com/cv/research/rprop9.htm| Sharpe, A. (2007, December 3). Grant proposals must promotefunder's goals, not yours. Retrieved October 17, 2011, from Charity Village: http://www.charityviIIage.com/cv/research/rprop7.htm| The Minister. (2011). Local Government Grants. Retrieved October 20, 2011, from Ministry of Community, Sports & Cultural Development: http://www.cscd.gov.bc.ca/lgd/finance/grants.htm Tim Berry, S. P. (2008). 3 Weeks to Startup. Entrepreneur Press. Witzel, B. (2005, September 6). Selling your idea tofunders. Retrieved October 15, 2011, from Charity Village: http://www.charityvilIage.com/cv/research/rprop6.htm| Worth, M. J. (2009). Nonprofit Management Principles and Practice. Thousand Oaks: SAGE Publications, Inc. El} ...
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Acct 4650 Fundraising report - Fundraising for Non- Profits...

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