Tip: Don’t add ongoing expenses to one-time funds

Thank you, Captain Obvious. This might sound like common sense advice but you would be surprised how often organizations receive a large sum of one-time funding and load it up with expenses that will outlive the money. Full-time personnel, cell phones and equipment requiring ongoing maintenance are just a few examples of expenses that can put your budget in a pinch once the funding runs out.

One-time funds are better suited for staff professional development, hosting a conference/workshop/symposium, preparing communications materials, working on policy papers, replacing program supplies and replacing obsolete technology. There will always be a temptation to hire that full-time position you need and to worry about the funding down the road; that doesn’t always work out. If the position is truly critical, find a stable source of funding at the outset.

Need help with your budgets? Reach out to us. We’re ready to assist.

Commentary: Big Bird has the upper hand on Trump

The White House released the President’s 2018 budget in March and, predictably, it proposes to eliminate funding for the Corporation for Public Broadcasting (CPB). Headlines such as “Big Bird on the Chopping Block” and “The End of Big Bird?” dominated media outlets. Could Sesame Street disappear if the CPB loses federal funding? Supporters claim any cuts will harm children through the loss of educational programming. Opponents point to the nation’s $20 trillion dollar debt and say cuts need to be made everywhere (and, in some circles, because Big Bird is a commie propaganda tool). They’re both wrong. Let’s dig into the numbers.

Sesame Workshop, the nonprofit corporation that owns Sesame Street, solved the age-old problem of sustainability. From its modest beginnings in the late-1960s—through grants from the U.S. Department of Education and the Ford and Carnegie foundations—Sesame Street has grown into a global brand with annual revenues exceeding $100 million according to the company’s audited financial reports.[1] Recent IRS tax filings show that federal grants account for no more than four percent of revenues.[2]

IRS filings also reveal generous compensation packages earned by its top executives. In 2014, Sesame Workshop’s former CEO earned more than $586,000, in salary and benefits, for the nine months leading up to his retirement (the previous year, he earned $672,000). Ten other key employees earned an average $382,000 in annual compensation. Sesame Workshop’s lead writer pulled down an impressive $597,000 salary in 2014.2,[3]

Sesame Workshop clearly does not need government grants to stay afloat. In fact, the money it currently receives isn’t used to produce domestic Sesame Street episodes (more on this later). Any financial issues Sesame Workshop has in the future won’t be due to federal funding cuts.

Continue reading “Commentary: Big Bird has the upper hand on Trump”

Diversify your funding

Reliance on a single funding source can spell disaster for nonprofit organizations. A recent New York Times article perfectly illustrates this point. Popular programs one year can be cast aside the next. Politicians are fickle people; they want to fund their own pet projects, not the previous office holder’s projects.

We recommend nonprofits limit their federal funding to no more than one-third of revenues. Any more than one-third exposes organizations to unnecessary risk. If your organization is too reliant upon a single funding source, contact us and let us help you diversify.

New grant seekers: Ditch the templates

We occasionally receive requests from organizations seeking a template grant proposal they can use when approaching funders. That’s not how grants work—at all. Funders can spot templates from a mile away. They’re ineffective and they diminish an organization’s credibility.

Every funder has different application requirements based on their mission (or the authorizing legislation in the case of state and federal monies). You need to tailor each application to the funders’ needs. You want the funder to see that you invested the time to develop a program that will advance their goals. Grants are partnerships. If you’re replicating a single proposal over-and-over again, you’re telling the grant-making community your organization is more interested in dollars than partnership.

The best way to create a successful grant proposal is by writing many grant proposals. The first one is naturally the most difficult because you’re starting with a blank sheet of paper. The second proposal is a little easier because you can pull some language from the first proposal to enhance your next effort. The third proposal builds upon the work from your first two: you shore up the weak spots and you can recycle text that was especially compelling. Wash, rinse, repeat.

The more proposals you prepare, the more comfortable you become with the process and the more narrative language you have to use from earlier proposals. Every proposal is a little better than the previous one. Just keep after it. Success will come in time.

Need help getting started? Contact us!

Quick tip: financial controls

Don’t allow just one person in your organization to have sole control of your financial records, bank accounts and credit accounts. Always have checks and balances over your finances. The person preparing checks should not be the one to sign them. The person signing the checks should not be the one to record the information in the accounting system. Misspending, embezzlement and fraud can occur when only a single individual is in charge of financial records. In smaller organizations, it might not be possible to have three staff people controlling expense authorizations; in that case, board members need to step in and fill the oversight gaps. Trust but verify. At least once every year, perform your own internal audit by spot-checking a handful (or more) of random expenses to see if proper procedures were followed. Everyone in the organization has a duty to safeguard funds.

If you need help reviewing or establishing your internal controls, please visit our site and contact us.

Accepting new clients

The Grant Doctors is always looking for new client-partners. If your organization needs help applying for or managing federal grants, let us compete for your business. We have an extensive catalog of services to accommodate all needs and all budgets. We accept engagements of any duration: one hour (for technical assistance, document review, etc.); one project (applying for a grant, creating a sustainability plan, developing an indirect cost rate, fixing a grant management issue, staff training/coaching, etc.); one year (for ongoing assistance); or anything in-between. Visit our website to see all our services, then call or Email us for a price quote. We look forward to partnering with you!