As nonprofit leaders, you’re facing unprecedented times in managing your workforce while also trying to maintain the level of quality in community services you’ve provided before the COVID19 crisis.

Last Friday, the $2 trillion federal stimulus package "CARES Act" passed that could offer direct relief for your organization.

I am writing to provide a summary for you of strategic options to consider as you wade through the health and economic crisis.

Under the CARES Act, unemployment benefits are confirmed upon application AND benefits are upped an additional $600/week (bringing total benefit to $800-$900/wk).

If you think it’s inevitable that you may eventually have to lay off workers soon, it might make more sense to lay off your staff immediately to unlock this program's benefits. Do the math, see if this makes sense for your team members and your operations. This program is here to help you get through this.

The CARES Act also provides up to $10,000 advance for payroll expenditures (this is called an Emergency Economic Injury Disaster Loan, approved within three days of application). If you then plan to “rehire” May 1, you could use this loan to help get you through the month of May. Then by June, it’s likely (fingers crossed) the quarantine will be over and you can fully re-open to meet client needs. This is really more like a grant, it does not need to be repaid.

This route might be able to get you through at least one month of payroll and then some payroll relief for the month of May. Something to talk to your financial advisors about, every organization is unique and requires a unique strategy.


ADDITIONAL CARES ACT BENEFITS FOR NONPROFITS 

• HALF OFF UNEMPLOYMENT INSURANCE: The CARES Act will reimburse you up to 50% for unemployment insurance costs through the end of 2020.

 

• FUNDRAISING INCENTIVE: Lifted the limit from 60% gross adjusted income to 100% for those who itemized donations. This very plainly means, an individual earning $100,000/year can deduct up to $100,000 in 2020. For businesses, the limitations were upped from 10% to 25% of taxable income. (Donor-advised fund gifts are excluded.)

 

• OPERATIONS LOANS AVAILABLE: Nonprofits (up to 500 employees) can borrow 2.5x monthly payroll expenses up to $10 million to cover payroll expenses, rent and utilities, and interest on mortgage and debt obligations. These “Paycheck Protection” loans must be repaid, but annual fees, collateral requirements, and prepayment penalties are waived and the interest rates are capped at 4%. Additionally, this program offers up to 8-weeks of loan forgiveness options, so long as you maintain your payroll. 

 

• FREELANCERS/CONTRACTORS COVERED: The CARES Act also provides benefits for contractual workers and freelancers, so please reach out to them as well to let them know they’re able to apply for a month of unemployment benefits for the first time ever in history.

 

• EMPLOYEE RETENTION CREDITS: If you prove revenue was down 50% or more March 31 through 2020, you may qualify for a $5,000 payroll credit per employee for keeping staff on. This may be a good option for nonprofits that choose to maintain all existing operations and who do not apply for operations loans.

If you haven’t done so already, reach out to your legal and financial counsel as soon as you can to determine what the best options are for your organization. In Indiana, we recommend Kruggel Lawton CPAs (Margene Zink mzink[@]klcpas.com) for accounting information and South Bank Legal for legal matters. Elsewhere, let me know if you’re looking and I will get you a good referral.

I am not a lawyer or a CPA. I am offering ancillary support as a nonprofit administration consultant who wants to see your important organization get through this whole and on your feet.

Feel free to reach out using our contact form if you have specific questions or need assistance during this tough period.

You’re excited. You’re a 501c3, you’ve got a great mission and now you’re ready to get some of those grant dollars you’ve heard so much about! Where do you begin? The good news is – it’s true, there are a lot of opportunities to find funders who want to invest in your cause. The bad news is, you may be a ways off from getting their attention. It’s especially difficult for brand new organizations to receive grant funding without 2-3 years of success under their belts to show they’re worth the investment. Hang tight and arm yourself with our list to get you and your team on the path to grant funding success. This article will give you an insider’s track guide to everything you’ll need to gather and have on-hand to begin applying for grants.
 

1. BALANCE YOUR BUDGET
 
Many major funders admit, the first thing they do when they read a grant application is go straight to the budget.
 
9 times out of 10, a grant application will require a copy of your organization’s annual budget.
 
On the budget, funders are looking to see that you’re fiscally solvent, fiscally responsible, and competent. How does a budget show them these things?

• Fiscal solvency: The first indicator is to look and see if your budget “zeroes out.” The income must equal expenses. If you’ve budgeted for the year and you’re still in the hole – then why would someone want to invest in you? They still may but you better have a real good compelling case for why it doesn’t and a great relationship with that funder. Most grantors will just write you off.

 

• Fiscal responsibility: The next thing funders will look at is where you’re putting your money. If they see you’re spending 75% of your budget on rent, they may wonder why you have just an expensive building. If they see your CEO is making triple what other leaders make, they may wonder about ethics. If they see you get 90% of your funding from a single source, that may worry them about sustainability. Your expenses and revenue need to be

 

• Competence: If you slapped your budget together on a sheet of line paper in a hurry then converted it into a PDF for the grant app, you’re not going to look very professional. Similarly, if you submit a budget with some random numbers on a page a no order, you won’t be taken seriously. If you can’t figure it out, then invest in some help to get your budget setup right. You should have a list of revenue buckets and amounts at the top and expense buckets at the bottom, the numbers need to match. A budget is your plan for success.

 


2. COVER YOUR BASES  

99.9999% of grant funders will require that you are 501c3 tax exempt organization. Here’s a list of the all the items the vast majority of grants require.

• 501c3 Tax Exemption w/ IRS Letter
• Mission Statement
• Organization Annual Budget
• Project or Program Level Budget(s)
• Most Recent 990
• Board Member Listing w/ Company Affiliations

 
Many grant funders will also ask for a deeper dive of information that includes:

• Year-to-Date Financials
• Strategic Plan
• Articles of Incorporation
• Recent Audit
• Resumes of Key Staff Members
• Annual Report
• Brochures or Newsletters
• Conflict of Interest Policy
• Diversity and Inclusion Policy
• Board Member Insurance Policy
• Board Member Giving Profiles (100% Giving)
• Staff and Board Member Race/Sex Profiles
• List of Formal Partnerships

 

3. KNOCK 'EM DEAD

Alright, you’ve covered all your bases and now you’re ready to actually fill out the application. What kind of information will you need to fill out the application?
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The vast majority of grant application and letters of inquiry will ask for these four elements for the program or project you’re requesting funding for:

• History
• Narrative
• Goals or Objectives
• Outcomes
• Client or Audience Demographics
• How you’ll sustain the program funding
• How you’ll publicize the program or their support

 
Many times, you’ll also be asked to include one or more (or all!) of the following:

• Logic-model or Theory of Change
• Key Accomplishments in Last 5 Years
• Detailed Program Timeline
• Geography and Other Census Data
• Staffing Plan

 

4. GET IT RIGHT
 
Finally, there are a number of random little red flags that may pop up around your application. Because grants are hugely competitive to win, a red flag might throw your whole application off. If you can get yourself grant-ready starting NOW, you won’t have to worry about that when you’re all set to apply.

• Does your Board of Directors “match” the population you’re serving? For example, if you’re a Latino Community Center, you’ll want to show that Latinos are represented as leaders of the organization.
• Do you have an audited financial statement to submit? If not, they may wonder if you’re hiding it or think that your organization is too green.
• Ultimately, you need to show that you need them. This is tough because you have a fine line of proving that you’re worthy of their investment and will deliver results based on your history, but you also need them to see your work can only continue with the support of generous donors. 

What happens when your nonprofit is engulfed in scandal? Or what if you have a board member or highly visible donor who’s reputation is significantly on the rocks? As always, being prepared for crisis and scandal is always the best policy. Every nonprofit leader should know when and how to act in times of trouble. Managing these crises is especially important when it comes to fundraising and mission advancement.

Fundraising is all about managing relationships. In times of controversy or not, nonprofit executives should be carefully navigating through their relationships with stakeholders. When there is a crisis, the trust they’ve built along the way will have the biggest impact on successfully wading through the times of murky waters. In general, it is good to have open, honest communication with all of your stakeholders so a crisis doesn’t tip you over the edge but makes everyone come out stronger.

If news breaks that a major donor was engulfed in scandal, a nonprofit executive should remain calm and act swiftly with integrity.  A solution and plan of action to mitigate the crisis should be immediately ready to go. This includes knowing who to pull into a room for immediate strategy, who to contact first, and who are the best people to carry out the plan. Communicating clearly, concisely is paramount.
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Your main strategy will need to be disassociating your mission with the person experiencing the scandal. Your core group of loyal stakeholders should continue to feel that you are an organization they can trust.  Continue to align their passions and initial interest in the work of your organization with the impact and mission you make in the world. The scandal could, in effect, give you an opportunity to engage your stakeholders in a closer, meaningful way that ignites even more respect and loyalty than before.