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hello hello hello it's holly rustic again with grant writing and funding and in december i have a special co-host with me dr beverly browning dr beverly browning is the author of grant writing for dummies among many other things so definitely i'm super excited she's here with me today welcome again dr bev hi i'm so excited to be back this has been an awesome month of recordings holly i love it yes it's so much fun with you so i'm loving closing out 2020 with a great friend um it's feeling very communal so we're having a lot of fun on it so thank you so much but we also have a great thing coming up so if you have not heard about it yet we are doing the nonprofit startup academy in january and we do have an early bird special going on until the end of december so make sure you check out grantwritingandfunding.com forward slash 149 um to get all of the the links and the the goods on it but what it's uh just to break it down real quick we will be doing a live training over four weeks so once per week for four weeks in january a live training on how to get a non-profit started up or if it's plateaued to grow it or if you want to offer this as a service if you're a freelancer or a nonprofit consultant to get all of the training your questions answered we'll have live q a as well as tons of templates for you to really start um you know just a sustainable non-profit and grow it so yeah so i'm super excited about the nonprofit startup academy so over the all of december we are breaking down some different components on nonprofits and we're showing a lot of red flags a lot of myths and today we are going to break down the money money money so the mindset and the myth behind all of the money and the finance how do you get the funding streams for a non-profit so dr above is definitely going to be diving more into this today i'm super excited to hear more about this and to lend a tip or two as well so yeah so dr bev you want to kind of talk about the money money money behind nonprofits and where they can find it and what they should be looking for i do hi everyone so let's talk about first of all where does the new non-profit that's just starting up look for money well should it be we're gonna get a grant and that's going to help us pay all the bills and i'm going to be able to quit my job and draw a paycheck right away or oh funders will just flock to us once we do a press release or a public service announcement on our new non-profit well don't hold your breath the bucket's going to be empty see nothing's coming out this is called the bucket of discouragement hope and putting too many balls in one place or too many thoughts in one place so how do you get started well first of all seed money seed money comes from your board special events like fundraisers anything that you can do to bring in dollars it can be a ticketed event or it can actually be a gofundme as part of your startup funding to do that you can also have a website that has your products or services maybe one of your board members is really good in making clay items like um coffee mugs that are personalized or they buy them in like by the let's say gross and they're all plain white and because they're artistic they can paint on different designs and names and customize them and they donate that as their share of the give or get policy that your board's going to have we talked about that in an earlier podcast and because of that now you have something that you can actually sell for 399 599 on your website yes you have to have a website so the funding stream isn't going to flow until these things are in order you're branded you absolutely have a website you have social media awareness and guess what your nonprofit has a profile listed on guide star g-u-i-d-e-s-t-a-r dot org it's called candid by i think it's called candid by guide star now yeah they emerged yeah but can definitely find it guidestar.org yeah if they can't find you there you're not getting money also let me just step back a little bit i need to tell you about the calls i get from people who tell me that i have a non-profit i've had it for two years we're ready to look for grants can you send me a copy of your irs tax exempt letter um well we're just a non-profit in the state of alabama and we filed it with our corporate commission and we're going to use that i mean we don't need a 501c3 we're not going to ask for money outside the state of alabama well hey you do need a 501c3 because these potential funders corporate sponsors foundations they can't legally award a grant to your organization if you're not tax exempt otherwise their own status as a 501c3 charitable foundation is at risk when they give money to a non-tax-exempt entity so you absolutely have to have that irs letter to talk about money money money money money literally so the funding stream starts at home with your board your family your friends anyone that can donate and contribute to you but before they contribute they need to know that they're going to be able to claim it as a contribution on their tax return for their selves individually or as a business and if you don't have that irs 501 c 3 tax exempt letter they don't have a write-off for a legal contribution so all kinds of dominoes will fall if you're not ready for the money to come in so first layer the money comes from family friends people who believe in you and want to help you get started and no you cannot pay them back from the first grant award when that finally comes in a couple of years down the road not alone that's right it doesn't work that way it's not that kind of an investment it's a contribution in addition to that your board has to be able to help bring money in who do they know who are they connected to so when you have 12 people on your board and all 12 people are living at or below the federal poverty level are they really going to know movers and shakers and money makers and people who can actually give money to the organization not likely because their little tribe of people that they know they're all in the same boat they're all trying to make their lives better and every penny is being used for surviving and living and paying the bills there's nothing extra so you need a a large range of other people on the board and holly and i are going to talk about that actually in week one when we talk about creating a working board but if you want to remember every one of these podcasts that you've been watching is connected to the whole nonprofit the big picture there isn't like now i have a board we're gonna get money or now i have a strategic plan we're gonna get money it's not like that there are so many pieces that we're going to teach you about in the four-week academy in january on the 7th 14th 21st and 28th that you'll understand how to put the puzzle pieces into place at the right time and to put them in there correctly so that you have a whole picture or view or a glimpse from potential funders and contributors on who you are what you stand for what you want to do how you do it and the cost to do it so the funding stream is going to start out slow and it's going to fill progressively until you are grant ready and we have a whole another session that we're going to plan and carry out on grant readiness but there is a grant readiness demeanor or look that your organization has to possess i love that and i i love like starting off with that investment right and having that diversity i remember when i was looking into the bill and melinda gates foundation and i was like oh and you know what i always like to do and i love to do this on guide stars i also like to find foundations on guidestar and look at their 990s and see who's on their board of directors and where they're giving money et cetera and i was like oh warren buffett's like wouldn't that be a nice person to have on your board like it is important to have like people that are connected and resourceful on your board and i love that you said that like if you're all in that same you know level maybe poverty level even you're on the board you have passion but if you don't have connections to money or understand you know how to do a fundraiser or all of those things it's really hard to get the funding that's needed so having different matrix of people come on your board and to bring those skills and you know maybe they're not you know you have some that are really connected to um bringing in money um and have you know their company behind them just recently one of the nonprofits i was a part of um and you know it was really great because one of the board members she has a she works for a big corporation and she had them really help with a fundraiser a lot of the people she was able to get a lot of people involved those are the types of people you really want to have on your board and that are special right that can bring in different partnerships and leverage different relationships um and that's really important the other thing to consider with that i think too is like for myself i i'm only on like one or maybe two boards a year right like if i'm going to serve like i don't over extend myself because then i'm not then i'm going to go to the one corporation you know the corporations that i know and have relationships with and i just like here who do you want to find this year you know that's not very effective like which non-profit so it is good to you know to really limit that and to know what kind of energy you're going to bring into that and also maybe you say well that person's on five boards so they'll be great on mine they might not be right just because they're connected you still need to look at that and say well are they going to be completely committed to this non-profit right to bring in that funding so i think that's really good but i like that you pointed that out because it is important to have a diversity of people and skills um that can really bring it to your nonprofit so yeah how else do you feel like people um you know the money money money like okay i know we touched on this uh last week but it was also one of those myths as far as oh we're gonna start a non-profit and we're gonna have a million dollars in the first year do you just want to kind of touch on that again cause i think that's just it's just something that's brought up again and again that it's important to like absolutely unless you've got a million dollars to put into your own nonprofit or you happen to run across a board member that is a millionaire that needs a tax write-off which is not likely um then in reality then you really have to look at board members that can connect you with money excuse me so you need to have a template that your board members fill out where do they work where did they work because did you know that if you still have working board members and they work for larger companies in your locale that those companies could have employee matching giving programs where if an employee donates a thousand dollars to your nonprofit they take that contribution receipt back from your 501c3 nonprofit and give it to their employer who routes it to the right division and they match that with a thousand dollar check to your nonprofit that's why it's important not to have a board of all retirees or all work entry-level people who are like 17 or 18 years old that don't have a long track record in the workforce you want to have a variety of ages a variety of professions and think about okay what are the large corporations in our town i'm not talking about government employees or school districts because they don't have the employee matching fund monies these are from companies and i don't want to name any companies on the podcast for fear of violation of using them as a name but let's just say one starts with an x but sounds like a z and with that they earn every down yeah kind of eliminate what that might be [Laughter] they might have a corporate giving program where if an employee gives dollars then they give dollars also so think about that and another good place to look for money is called the combined federated campaign and it's run through united way of america and if you go to their local regional meetings when they have them to learn how to apply online become a part of that when the united way campaign is rolled out to government employees and we're talking about federal state local everybody and they choose who they're going to have dollars taken out of their paycheck weekly or monthly toward their united way pledge with their employer then your organization's name will appear there and if you've been doing branding which we will talk about in our next podcast then they'll know you exist and they can check off right next to your name to donate that twenty five dollars per paycheck or five dollars per paycheck or depending on what level they are in employment maybe a hundred dollars per paycheck and you add that up over the course of one year and that does begin to put dollars on a trickle that come into your organization just from pledges literally so you're going to crawl when it comes to money before you get up and run you're not going to be running until likely the end of year two and another warning that goes back to our board training podcast two people do not constitute a board of directors that's right that's right you gotta have a certain number of people guys no i love that yeah and i love that there's there's uh ways and the more you can look into this ver variety and i know you're going to be talking about that a lot in the nonprofit startup academy as far as you know having diversity of funding is super important so yes we are both grant writers we've both been writing grants we teach other people how to write grants but that is not the only funding stream that we advocate for right so it's important to have a healthy um you know you don't want to put all your eggs in one basket and you know grants are fantastic but they're going to fund certain programs they might not fund the entire nonprofit right so you need to make sure you have a healthy mix so i like what you talked about as far as even creating products right for that seed money um creating services and i i love it when i see non-profits they also have like a thrift store or coffee shop or you know they have counselors that also they charge scales you know fees that are scaled or something so there is some kind of investment that they can offer maybe not directly to their beneficiaries but to the larger community to get some kind of funding is that something you really advocate for as far as those products and services and um maybe what are some other examples that people can use i do and i like nonprofits developing those products and services when they have the resources to do it and the licensing if they're doing like mental health counseling or something like that but another possible idea for nonprofits to come up with startup money is to actually hold monthly fundraisers um i know of a small church and i read about them and they're in the south and every saturday they break out their barbecue grills and the women of the church get into the little commercial kitchen and they make all the side dishes and people come from all around to buy their barbecue plate some families walk out there with eight ten plates of barbecue and they typically will get a lot of the side dishes donated because they make a corporate request to some of the big box stores like the warehouse stores and so they get donations where okay you can have 250 dollars worth of you know packaged uh potato salad or coleslaw or baked beans or you can have 250 worth of sliced bread or bacon serve rolls so they get everything donated and then every person out there working in this event on saturday is a volunteer from the church pastor all the way down to the members of the church and people in the community that just come to help start the fire stoke the fire put on the wood all of that and it doesn't sound like a lot because they're located down some long dirt country road it's not like they're out by a freeway where people drive i can see the smoke and the signage up and they're little signs that's close to the ground you can only see the building but they're raising about a thousand dollars every saturday oh that's so good back into the church and the programs that they carry out in the community that's amazing i mean that's four grand a month you know that adds up that's that's that's good money you know so if you look at a thing how do we raise over 40 000 in a year like it adds up right that's something that's totally and imagine like during the holidays they probably do something a little bit you know raise even more or whatever you know there's um they do something a lot that hear a lot on guam is um a lot of the nonprofits they'll do uh they'll do plates as well but they'll deliver it so they'll do pre-orders and then deliver it to people at work yeah so it's really fun so the whole work you know gets involved with who wants to order the plate and then you don't have to go out for lunch and that you're knowing you're contributing to a non-profit so so many creative ways yeah yeah and i love that just bring it back to your nonprofit though develop your you don't have to do the you know the whole thing that everybody else is doing but at the same time some of those things do work right so figure out what really jives and makes sense for your nonprofit one of the non-profits i was working with i was talking about them in our last um podcast was a conservation non-profit and one of the things they had developed was um a monterey necklace right so that was something that they found was really they could um you know get it developed they had a local artist doing it and so they're also helping them but they were able to um you know make some money that way and that could even be a part of you tying back into your crowdfunder right so another way to develop money like you talked about was crowdfunding and a lot of people they want to be able to crowdfunding is interesting right because you want to donate you want to get individual donors to donate towards your um your cause whatever you're trying to raise money for so that's seed money but in crowdfunding usually there's a return right so it's also a give back in some ways and some ways that for them to do that was if you give over 50 you also get one of these necklaces right so it was something that they could give back um so you can definitely do that as part and sometimes it's not something that's uh tangible maybe maybe it's a thank you card it's an e-card online that costs your non-profit nothing but it's some type of give back so i always say when you're doing a crowd funding think of you know if people give this much you can give them an e-card up to 25 a month maybe if it's oh you know 50 dollars maybe you're gonna give them um snail mail card you know what i mean like about your non-profit so you know and the more they give the more kind of investment you might give back to them in some ways so it's a good way of once again building relationship through a crowdfunder right and building relationship through your individual donors and as we're talk kind of talking about individual donors and we've talked a bit about corporate like you're talking about going to the bigger companies and there's ways for matching as we're getting into end of year here there's a lot of individual donor end of year kind of campaigns going on can you kind of talk about those a little bit yes definitely especially i can give you a personal example i just talked to my accountant this morning and she said you're going to have to contribute five percent of money on hand for your foundation to charities and get back charitable donation receipts because the new irs laws for private operating foundations now require that you give away five percent of your assets annually they can't just be or invested and so i was familiar with two non-profit organizations and it was easy to decide who to give to and i actually gave more than five percent um i gave 10 of you know the foundation monies but if you're not known and people don't know you exist or you haven't been in social media doing a lot of you know talking and joining groups and even belonging your non-profit can join the better business bureau your non-profit can join the state association of non-profits as well where you get your name in a directory and people know about you and across the country here we have a 2-1-1 system where it's a 2-1-1 directory that lists non-profit organizations and all the services they provide and it helps you know who you want to donate to you can read about why they were founded you can look at their website so you want to get into the 2-1-1 directory listing for your state as well those are all ways to make yourself visible and i can't think of the name of the website now but i ran across it the other day and if you profile your non-profit on that website people who want to give can go there and look at the different non-profits that have profiles and decide who they want to give to and click directly through to actually give through their website so that means that you really do need a presence in a website you need to have a click or donate here type of button on it and you just really need to get out there it's every dollar counts this time of year dollars are going to families and children in need and to first-line healthcare providers people who are working with our covet patients there's so much that's going out there to do things for them and non-profits are even changing their goals and instead of giving away let's say a thousand food boxes they are actually now giving away a thousand cases of ppe's or personal protective equipment to nursing homes and assisted living facilities so things will change and you need to know that the givers the funders the priorities don't always stay the same every year so if you are lucky enough to go to a funder and get your first grant it doesn't mean that the same priority will be there next year when you apply they could have completely shifted and now they're only funding charter schools or k-12 public school districts so it's about doing the research in order to create a funding stream to identify it holly and i and other consultants we also do grant funding research for our clients to help identify potential funders that they can then start to reach out and introduce themselves to so they're just so many ways to start the money stream but just saying you're starting a non-profit is not going to bring money in the door you're going to have an empty bucket until you have a presence a plan and your board has perfected making the ask to potential contributors yes i love that so and it is important like you said that diversity like i love you know you need the plan and what does the plan consist of like if it's it's going after so many grants doing the research first right to find out how many grants you're even you know competitive for a good fit um and then also the fundraisers how many fundraisers are you gonna do and that's really gonna depend on what your goals are and what your manpower is what your resources are all of that like the example you gave that was wonderful about the church doing the barbecue plates right well certainly they have a lot of manpower and volunteers to do that but if they didn't they probably wouldn't be doing that once a week right so it's like once again you have to tap into those resources and that goes into your strategic planning how everything's been integrated in this podcast series right so um but then to also look at what other types of funding so we we have our fundraisers is it really close to these federal grants we write every year and is it going to be the same development directors who are doing both of those is that even going to be doable right so it's really looking at sometimes picking out how that's really going to work and i love integrating a crowdfunding campaign um i love integrating the individual donations and individual donors and then corporate solicitations like how is everything connected and are you burning out your partners right are you going to be able to one of the shifts i've seen i don't know if you um do this a lot and i see the pros and cons of it but it's an annual sponsorship that you can bring to corporations right so in that way you're not coming back to them three or four times a year with the different fundraisers asking for money again and you just present it you say these are all the things and then you give them a higher status so you might be asking for more money but you're saying you're going to be an annual sponsor and you know this is what we're going to give you in return you know put your name on the things the logo on the things all of the you know the things that you can do for them and then that way too they can put it into their budget you know and and know that they can divvy it out that way they're going to give to you quarterly then or they're going to give you in one go but they can plan for it do you kind of see more of that annual sponsorship happening yes i just saw a really successful annual sponsorship program fund a lot of revenue for a local nonprofit that had to move from land-based events in three cities here in arizona to doing a statewide virtual event and they depended on their annual sponsors to help support that production and to help bring those dollars in but what happened this year because of covet those sponsors had to say that this year we can't give the 25 000 that we have been giving every year we're going to have to reduce that to 15 000 well no one's going to say oh we can't take this cut you know 15 000 is better than zero yes literally and also just a warning for these new non-profits when you are actually looking at what a potential like community foundation gives grants for and their grant-making range and let's say it's from 5 000 all the way up to 150 000 if you're the new non-profit on the block you don't go in asking for the maximum grant award amount it's the baby steps really tiny baby steps asking for 2500 this year increasing to 5 000 at the next grant cycle maybe going up to 7 500 10 000 and after a few years we finally make it to that top category but guess why we've made it there because we've had good data collections we've actually kept numbers on who we served what zip codes what ethnicity what gender the high service level days how we service them did we service them you know multiple times over several dates throughout a year or did they just come in one time all of that information that you are starting to see populate as a new non-profit when you were serving individuals or animals you need to track because you need that to get money but if you go to someone and they'll say oh an individual donor i'm really wanting to invest in your nonprofit and i have ten thousand it's the end of my tax year and i need this as a write-off can you give me a copy of all of your statistics and data on who you served where they were what kind of service you provided the cost per client for services and also a copy of your annual operating budget for this year as well as a projected budget for next year because i want to see what percent of what i give is going to go to over overhead not direct services actually serving people and if you form your nonprofit only for the purpose of paying yourself and your brother and your sister and your mom and your cousin a check every month it's going to come through in a way over time over the top overhead percentage and that's going to close the door on anyone giving you funding that has to be accountable for where they invest their money absolutely i mean that's that's really good to look at even just having all of those things in place is going to help you on any reports that you do so if it's applying for grants if it's you know putting it on your website to get individual donors if it's you know looking out to your corporate because they're going to ask you too well what's the impact you know and corporations are going to say what's the impact that you have in the community they're going to want to know all those things so they know where their dollars are actually going um so that's very important to make it clear and i love that you're talking about you know um as far as grants grants being a part of that funding right so looking at it starting up small so that's what i always say too as i always like to say funding sources what they need to know to give you money right is can you manage money and can you implement projects right so they want to know what that results going to be and they want to know if you can do it so and a lot of people they ask me that they say but holly is like a catch-22 it's like i can't apply for a grant and get it awarded if i haven't received a grant so how do i even get that first grant to kind of get that momentum going and i say well that's not necessarily true yes it does help once you win more grants you're going to be more competitive and there is going to be momentum going absolutely but what you can do i said once again it goes back to that can you manage money and can you implement projects so even if you're getting donors like if you're getting donations if you're getting in-kind if you have volunteers if you're able to implement projects and manage value then you can also show that to kind of help but once again don't go like i like how you said don't go over the the cap the 150 000 on your first grant right you might start with those smaller community foundation grants maybe that 2500 from that 5k or whatever you know so that's the other thing you can also be able to show that you can manage money by doing the fundraisers right and you can showcase those when you're applying for grants well these are the things that we've done so um that really can help build the momentum of getting grant monies so um definitely those are some great opportunities for where the money is right how to get it so we looked at today so far we've looked at grants we've looked at individual donors we've looked at corporate giving um we've looked at corporate sponsorships crowdfunding um and and doing regular fundraising so these are all and products and services so these are all different ways that you can get funding for your nonprofit so really looking at what's the larger vision how does it make sense how can we schedule it out for a year so we don't burn out everybody doing everything and anything but be very strategic and the different things that we want to accomplish in the year right is there any kind of um can you kind of touch on anything else on that topic as far as the money and maybe being strategic on on because there's so many different ways like what's maybe the best format to kind of start with well in our reality when you look at the revenue pie and where your money's coming from no more no more than 20 percent of your annual revenue should come from grants and when you're preparing next year's operating budget do not plug in the amount of dollars that you received in grants this year you cannot guarantee that those grants will come back to you or that you'll find replacement funders so don't make the mistake of doing that it's better to have grants as a surprise a pop-up revenue than to be out there and i know some nonprofits that are a hundred percent reliance on grants museum yeah the minute a grant doesn't come through hr is meeting with the executive director to see who can be laid off people can be cut back um how can we you know save money on our operating expenses you don't want to create problems by living off of grants you have to have multiple streams of revenue and a part of that money money money goes back to the board the board should be sitting down with you from day one to talk about how you're going to create an endowment fund a fund that's invested with your local community foundation that has a higher interest bearing because it's co-mingled with other dollars that they're also holding in multiple other endowments and you have the interest checks that can come in to your organization you can never touch the principal that's the whole idea the interest is what you get checks or transfers on and you and the board you the founder and the board decide if those interest checks are going to be restricted revenues or general operating revenues to help keep the lights on and pay the bills so the first order is to have the board members that can actually sit on the board and say okay let's have an endowment i can commit five thousand over the first year and then the next one says okay i can commit five thousand and i work for an employer that has matching funds so that's another five thousand so your job executive director founder is to meet with the local community foundation to find out how much money they need in order to open up an endowment fund in the name of your nonprofit because guess what there are foundations out there in your region in your state locally that actually award grants to go deposited into your endowment fund at the community foundation that is a strong statement when they want to match what your board already put in there to help build the endowment fund balance higher to give you a greater return on the interest so there's just so many things out there for you to learn as new nonprofits and you can't just learn those one step at a time or in any one book you honestly need our four-week non-profit startup academy in january the 7th the 14th the 21st and the 28th holly's gonna have a lot of promotion out there on it and you'll have a link but get everything up front and do it right in the beginning so you don't become a statistic of a non-profit who never files a form 990 or a 990 in and then eventually guess what you lose your 501 c 3 tax exempt status right right which that's awful you know so you don't want that to happen after all the work you put into it right so these are great so thank you so much dr beth for touching more on the money money money in this podcast um and i know you guys got a lot out of it and next week we will be coming together to be really talking about the branding right so really looking at messaging and branding um and where your non-profit is so you can really start once again we kind of talked about that a bit today like people need to know who you are to give to you so how do you explain that right there is an art and a form to do that all right so once again thank you so much for co-hosting with me today dr bev and i will have you on the podcast next week thank you so much holly i'm loving this thanks a lot very appreciative so much fun all right i'll see you next week