Weather Report on Competitive Grant Funding
The Estes Nonprofit Network has created a "weather report" video looking into the competitive grant funding landscape in the Estes Valley. We look into seven funders from 2023 to answer two questions:
Q1: How are the competitive grants awarded in Estes funded? Does Estes fund itself?
Q2: There are 70+ nonprofits in 80517…can they all apply?

​Leave us your questions or comments via email, on FB, or IG. 

News You Can Use 
Feature stories on the nonprofit industry with a focus on donor education

​Donor-Organization Dating Game
By Karen McPherson, Estes Nonprofit Network Outreach Director
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We often assume the best and rely on personal relationships or emotions to make donations. In fact, the number one reason people donate is because they are asked. And the person asking makes a big difference in whether a donor gives and how much. Donors and nonprofit organizations are essentially in the dating game. It’s easy to get excited about your match, but it’s reasonable (and advised) to do a little digging before you commit. The warm fuzzy feeling or alignment with a mission is easier than understanding an organization’s governance or fiscal accountability. They are all important.

​ A donor checklist, or, at the very least, a few quick seek-and-finds, ensures the organization you think is the right fit is, in fact, the right fit before pushing the “I trust you; here’s my money” button. 

Donors and organizations have a responsibility—to themselves and their partners—to be honest and transparent. Maybe I want to donate $20 but not talk again. But maybe I want to test the $20 water and see if we can do more together. A $20 kiss can lead to a $2M marriage or Legacy Gift. It’s important for both parties to build a trusting relationship if it’s going to endure.
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When donors decide they want to support a mission, they can look on the Estes Nonprofit Network’s List of Nonprofits that serve the Estes Valley, search by keyword on COGives.org for state-wide organizations, or research further afield for national or international organizations. When a donor finds an organization that piques their interest, they should be able to easily find basic information on a website: mission statement, contact information, and donor information. Essentially answering the questions of “What do they do, how do I pay online, or who do I write the check to and where do I send my money?” Also, donors have the right to privacy. Check for a statement about how—or if—personal information will be shared.

So, donor, you like the looks of an organization, but do they have their ducks in a row?
Organizations that are committed to their fiduciary responsibilities often get outside verification. They will post on their website if they are a BBB Accredited Charity or earn “seals” on Candid. The BBB requires a rigorous 20 standards of accreditation. Candid’s higher-level seals are awarded after sharing audited financial statements and strategic plans. Charity Navigator and CharityWatch are other examples of organizations that rate nonprofit effectiveness. 

​ Candid has clear advice for nonprofits, “Donors and funders have questions—don’t make them ask, tell them.” First and foremost, best practices say that organizations should post their last two to three years of tax filings online. Individuals' federal tax returns are private, but a charitable organization’s tax return (form 990) is public; it also includes salary information. ​

Donors, if the organization has not posted tax returns online, sleuth around a little.
The tax-exempt organization search tool on the IRS.gov’s charities and nonprofit section shows 990s, any information on loss of status, and an IRS determination letter proving 501c3 status. Organizations may also provide an impact report (formerly and commonly called an annual report): digestible financial reports, simple data summaries, and storytelling of their mission-based impact. They may post self-assessments by their peers, staff, or board. These reports are all created by the organization, whereas taxes and “in good standing” documents are legal oversight measures. Both are valuable. 

Some nonprofits in the Estes Valley have bare-boned websites. They are small groups of people doing great work. They need donations, but may not have the internet chops to share their details online. Call them. Don’t be afraid to ask questions before you “buy in” to an organization. It’s not intrusive; it’s not prying. It’s like asking a future partner if they want to have kids. It’s completely reasonable to ask any organization what your money will be used for. You might want to give more next time if you feel your money made a real difference. Whether it’s $20 or $200, an organization should be able to share an impact report they publish regardless of your personal inquiry. And organizations, this inquiry is an opportunity to dig deeper and possibly discover a program or pursuit that lights this donor up and invites a deeper partnership.

On the other hand, let’s get a temperature check. Donors: ask what you want, visit the office, and meet the staff. But don’t distract the organization from the work you theoretically want to support. At some point, the organization has to weigh the time it takes to date a donor (or funder) vs executing the mission. Organizations: in some situations, it is ideal to have an advocate or board member dedicated to donor development and inquiry.

Sure, it can be awkward to get to know one another. But a solid relationship between organization and funder can help smooth over bumps that come up (and they always do). It allows the donor to feel genuinely invested in the mission. It allows a director to be able to call a donor in confidence and ask for their support to launch a new program. In the end, these relationships can build a mountain of GOOD WORK.  

If donors or organizations have any questions about how to engage or what to expect in the wild world of “development,” please contact [email protected]. Don’t be shy!

The Donors Dilemma: Impact AND/or Infrastructure
By Karen McPherson, Estes Park Nonprofit Resource Center

End-of-year donations, required minimum distributions, and “‘tis the season to give” are just around the corner. Options to make a financial contribution are coming to a mailbox near you. This time of year reminds us what issues are relevant to us, what missions we feel passionate about, and what problems we want to help solve. 
There is an ongoing conversation in the world of nonprofits about restricted and unrestricted donations. Restricted donations come with a caveat that the donor will only allow the nonprofit to spend their money on a specific program or within a specific fund. By contrast, unrestricted funds may be used for any legal purpose appropriate to the organization. 
The question of whether to restrict donations or not comes down to, “Do we value only the impact or the people who create the impact?” As a donor, you choose what impact is important to you, but institutions and donors are beginning to understand that you need the people to make the impact possible. 
In an open letter to donors, CEOs of three leading charity evaluators ask those making charitable contributions to consider the whole picture, “People and communities served by charities don’t need low overhead, they need high performance.”
They argue that many charities should spend more on overhead. “Overhead costs include important investments charities make to improve their work: investments in training, planning, evaluation, and internal systems—as well as their efforts to raise money so they can operate their programs. These expenses allow a charity to sustain itself (the way a family has to pay the electric bill) or to improve itself (the way a family might invest in college tuition).”
Strong organizational infrastructure avoids what is known as “The Nonprofit Starvation Cycle.” This idea comes from a foundational article in the Standford Social Innovation Review written in 2009. Almost 15 years later, it is still a resource for educating both nonprofits and donors about how they might reframe from the idea that restricting donations to programming alone makes the program more impactful. 
The environment of restricted funds, as reported by Carter Consulting, is one where “funders have unrealistic expectations, nonprofits feel pressure to conform, and nonprofits neglect infrastructure and misrepresent data.”
Typical consequences of “program-only donations are limited or no staff,  and limited ability to manage or monitor finances and programs. Limited IT and training results in increased hours spent on software that doesn’t integrate well, crashes, or…it takes longer to manually manipulate the data than it does to get useful information. Low staff wages or lack of investment in staff results in high turnover and more costs to hire new people and get them up to speed. There is a joke in the nonprofit sector about constantly doing ‘other duties as assigned.” The accidental techie. The staff who doesn’t like numbers but plays a bookkeeper at the office. A lack of appropriate resources is inefficient.    
To deal with the inadequate funding for administration, organizations resort to the strategies of make-do, and do without that diminishes organizational effectiveness. Even if you are an all-volunteer organization, at the very least, someone has to have a computer and internet access to do the bookkeeping and file taxes. Every nonprofit has overhead expenses.
“Programming only” is a challenging trend present in grants as well; in the last 20 years, funders have generally expected a proposal with no more than 15% of the award going to operating costs. This is important! Many nonprofits show at least 1/3 of their income coming from grants. Some argue that granting organizations should know better than anyone that it takes people and not just dollars to make things happen. 
The Ford Foundation awards over 1 billion dollars in grants each year. They recognize the destruction of the Nonprofit Starvation Cycle and announced,  “Effective January 1, 2023, the Ford Foundation will raise its minimum indirect cost (IDC) rate applicable to eligible project grants from 20% to 25% —or to an even higher rate, under certain circumstances. This increase will allow us to fully cover indirect costs on the vast majority of our project grants and ensure that our grantees have the flexibility and support to cover the true cost of their work.”
Let us share a real-life example of the Nonprofit Starvation Cycle: EPNRC applied for a grant to put on a six-part Board Training series. The total budget was $3k: presenter fee of $2400, marketing $360, and supplies $240. Notice there is not even staff time included in this budget. We were awarded $1650. We then had to raise another $850 just to pay the presenter. 
Yes, you may dictate that $100 of your donation goes to programs. The reality is that it takes roughly $40 to pay for the program, $40 for the staff time, and $20 for other overhead. Please consider unrestricted donations. 
Let us all continue to go forth and amplify goodwill. Align yourselves with missions that match your passion. Find the nonprofits you trust to handle your gift responsibly and give willingly.   
Comments and questions related to this article and nonprofit management may be sent to [email protected]

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