Monday, October 20, 2008

Fundraising in Tough Times

“This is pre-eminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great nation will endure as it has endured, will revive and will prosper.

So first of all let me assert my firm belief that the only thing we have to fear. . .is fear itself. . . nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

Franklin Delano Roosevelt, 1933

Fundraising in Tough Times

When the economy gets tough, people get scared – plain and simple. Google “Fundraising in a recession” and you’ll get 670,000 results.

Advice varies, depending on who is doing the giving. While many nonprofit pundits believe that the best strategy is no strategy – that is, to stay the course of the fundraising basics you’ve been weaned on – others believe you should adapt to the realities of a changing economy, and as quickly as possible.

Frederick S. Lane writes, in the Chronicle of Philanthropy, that nonprofits should keep costs down by cutting payroll, sometimes trimming programming, putting together collaborative efforts with other nonprofits, and making general spending cuts.

Is it possible to “stay the course,” survive, even prosper without making cutting either your programming or your staffing?

It is if you learn to work smarter – not harder.

Begin by strengthening your case for support. Does yours read like a mission statement? You need a strong compelling story, preferably real, rather than a composite, with pictures. A story that tugs at the heartstrings and opens wallets. A story that could only be told by your organization.

Annual Appeal? If you’ve got donors who are giving you $1,000, $100, even $25 every year, they’re prime candidates for a monthly giving program. Implement one now. And what rule says you can only mail once a year? Why not twice or even three times a year?
By the way, are you keeping your donors informed? Because if the only time that they hear from you is when you want money …

Understand that foundation giving may be declining. On the other hand, it may not. Is your organization making it a practice to routinely scope out new sources of foundation funding? Develop a system where you’re sending out proposals to new foundations on a weekly basis.

Never ever cut back on development staff during tough times. Do your level best to keep good development staff on board. Know that continuing education is a great motivator and spend a little extra on development workshops and membership organizations. It’ll pay off.

Wednesday, October 15, 2008

Check out my latest tutorial on foundation prospect research.

If you work for a smaller nonprofit organization without the budget to subscribe to foundation prospect search services such as The Foundation Center's Foundation Directory Online or Metasoft's Foundation Finder, this tutorial is for you.

Using just an internet connection, you'll be able to regularly research and seek out new foundation sources of funding on a regular basis.

Let me know what you think!

Tuesday, October 14, 2008

A little something to remember as we head into this election ...

I would like to share with all of you a powerful article that appeared today on Consortium News. With McCain lagging in the polls, there is no telling what McNasty will pull to win this election.

by Robert Perry
As the American people pick through the wreckage left by the Bush administration, many may wonder how the most powerful nation on earth got so far off track. An illustrative case study is the bogus story of Al Gore’s “Chinagate” scandal.

The story doesn’t explain all that’s gone wrong in the past eight years, but it reveals how aggressive right-wing operatives, aided and abetted by a lazy or complicit news media, can create an impression for millions of voters that is nearly the opposite of the truth.

So, in the razor-thin presidential election of 2000 – at the dawn of the George W. Bush era – a significant number of Americans went to the polls believing a right-wing canard, that Al Gore was implicated in a treacherous scheme to trade American nuclear secrets to China for campaign cash.

The smear had been pushed by a combination of Republicans and right-wing activists relying on the Internet, talk radio, direct mail, Fox News and TV ads. Meanwhile, the mainstream news media did little to dispel the ugly suspicions, even though exculpatory evidence existed that would have cleared Gore.

A bitter irony of the story was that Americans, who voted against Gore to stop a “traitor” whom they thought had bargained away life-and-death nuclear secrets to China, were letting back in Republicans upon whose watch the nuclear secrets apparently were leaked.

Up had become down. The votes of those misguided Americans then helped make Election 2000 close enough for Bush and the Republicans to steal the White House. [For details on that election, see our book Neck Deep.]

Daisy Ad

The “Chinagate” story surfaced dramatically in the weeks before Election 2000 when a pro-Republican group from Texas, called Aretino Industries, ran an emotional ad modeled after Lyndon Johnson’s infamous 1964 commercial that showed a girl picking a daisy before the screen dissolved into a nuclear blast.

The ad remake accused the Clinton-Gore administration of selling vital nuclear secrets to communist China for campaign donations in 1996. The compromised nuclear secrets, the ad said, gave China “the ability to threaten our homes with long-range nuclear warheads.”

The ad – airing in “swing” states including Ohio, Michigan, Missouri and Pennsylvania – suggested that a Chinese government front funneled $30,000 in illegal “soft money” donations to the Democrats in 1996 in exchange for the nuclear secrets. The most important secret had been the blueprint for the W-88 miniaturized nuclear warhead.

The allegation hit a nerve with many voters because the Bush campaign had run other ads showing grainy photos of Al Gore with saffron-robed monks at a Buddhist temple in California, implying corruption with mysterious Asians.

The daisy ad also played off an earlier report by a Republican-controlled congressional investigation into China’s apparent theft of the W-88 warhead design and other U.S. nuclear secrets. The so-called Cox report, named for the probe’s chairman Rep. Christopher Cox, accused the Clinton-Gore administration of failing to protect top-secret nuclear data from Chinese espionage.

When released on May 25, 1999, the Cox report was greeted by conservative groups and much of the national news media as another indictment of the Democrats in the aftermath of President Bill Clinton’s Monica Lewinsky sex scandal. By then the press corps, addicted to “Clinton scandals,” paid little attention to the sleight of hand in the Cox report.

Cox’s key trick was to leave out dates of alleged Chinese spying in the 1980s and thus obscure the fact that the floodgates of U.S. nuclear secrets to China – including how to build the miniaturized W-88 nuclear warhead – had opened wide during the Reagan-Bush years.

While leaving out Republican time elements, Cox shoved references to the alleged security lapses into the presidencies of Jimmy Carter and Bill Clinton.

For instance, the Cox report’s “Overview” stated that “the PRC (People’s Republic of China) thefts from our National Laboratories began at least as early as the late 1970s, and significant secrets are known to have been stolen as recently as the mid-1990s.”

In this way, Cox started with the Carter presidency, jumped over the 12 years of Ronald Reagan and George H.W. Bush, and landed in the Clinton years. In the “Overview” alone, there were three dozen references to dates from the Clinton years and only five mentions of dates from the Reagan-Bush years, with none related to alleged wrongdoing.

Cox’s stacking of the deck carried over into the report’s two-page chronology of the Chinese spy scandal. On pages 74-75, the Cox report put all the information boxes about Chinese espionage suspicions into the Carter and Clinton years.

Nothing sinister is attributed specifically to the Reagan-Bush era, other than a 1988 test of a neutron bomb built from secrets that the report says were believed stolen in the “late 1970s,” the Carter years. Only a careful reading of the text inside the chronology’s boxes made clear that many of the worst national security breaches could be traced to the Reagan-Bush era.

But the major U.S. news media did little to challenge Cox’s misleading findings, even though some newspapers knew then or learned later that the evidence pointed to a hemorrhage of nuclear secrets during the 1980s.

For instance, the Washington Post reported on Oct. 19, 2000, just weeks before the election, that when federal investigators translated previously ignored documents turned over by a Chinese defector in 1995, they learned that the exposure of nuclear secrets in the Reagan-Bush years was worse than previously thought.

“The documents provided by the defector show that during the 1980s, Beijing had gathered a large amount of classified information about U.S. ballistic missiles and reentry vehicles,” the Post reported. But the newspaper didn't dispute Cox’s earlier findings or debunk the treasonous “Chinagate” allegations then being spread about Gore.

[Cox is now chairman of the Securities and Exchange Commission, where he has come under criticism for failing to adequately regulate Wall Street banks. One of his aides on the Cox report was I. Lewis Libby, who became Vice President Dick Cheney’s chief of staff and was later convicted of perjury and obstruction of justice in the “Plamegate” affair.]

Iran-Contra Connection

Other evidence, also available before Election 2000, suggested that conscious decisions by senior Reagan-Bush officials in the 1980s may have put communist China in a position to glean those sensitive secrets.

The rupture of U.S. nuclear secrets followed an extraordinary decision by Ronald Reagan’s White House in 1984 to collaborate with Beijing on a highly sensitive intelligence operation, the clandestine shipment of weapons to the Nicaraguan contra rebels, in defiance of U.S. law.

The collaboration was especially risky because Congress had forbidden military shipments to the contras and the administration was insisting that it was abiding by the law. In reality, President Ronald Reagan had tapped a National Security Council staffer, Oliver North, to oversee an off-the-books contra supply operation.

Reagan’s White House turned to China hoping that it would deliver surface-to-air missiles that might turn the tide of the battle against Nicaragua’s leftist Sandinista government, which had been inflicting heavy losses on the contras by using Soviet-built attack helicopters.

In his 1989 Iran-Contra trial, North described this procurement of China's SA-7 anti-aircraft missiles as a “very sensitive delivery.”

For the Chinese missile deal in 1984, North said he received help from the CIA in arranging false end-user certificates from the right-wing government of Guatemala. But China balked at selling missiles to the Guatemalan military, which was engaged in a scorched-earth war against its own leftist guerrillas.

To resolve this problem, North was dispatched to a clandestine meeting with a Chinese military official.

The idea was to bring the Chinese in on what was then one of the most sensitive secrets of the U.S. government – the missiles were not going to Guatemala, but rather into a clandestine pipeline arranged by the White House to funnel military supplies to the contras.

“In Washington, I met with a Chinese military officer assigned to their embassy to encourage their cooperation,” North wrote in his autobiography, Under Fire. “We enjoyed a fine lunch at the exclusive Cosmos Club in downtown Washington.”

North said the Chinese saw the collaboration as a way to develop “better relations with the United States.”

Possession of this sensitive information also put Beijing in position to leverage future U.S. actions by the Reagan administration. It was in this climate of cooperation that secrets, including how to make miniaturized hydrogen bombs, allegedly went from the United States to China.

The Wen Ho Lee Case

While the details of how China learned the W-88 secrets are still unclear, it is clear that the Reagan administration authorized a broader exchange program between U.S. and Chinese nuclear physicists. The Chinese were even given access to the Los Alamos nuclear facility.

By 1985, the Reagan administration’s expanded nuclear exchanges with China were in full swing. In March 1985, Los Alamos nuclear physicist Wen Ho Lee (who would later come under suspicion of espionage) was seen talking with Chinese scientists during a scientific conference in Hilton Head, South Carolina, according to a New York Times chronology that was not published until after Election 2000 (on Feb. 4-5, 2001).

In 1986, with approval of the Los Alamos nuclear lab, Wen Ho Lee and another scientist attended a conference in Beijing. Wen Ho Lee traveled to Beijing again in 1988.

“With the Reagan administration eager to isolate the Soviet Union, hundreds of scientists traveled between the United States and China, and the cooperation expanded to the development of torpedoes, artillery shells and jet fighters,” the Times wrote. “The exchanges were spying opportunities as well.”

The fruits of any Chinese espionage during Ronald Reagan’s presidency became apparent during the presidency of George H.W. Bush.

“On Sept. 25, 1992, a nuclear blast shook China’s western desert,” the Times wrote. “From spies and electronic surveillance, American intelligence officials determined that the test was a breakthrough in China’s long quest to match American technology for smaller, more sophisticated hydrogen bombs.”

Assessing this Chinese breakthrough, U.S. intelligence experts began to suspect that the Chinese had purloined U.S. secrets.

“It’s like they were driving a Model T and went around the corner and suddenly had a Corvette,” said Robert M. Hanson, a Los Alamos intelligence analyst.

By the early years of the Clinton administration, investigators had begun looking back at the mid-1980s when the Reagan administration had authorized U.S. nuclear scientists to hold a number of meetings with their Chinese counterparts.

Though the American scientists were under restrictions about what information could be shared, it was never fully explained why those meetings were held in the first place – given the risk that a U.S. scientist might willfully or accidentally divulge nuclear secrets.

A breakthrough in the probe didn’t occur until 1995 when a Chinese walk-in to the U.S. Embassy in Taiwan provided documents indicating that China apparently had gained access to American nuclear designs back in the 1980s.


It took four more years – until March 1999 – for the Chinese nuclear story to gain national attention, when the New York Times published several imprecise front-page stories fingering Wen Ho Lee as an espionage suspect.

During those chaotic first weeks of “Chinagate,” Republicans and political pundits mixed together the suspicions of Chinese spying and allegations about illegal Chinese campaign donations to the Democrats in 1996. Clinton’s Justice Department overcompensated by demonstrating how tough it could be on suspect Wen Ho Lee.

Amid the spy frenzy, however, no one took note of the logical impossibility of Democrats selling secrets to China in 1996 that China seemed to have obtained a decade or so earlier during a Republican administration.

Instead, pro-Republican groups grasped the political and fund-raising potential, especially since President Clinton had just survived his impeachment ordeal and there was a strong appetite for more “Clinton scandals.” Plus, Clinton’s sidekick, Al Gore, was the frontrunner to succeed his boss.

Larry Klayman’s right-wing Judicial Watch sent out a letter seeking $5.2 million for a special “Chinagate Task Force” that would “hold Bill Clinton, Al Gore and the Democratic Party Leadership fully accountable for election fraud, bribery and possibly treason in connection with the ‘Chinagate’ scandal.”

The hysteria had especially ugly consequences for Wen Ho Lee, the 60-year-old physicist who was imprisoned on a 59-count indictment for mishandling classified material.

The Taiwanese-born naturalized U.S. citizen was put in solitary confinement with his cell light on at all times. He was allowed out of his cell only one hour a day, when he shuffled around a prison courtyard in leg shackles.

However, the tenuous case against Wen Ho Lee began to collapse in 2000 against the backdrop of the presidential campaign. On Sept. 13, 2000, the scientist pled guilty to a single count of mishandling classified material, and U.S. District Judge James A. Parker apologized to Lee for the “demeaning, unnecessarily punitive conditions” under which Lee had been held.

Still, the suspicions about Clinton-Gore treachery with China lingered and reemerged during the final days of Campaign 2000 with the “daisy ad” remake. The closing message was blunt: “Don’t take a chance,” the ad said. “Please vote Republican.”

George W. Bush’s campaign also exploited the “Chinagate” suspicions, albeit a touch more subtly, by running those ads showing Gore meeting with the saffron-robed monks at a Buddhist temple in California.

So, millions of Americans went to the polls in November 2000 thinking that Gore’s temple appearance and the Chinese nuclear spying were somehow linked. The mainstream news media – still bristling with hostility toward Clinton and Gore – offered no timely explanation that the Chinese espionage represented a Reagan-Bush scandal, not a Clinton-Gore scandal.

Through disinformation from the Right and acquiescence from the mainstream media, the stage was set for a historically close presidential election and for the Republicans to be returned to the White House.

The rest, as they say, is history.

Monday, September 1, 2008

Details, Details, Details …Developing Standards, Protocols, Procedures for a Strong Development Department

Can you imagine a more tedious topic?

Developing comprehensive policies and procedures for a development department would hardly seem a subject loaded with the fun factor of, say, the latest direct mail tactics, or the newest strategies for online giving, or attending a workshop geared towards putting more “oomph” in your grant proposals.

Yet the policies and procedures that a good development department sets forth, particularly early on, can bring the organization untold dividends far into the future.

And ignoring the importance of standards will create havoc down the road.

Imagine receiving a donation from a contributor who notes that she would like her check to be allocated to a specific program – and having no record of the program?

Imagine having found that “perfect fit” foundation, spending three days crafting your organization’s first proposal, sending it off … and later finding that the foundation HAD funded your organization three years ago, kept no record, and failed to follow through with a final report? (Did I mention that you are the third development director in three years and files are nonexistent?)

Imagine your offices receiving a call from an irate regular donor of thirty years, vowing to never contribute again because she has phoned three times in the past to have her deceased husband’s name removed from the mailing list – and she just received a newsletter in his name?

Imagine not having any idea of how well your Fall Appeal did – because the proper coding was never created in the donor database.

I have encountered these horror stories and, yes, worse, in a wide variety of nonprofit organizations.

An organization’s best campaign will fall on deaf ears if donors have given up on your organization in frustration over poor stewardship.

Attrition probably plays the biggest role in the problem. Staff turnover in development is a huge issue.

Penelope Burk, the founder of donor-centered fundraising notes that “Everyone in fundraising knows that high staff turnover in our industry is ferocious” and is creating a new study on the reasons and affects of staff turnover.

Of course, one major reason for staff turnover relates to the often abysmal pay in the field. Another relates to unrealistic benchmarking and not recognizing that some cultivation efforts will take months, if not years, to bear fruit (it’s only after a year to even two years that an organization will typically begin to see real results from the grantwriting process).

Yet another part of the problem is the cavalier attitude paid to establishing firm guidelines and record keeping, support staff, selecting an appropriate donor database, budgeting for training and recognizing the long-term value of maintaining the integrity of your data.

From the smallest organization to the largest, written protocols should be established early on setting forth the most exhaustive details – from your organization’s salutation standards, to who signs thank you letters – and regularly tweaked (and always put in writing).

What salutation style does your organization prefer? First name or Mr./Ms./Mrs.? Ampersand or “and”? How do you handle deceased records? How are the grant files maintained?

What is the turnaround time for gift acknowledgement? One week? Two? Who places thank you phone calls? When and why?

When deciding upon a donor database, is price your only criteria (I sincerely hope not!)?

Once you have a database in place, is your organization recognizing the value of proper maintenance, including training and the hiring of a qualified database manager? Raisers Edge can be the Cadillac of donor databases – or an Edsel, depending on how many people have had their hands in it and how badly folks have mucked up the coding.

And Excel is not a database. It is a spreadsheet. If you’re keeping your records in Excel, you’re in for some problems.

Development is, by nature, data-driven. Pay attention to the details.

Monday, August 18, 2008

Grant Proposal Writing - YOUR Best Tips!

Whoever ceases to be a student has never been a student.

No matter how long you’ve been writing grant proposals, or how successful you’ve been, you can always learn something new. It pays to refresh your thought processes from time to time, either by taking another class in proposal writing (or even a short story writing class) or reading another grant proposal writing book.

Think outside the box to boost your creative thought process. If you’ve never read Truman Capote’s “In Cold Blood,” do. The writing is so succinct, so eloquent – in the words of one reviewer “I haul my copy out every 2-3 years just to remind myself how wonderful the rhythms and nuances of the American language can be at the hands of a master.”

Get yourself outside of your organization to actually meet your constituency. Talk to your board members. Find out why they give of their time and money.

Recently I posed the question “What is your best tip?” to the Grants listserv of CharityChannel. Following are some responses that may help your proposal writing.

I find that an important aspect of grant writing is putting the proposal in the right "voice" for the funder. In general, funders respond well to language that is personal but not overly familiar; for example, using "we" instead of "The X Organization" when referring to yourself. Don't use slang or colloquialisms; define technical or discipline-specific terms a potential funder might not know. Sound enthusiastic about your proposed project but not wildly exuberant.

However, some funders--especially government and academic funders--respond to a more formal voice--"The X Organization" rather than "we." They also generally do want to see technical and discipline-specific terms in the proposal, whose correct usage demonstrates your knowledge of the field.

One way to try to identify the correct voice for a specific funder is to look at their application guidelines, and use the voice they do. If you can get copies of proposals they've funded, that may give an even more specific view of what they'll respond well to.
Another idea is to avoid writing in BIG BLOCK paragraphs. Break such
paragraphs into bite-size pieces. Readers don't like having to wade through
huge blocks of print.

throw out the jargon and mean-nothing phrases. If you are having a hard time explaining the project, its outcomes or the need for it in a straight forward manner,
it appears that you don't really know the answers or are hiding behind
convoluted language.

Wednesday, August 6, 2008

Six Critical Things to Look For in a Foundation’s 990 For Successful Grant Funding!

Prospect research is the absolute key when you're investigating potential sources of foundation funding. And there is no finer tool for truly observing the workings of a private foundation -- and whether or not their mission provides a match with your organization -- than with a thorough investigation of a foundation's federal 990-PF form (downloadable at a number of sites for free, including Guidestar and Nozasearch).

For a clearer picture, download the past three years of the foundation's 990.

What, exactly, should you be looking for? Let’s take a walk through a typical grantmaking foundation’s 990-FP:

1. Do take a look at the foundation’s Fiscal Year. Why? Well, if they happen to be closing in on the end of their fiscal year, they may have already spent the required 5 percent payout. On the other hand, if they’re fairly new to grantmaking, the foundation may have yet to hone their grantmaking policies – and you may get lucky if they’re looking to send some last minute grant checks out the door.

2. Assets: Note, of course, the total fair market value of all assets recorded on line 16 for the last year reported. Now take a look back - has the XYZ Foundation's assets declined or grown over the past few years? Are they a fairly new operating foundation?

3. Part I, Analysis of Revenue and Expenses summarizes other sections of the report. Pay particular attention to line 1. If major contributions have been made during the year in question a founder or trustee may have recently passed – and an increase in giving could be in the future.

4. Part VIII – Take note – here’s one of your most important resources. Information about officers, directors, trustees, foundation managers, highly paid employees and contractors: You will certainly want to note the names of the trustees. Could members of your board possibly know any of the trustees of XYZ Foundation? Does the XYZ Foundation have staff members or is it entirely family-run? Are the trustees paid?

5. Part IX-A - Summary of Direct Charitable Activities: Here's where you find out the exact dollar amount given in grants. If the foundation you’re researching tends to give many grants in the $2,500 to $10,000 range (as opposed to a few grants in the $25,000-$100,000 range) and you are a first time applicant, you’ll want to frame your first ask accordingly.

6. Part XV: This section will tell you how grant applications should be prepared, if there are any deadlines, etc. along with a listing of grantees. Although it's still a good idea to phone and get grant application guidelines directly from the foundation in question (or their website), this section will get you started (and don't write a foundation off if they specifically note that they only grant to pre-selected organizations - I've had success with smaller grants of $250-500 with these foundations when there was an otherwise good match in giving!) Are there organizations similar to yours on that listing of grants given in 2003? What is the dollar range in their grantmaking and where would your organization fall? Income from investments: Why would this be of interest to a potential grant-seeker? Taking a look at the XYZ Foundation's investments can give you a generalized idea of their overall philosophy. Are their investments centered in "grandfather" stocks? Their philosophy may be rather traditional and conservative. Do they invest in eBay and Amazon? Perhaps they're more open to creative approaches to problem solving and would welcome a more inventive grant application.

Have your basic funding research form ready and do a little detective work to really "get to know" the foundation you're seeking funding from. You’ll dramatically increase your chances of successful funding!