Nonprofit Kit For Dummies

Dr. Beverly A. Browning is the author of 43 grant-related publications and six editions of Grant Writing For Dummies. She has raised over $750 million in awards for her clients.Stan Hutton is Program Consultant for the Clarence E. Heller Charitable Foundation. Frances N. Phillips teaches grant writing at San Francisco State University.

• Introduction 1About This Book 1Foolish Assumptions 2Icons Used in This Book 3Beyond the Book 3Where to Go from Here 4Part 1: Getting Familiar with the Nonprofit Framework 5Chapter 1: Journeying into the World of Nonprofit Organizations 7What is a Nonprofit Organization? 8Comparing for-profits to nonprofits 9Introducing the coveted 501(c)(3) status for nonprofits 9Knowing Your Mission Before Entering the Nonprofit World 11Setting up a nonprofit 11Making plans and being flexible 12Embracing and Sharing Your Inspiration 13Finding the Resources to Do the Job 14Who is giving to nonprofit organizations? 15Supporting your mission with fundraising 15Chapter 2: Understanding What It Takes to Start a Nonprofit 17Weighing the Pros and Cons of Starting a Nonprofit 18Doing Your Homework First 19Analyzing the competition 20Identifying the right people to help you 20Figuring out how you’ll survive financially 21Acknowledging the reality of what’s ahead 22Planning, plotting, and projecting 23Understanding Nonprofit Ownership 24Benefiting the public for the greater good 24Being accountable and transparent 25Looking at the Many Varieties of Nonprofits 26Identifying nonprofits by their numbers 27Adding rules and regulations to add to your file 28Comparing Nonprofits and For-Profits 31How they’re alike 31How they differ 32Using a Fiscal Sponsor: An Alternative Approach 34Examining common details of a fiscal sponsorship relationship 35Finding a fiscal sponsor 36Chapter 3: Prioritizing Building Your Board of Directors 37Appreciating the Duties of a Nonprofit Board of Directors 38Primary role: Preserving public trust 39Secondary role: Dealing with planning, hiring, and other board tasks 41Sharing responsibilities among the board, staff, and volunteers 42Recruiting the Right People for Your Board 43Incorporating diversity, equity, and inclusion in the board’s composition 44Keeping it fresh: Terms of service 46Big boards or little boards 47Choosing officers and committees 48Introducing new and prospective members to the board and the organization 50Putting Staff Members on Your Board 51Using Your Board to Full Capacity 52Encouraging commitment from board members 52Holding effective board meetings 53Chapter 4: Creating Your Mission Statement and Vision Statement 57Honing Your Mission Statement 58Keeping your mission statement short and sweet 60Stating your mission — the goal for services 60Specifying who will be served by the nonprofit 61Explaining how you’ll accomplish your mission 61Incorporating diversity, equity, and inclusion (DEI) into your mission statement 62Imagining Your Future with a Vision Statement 63Capturing your vision statement 63Asking “Where are we going?” and “Why?” 65Inviting Stakeholders to the Planning Table 66Encouraging and embracing stakeholder input 67Working together to finalize your statements 68Living by Your Mission and Staying Fixed on the Vision 69Chapter 5: Incorporating and Applying for Tax- Exemption Status 71Creating a New Entity: The Nonprofit Corporation 72Following your state’s or territory’s laws 73Understanding the required governing documents 73Deciding whether to have members in your corporation 74Finding the best name 75Writing the Articles of Incorporation 76Crafting a heading 76Article I 76Article II 77Article III 77Article IV 78Article V 78Article VI 78Article VII 78Article VIII 79Signed, sealed, and delivered 79Securing Your Employer Identification Number (EIN) 80Writing Your Organization’s Bylaws 81Holding Your First Board Meeting 82Applying for Tax Exemption 82Tackling Form 1023 online 83Discerning between public charities and private foundations 85Establishing public charity status 85Describing your activities 86Reporting salaries and conflicts of interest 88Dealing with financial information 88Collecting the other materials 89Paying the fee 90Navigating possible contribution barriers until tax-exemption status is approved 90Chapter 6: Adhering to Nonprofit Status Requirements 91Disclosing What You Need to Disclose 92What you do need to show 92What you don’t need to show 93Using the web to satisfy disclosure requirements 94Avoiding Excessive Payments and Politicking 95Determining reasonable pay and benefits 95Using caution when getting involved in politics 96Why all the fuss? Understanding the increased scrutiny by the IRS 97Reporting to the IRS 98Filing Form 990-N 99Taking it easy with the Form 990-EZ return 100Tackling the long Form 990 104Getting your Form 990 to the IRS 106Reporting to Your State, Territory, and Local Governments 107Part 2: Bringing Your A-Game to Nonprofit Management 109Chapter 7: From the Top: Examining the Nonprofit Management Structure 111Managing a Nonprofit: A Bird’s-Eye View 112Appreciating the Governing Board’s Role and Responsibilities 113Understanding the board’s management oversight duties 113Protecting your board from liability 115Redefining the Nonprofit Founder’s Role 116Adding an Advisory Board 117Expanding to Take On an Executive Director 118Chapter 8: Strategic Planning: Embracing the Ongoing Process 121Understanding the Importance of Planning 122Making Your Organization’s Strategic Plan 122Getting ready 123Working with your nonprofit’s mission and vision statements 124Hearing from all your stakeholders 124Surveying the external situation 126Looking at the internal situation 127Calling in the SWOT team 128Putting the plan in writing 132Adjusting your strategic plan when necessary 134Putting Plans into Action 134Defining and setting goals, objectives, strategies, and outcomes 134Creating a work plan 136Planning for Programs 137Working as a team 137Assessing needs 138Brainstorming the resources needed to implement new programs 140Facility Planning: Finding a Place to Do Your Work 142How much space and of what kind? 142Location, location, location 142Owning, leasing, or taking a free ride 143Making a move 145Deciding to take on a capital project 145Chapter 9: Evaluating Your Work: Are You Meeting Your Goals? 147Knowing the Importance of Evaluation 148Working Through the Evaluation Process 149Selecting the right kind of evaluation 149Planning for evaluation 152Crafting valuable questions 153Choosing evaluators: Inside or outside? 154Conducting Your Evaluation 155Analyzing Results and Putting Them to Work 156Interpreting results 156Using your evaluation to strengthen your work 158Telling the truth 158Sharing the evaluation results with your stakeholders 159Chapter 10: You Can Count on Me! Working with Volunteers 161Knowing Why People Volunteer 162Designing a Volunteer Program 163Considering a volunteer coordinator 165Determining your need for volunteers 165Writing volunteer job descriptions 166Organizing volunteers 167Hunting for Volunteers 169Getting the word out 169Looking for volunteers at other organizations 171Finding volunteers with special skills 172Hiring interns 172Interviewing and Screening Volunteers 173Managing Your Volunteers 175Providing adequate training 175Keeping good records 176Insuring your volunteers 176Saying farewell to bad volunteers 177Showing Appreciation for Your Volunteers 177Chapter 11: Working with Paid Staff and Contractors 179Determining Your Staffing Needs 180Getting Your Nonprofit Ready for Paid Employees 181Developing your personnel policies 181Exploring payroll setup options 184Providing benefits and perquisites 184Preparing to Hire 185Composing a job description 185Considering necessary qualifications 186Establishing nonprofit salary levels 187Announcing the position 188Making the Hire 189Looking at résumés 189Interviewing candidates 190Digging deeper with references 192Making your decision 193Onboarding a New Hire 193Confirming employment terms in writing 193Getting your new hire started on the job 194Evaluating your new hire’s progress 195Looking to the future: Creating a professional development plan 195Managing Employees 196Recognizing what a manager or supervisor does 197Clarifying the lines of communication 197Following the reprimand-and-dismissal process 199Working with Independent Contractors 200Differentiating an independent contractor from an employee 201Establishing the roles for independent contractors 202Finding a consultant: Ask around 203Interviewing consultants 204Developing and executing the contract 204Chapter 12: Money Matters: Preparing Budgets and Financial Reports 207Making a Budget = Having a Plan 208Beginning with zero 208Defining a good budget 211Budgeting based on your history 212Understanding and isolating general administrative and fundraising costs 213Accounting for in-kind contributions 213Creating Budgets for Programs or Departments 214Working Frequently with Your Budget 218Projecting Cash Flow 219Constructing your cash flow projection 219Deciding what to do if you don’t have enough 221Borrowing to make ends meet 222Putting money away to make a nonprofit strong 223Keeping Your Books Organized and Up to Date 224Differentiating the various accounting systems 224Considering accounting software or an accountant 225Reviewing the Numbers: Financial Statements and Audits 226Preparing financial statements 226Seeing the value of an audit 227Knowing whether you need an audit 228Reading Your Financial Statements 229Getting to know the parts of a standard financial statement 229Asking the right financial questions 230Managing Financial Systems 232Chapter 13: Marketing and Branding 235Taking Care of the Basics 236Designing a logo and letterhead 236Preparing an organization overview or brochure 237Creating a website 237Producing annual reports and newsletters 239Taking care of your service population — your most important marketing tool 240Discovering Who You Are: First Steps to Marketing 241Recognizing the current market 242Defining whom you want to reach and how 246Reaching Your Audience via Mass Media 250Planning for effective publicity 250Developing a media list 251Understanding how the media works 252Submitting materials to your media contacts 253Getting your event into community event calendars 254Putting together public service announcements (PSAs) 255Using Social Media for Fun and Profit 255Developing a social media policy 256Planning your social media posts 257Choosing your social media platforms 258Protecting your online reputation 260Part 3: Raising Funds Successfully 263Chapter 14: Creating a Fundraising Plan 265Recognizing Who Can Raise Funds 266Naming Possible Funding Sources 267Weighing Your Fundraising Capacity 269Drafting a Fundraising Plan 270Setting a preliminary monetary goal 271Asking whom you and your board members know 272Researching and refining your prospect list 272Plotting fundraising costs 274Moving to an Action Plan 278Planting the Seeds for a New Nonprofit 280Hitting up family and friends before asking others 280Raising funds with special events 281Getting to know community foundations 281Assessing your capabilities to apply for government grants 281Chapter 15: Raising Funds from Individual Donors 283Understanding Why People Give 284Stating Your Case 285Creating an Elevator Speech 288Identifying Possible Donors 289Drawing circles of connections 290Getting a list of potential donors from your board of directors 291Growing a Major Gift 292Deciding who should do the asking 292Preparing to make your request 293Breaking the ice 293Adopting the right attitude 293Timing the request: An inexact science 294Treading lightly when making the ask 294Expressing gratitude for the gift 295Raising Funds by Mail 295Taking the direct-mail route 295Inspiring volunteers to steer a letter-writing campaign 297Raising Money the “E” Way (Easily and Electronically) 299Building and maintaining relationships by using email and related tools 299Building your email address lists 301Using your website as a cultivation tool 302Setting up an online donation portal 303Soliciting text message donations 305Telemarketing: Dialing for Dollars 306Perfecting a script 307Training your board and volunteers as callers 308Collecting the pledges 309Chapter 16: Planning Onsite and Virtual Special Events 311Thinking through the Whole Event 312Using your budget to guide decisions 313Sticking to your budget 316Soliciting in-kind gifts for your event 318Building your event committee 319Setting a date and location 320Setting Up Your Timeline 321The first three months 321Months four and five 322Four weeks before the event 322The week before the event 323Spreading the Word 324Setting social media to blast 324Finding a news angle 325Getting a mention on radio or TV 326After the Event is Over 326Chapter 17: Sleuthing for Grant Funding 329Assessing Your Nonprofit’s Grant-Seeking Readiness 330Planning for a Foundation Grant Proposal 331Learning about funding priorities 332Familiarizing yourself with types of foundations 333Using the Foundation Directory Online to assemble a broad list of prospects 336Digging deeper to narrow your prospects 340Going for a Government Grant 342Federal grants 343Nonfederal government grants 345Chapter 18: Writing an Award-Winning Grant Proposal 347Attending to Pre-Proposal Tasks 348Perfecting the letter of inquiry 348Passing the applicant eligibility screening questionnaire 349The Pitch: Writing a Competitive Grant Proposal 349Starting out with the cover letter and executive summary 350Introducing your organization and its operating history 351Documenting the need for funding 352Setting goals, SMART objectives, and proposed outcomes 353Presenting (ta-da!) your project idea with evidence-based solutions 354Presenting the management plan 356Explaining how results will be measured 356Talking about the budget 357Showing where the rest of the money comes from: The sustainability section 359Appending requested attachments 360Familiarizing Yourself with Other Types of Written Funding Requests 361Trolling for corporate grants or sponsors 361Seeking general operating support 364Asking for capacity building funding 365Seed money: Proposing to form a new nonprofit 366Following Through after Receiving Funding 367Chapter 19: Capital Campaigns: Finding Lasting Resources 369Beginning the Funding Plan 370Preplanning your campaign 371Developing a rough budget 372Testing feasibility 373Analyzing the results of your study 375Developing a Case Statement 376Building the Pyramid of Gifts 376Starting at the top 377Applying for grants as part of your capital campaign 378Ending the quiet phase and moving into the public phase 379Realizing the Benefits and Risks of Capital Campaigns 380Part 4: The Part of Tens 383Chapter 20: Ten Tips for Pivoting in Times of Uncertainty 385Create an Emergency Operations Plan 386Communicate When Making Hard Decisions 386Step Back and Regroup 387Set a Manageable Fundraising Goal 387Collaborate with Others in Your Field 388Share a Back Office 388Place a Program within Another Agency 389Merge with Another Nonprofit 389Close with Dignity If Necessary 390Complete the Government’s Closing Paperwork 391Chapter 21: Ten Tips for Raising Seed Money 393Ask 393Hit Up People You Know 394Tell Your Story and Don’t Ramble 394Show How You’re Improving Lives 395Use Numbers to Convey Urgency and Compassion 395Research, Research, Research 396Know Your Donors’ Point of View 397Build a Donor Pyramid 398Make It Easy to Respond 398Keep Good Records 398Chapter 22: Ten Tips for Protecting Your Nonprofit 401Assessing Your Risks 402Planning for Emergencies 402Filing Annual Federal Forms 404Filing Annual State Forms 404Paying Employment Taxes 405Reporting Payments to Consultants 405Maintaining Transparency 405Responding to Negative Press 406Protecting Your Online Reputation 407Determining Insurance Needs 407Part 5: Appendixes 409Appendix A: Glossary 411Appendix B: About the Online Content 415Index 421