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Cliff Diving: Sequestration and A New Year’s Resolution for Nonprofits and Local Public Agencies Worried About the Fiscal Cliff and Grants

EDIT: It looks like we’re not going over the supposed cliff. But much of the analysis below will remain relevant in the coming years, as political fights about debt, spending, and taxation continue.

EDIT 2: The analysis below has been augmented with “Sequestration Still Looms Over the Grant World: Two Months and Counting.”

I find it hard to believe, but as I write this post in the waning hours of Sunday in the waning days of 2012, it seems that the President and Congress are actually going to do a Thelma and Louise and send us collectively off the dubiously named “fiscal cliff.”

If this happens, we may see sequestration. As I understand the implications of sequestration on domestic discretionary spending, including funding for block granted and competitive grant programs, this would mean at least an 8.8% haircut across the federal spending board. Since we’re now already three months into the FY ’13 budget year, however, there are only nine months left, meaning that the cutbacks could be as high as 15%.

Now, what “across the board” means is still subject to interpretation, as this has not actually been done before. One assumes current grantees would get an immediate budget reduction notice, while open RFP competitions might be scaled back. There would also significant impacts for federal sub-grantees for such locally administered block granted programs as CDBG, CSBG, OAA, and so on. The mechanics of sequestration are subject to murky federal regulations and a cadre of anonymous GS-12 and GS-13 budget officers spread across the departments, who are going to be in particularly bad moods coming back after their Christmas holidays to this morass.

The short-term impact of sequestration for garden-variety nonprofits and public agencies that have direct or indirect federal contracts, or are vying for discretionary grant funds, is sure to be confusion in the short term and chaos over the medium term. But—and this is big “but” (so to speak)—it’s not the end of the world. To quote REM, “It’s the end of the world as we know it and I feel fine.” While media pundits and trade association/advocacy groups will make a lot of noise, the grant world will return to normalcy once the temporary Federal crisis passes.

Despite sequestration and ongoing budget battles, I think significant cutbacks in federal funding for discretionary grants are unlikely, as least for the next few years. What is more likely is a slowing of the increase in federal spending, or as it is more popularly called in a phrase I’m beginning to intensely dislike, “bending of the cost curve.” Keep in mind that we have not had a federal budget in four years and probably won’t have one anytime soon, as the feds will continue to operate with continuing resolutions and baseline budgeting. Thus, unless there is a sudden come to Jesus moment among Democrats and Republicans, it will be the same as it ever was.

This brings me to my suggested New Year’s resolution for nonprofits and local public agencies–take a hard look at your current programs and new initiatives in the planning stages. While there will still be plenty of RFPs available, the competition for government grants is sure to be more intense as the nation stares down its tax and spending challenges.* Seek foundation grants too; as the economy has staggered out of the Great Recession, foundations have recovered investment losses and are going full steam in grant making.

For those nonprofits that survive mostly on donations, a bigger issue is the potential of limits on the charitable tax deduction, which we wrote about recently in “Nonprofit ‘Whales’ May Face Extinction with Potential Tax Law Changes.” In other words, diversify and your organization will thrive in the exciting new year.


* Free proposal word here. In grant writing, there are never any problems, only challenges.

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Nonprofit “Whales” May Face Extinction with Potential Tax Law Changes

I’ve about had it with the endless blathering about the so called fiscal cliff.* There is one nugget in the story, however, that should strike fear and loathing into the hearts of nonprofit executive directors: Whether or not President Obama and Speaker Boehner hold hands as they jump off the cliff, America faces an enormous fiscal challenge that will have to be addressed in the coming years, because we spend more than we take in and have for about the last ten years. As Herb Stein’s Law states, “If something cannot go on forever, it will stop.” The inevitable tax reform that will result is likely to include significant limits on the charitable tax deduction.

While nobody knows what form changes to the charitable tax deduction “loophole” might take, it’s a good bet that the annual total for all deductions, including the charitable tax deduction, will be capped at some number—say $25,000. “So what?” you say. “I’ve got lots of donors and there’ll probably be a minimum gross income, like the currently popular $250,000 per year, that is somehow supposed to equate to ‘millionaires and billionaires.’ And it’s time we stick it to the one percenters.”

But many donation-supported nonprofits have lots of supporters who make small, albeit regular, donations to the cause. As any executive director knows, however, these donors take lots of care and feeding to extract money. As a result, the return on the time investment in getting these donations is fairly small. Instead, for many if not most donor-supported nonprofits, a relatively few large donors actually keep the doors open and the lights on.

Like Las Vegas casinos who depend on high rollers, these donor “whales” are critical to many nonprofits. Just like their casino counterparts, who are charmed by private jets and fancy suites, nonprofit whales also demand perks like a seat on the board, constant phone calls and ego stroking. It’s worth it, though, because the return can be enormous. Thus, executive directors spend a lot of time whale watching, while their underlings curry favor with the everyday donors and volunteers.

Restrictions on the charitable tax deduction will probably make whale herding much more challenging. A typical donor whale might support four or five charities generously. When the tax benefit is capped, as it likely will be, that might drop to two or three. Your nonprofit could be left on the whale watching cruise with nary a fluke in sight.

The good news in all of this is that increased tax revenues from tax reform will mean there will be more government grant dollars up for grabs, or at least fewer extensive cuts.

EDIT: The WSJ ran “Should We End the Tax Deduction for Charitable Donations?“, which engages the same questions as the post above. If the WSJ and other major media outlets are debating this issue, you can bet there’s a real chance of actual changes.


* Or to quote the inimitable Samuel L. Jackson in Snakes on a Plane, “Enough is enough! I have had it with these motherfucking snakes on this motherfucking plane!”.

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Teams don’t write grants: individual writers do, one word at a time

Teams don’t write proposals. If you hear about a team that is writing a proposal, that translates roughly to “lots meetings are being held, but no one is actually working on the proposal.”

We sometimes hear people at nonprofit and public agencies talk about how they’ve assembled a “team” to write a proposal. For some reason, proposals written by “teams” have a habit of a) not getting done, b) if they are done, being done unevenly at best, and/or c) creating permanent acrimony among team members.

Do you remember “group work” when you were in middle and high school, which meant that one responsible person did the entire project while the other members goofed off and then took as much credit as they could? That’s what you’ll get with proposal writing assignments, only the stakes are higher.

Every time we hear about proposal writing teams, we know that the person talking doesn’t know how proposals actually get written and is probably working on a proposal that won’t be submitted anyway.

For example, we were recently working on a large federal grant proposal for a school district in the midwest. Throughout the engagement, our contact person keep talking about “the team” that was working on the proposal from their end. When the proposal was nearly done—on the Sunday before the deadline—I heard from out contact person, who finally admitted that “the team” had abandoned her and she had to more or less pull an all-nighter by herself to ensure that we were able to finish the submission package.

Saying that you’re “assembling a team” sounds good: one imagines the innumerable scenes in movies and TV shows in which the ultimate crime or cop group gets wrangled together for one big or one last job.* The members look suitably grizzled. They all have nifty specialties. These days there’s inevitably a hacker who can magically “bypass building security.” The leading men are dapper and debonair, the leading women beautiful and feisty. Unfortunately, in the real world, writing is still best done by a single person who can keep the narrative complexity of a difficulty response in their head.

We’ve written about how to write a proposal before, most notably in “One Person, One Proposal: Don’t Split Grant Writing Tasks.” We’re writing about it again because we see the same set of mistakes again and again.

If you’re drafted into a “grant writing team,” be aware that you’ll probably have one of two roles: You’ll end up writing the vast majority of the proposal, or trying to make yourself look good while someone else writes the vast majority of the proposal. No amount of dividing up tasks will solve the essential problem of facing a blank screen, a full RFP, and starting to type.


Isaac’s favorite example of this comes from The Magnificent Seven, which is actually a good movie. The first thirty or so minutes of the movie consists of Yul Brynner collecting his expert gunmen. Fortunately or unfortunately, however, most nonprofit and public agencies don’t have the same needs as a Mexican village beset by bandits. Usually. Those that do, however, might be the subject of another post.

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Nonprofits must keep searching for new revenue: “Communities for Teaching Excellence” and Gates Foundation funding

In the L.A. Times, Howard Blume says that a “Gates Foundation-funded education-reform group [is going] to close,” because the organization—Communities for Teaching Excellence—lost 75% of its funding. That 75% came from a single source: the Gates Foundation. This story holds an important lesson for nonprofits: you’re only as good as your current, and next, revenue source.

Actually, Blume says that the nonprofit’s board chair claims that Communities for Teaching Excellence decided to shut itself down:

But Communities for Teaching Excellence was not hitting its marks in terms of generating press coverage and building community coalitions, said Amy Wilkins, chairwoman of the board of directors. She said the board voted to shutter the organization; the Seattle-based Gates Foundation agreed with the decision.

This seems. . . improbable. We’ve rarely encountered a nonprofit that willingly shut down.* But we have encountered lots of nonprofits who ran out of money and then decided that their mission was complete and that they could move on. The situation is analogous to high-level political, military, and business leaders who are told to have their resignations on their bosses’ desks by the morning. All of us have seen that sort of thing in the news: “I would like to spend more time with my family. . .” is usually code for “was fired.”

Nonprofits shouldn’t rely on a single source of income. Plus, once you have income, use that source to leverage more.** A single source source—especially one with cachet like the Gates Foundation—makes it easier to get more, because foundations like a winner and like to be associated with winners.

Foundation and corporate giving programs, like venture capitalists, are herd animals, and they’ll assume that if someone else is funding you, you must be good. Sometimes they’re even honest about it, as an RFP from the Crossroads Fund makes clear: “We fund groups with budgets under $300,000, and look for organizations with diverse funding sources” (emphasis added).  I’ll leave their dubious use of commas aside and point out that they’re just unusually honest. As with the dating market, one victory tends to provide the social proof necessary to beget other victories, and Communities for Teaching Excellence already had one major victory.

But they may have stopped swimming, and as soon as they stop swimming, they died.*** Or they may have tried to keep going and simply done so ineffectively; we can only speculate from the outside. I’m guessing, however, that they succumbed to the disease often caused by success: assuming that you’re golden and can do no wrong.

Communities for Teaching Excellence itself was even doing some interesting work: the Gates Foundation “funded the development of new teacher-evaluation systems,” which is an issue that’s growing in importance. In The Atlantic, for example, Amanda Ripley explains “Why Kids Should Grade Teachers:”

A decade ago, an economist at Harvard, Ronald Ferguson, wondered what would happen if teachers were evaluated by the people who see them every day—their students. The idea—as simple as it sounds, and as familiar as it is on college campuses—was revolutionary. And the results seemed to be, too: remarkable consistency from grade to grade, and across racial divides. Even among kindergarten students. A growing number of school systems are administering the surveys—and might be able to overcome teacher resistance in order to link results to salaries and promotions.

I’m not sure that Communities for Teaching Excellence was working on this particular set of issues, but education reform does seem to have reached a critical mass. Maybe something substantive is actually happening in the field.

By the way, the chairwoman of the board also has a grant writer’s sense of proposal-ese:

“The field was more complex … and building these partnerships was more difficult than anybody had imagined,” Wilkins said. “The inventors of this organization had envisioned more robust activity at the local level than we were achieving.”

What does “complex” mean? What does “more robust activity at the local level mean” in this context? Blume either didn’t ask or didn’t tell us. That he regurgitates this kind of language is indicative of the problems of the newspaper industry as a whole: reporters not only don’t call people on their BS, but they repeat the BS.


* In the rare cases in which a nonprofit willingly shuts down, the shutdown is often caused by the departure of key staff people, or the death or departure of the founder or a major true believer.

** Other businesses face the same basic set of problems. We’ve occasionally been approached by organizations that want to buy the vast majority of our effective grant-writing capacity, and although those discussions have never gone very far, we also don’t want to be beholden to a single client, so wouldn’t take the offer.

*** This is similar to raising money for startups and being an academic (at least until tenure).

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Why nonprofits are more like businesses than you realize

In a Hacker News thread, “guylhem” asked a (very) common question, in the context of firms that specialize in providing services to nonprofit and public agencies: “Why exactly is profit / commerce considered a bad thing?”

Since we’ve been working with nonprofit and public agencies for decades, we naturally have some ideas about the issue (we’ve discussed some of those ideas before, in “Tilting at Windmills and Fees: Why There is no Free Grant Writing Lunch and You Won’t Find Writers for Nothing” and “Why Fund Nonprofits, Public Agencies, and Other Organizations Through Grant Applications At All?“). A lot of people feel nonprofit and public agencies are not supposed to be like other businesses, even though in reality they share a lot of the needs and attributes of for-profit businesses.

Consider similarities. Nonprofits need their toilets to work. They need an IT guy or gal. Though they obviously don’t face the profit drive that businesses do, they still need to “make” more money than they spend, either to invest in new services or build a small but prudent reserve. If they don’t make more than they spend, the nonprofit will eventually be shut down. Nonprofits only have four basic ways of making money: grants/contracts, donations, fees for services, or investment income.

Because nonprofits, like other businesses, have a wide array of needs, they buy goods and services they can’t productively make or do themselves. We’re fond of the plumber analogy: most nonprofits do not have a plumber on staff, and, when their toilets clog, they hire someone to unclog the toilet. When the plumber is done with the job, she or he presents a bill and the nonprofit pays it.

That’s straightforward. But many people seem to feel that grant applications are more like a college admissions essay, in which hiring a consultant is somehow cheating.* We obviously don’t think so, since our entire job involves preparing grant applications. Nonetheless, those people don’t really think that grant writing is like plumbing (at least until they need a grant writer). Regardless of feelings, however, nonprofit and public agencies that submit better proposals tend to get funded more often than those that don’t—so feelings about the purity of the grant writing process get weeded out by the “market,” which still exists for nonprofits. People who think they’re good grant writers but turn out not to be eventually find they can’t run their nonprofit, or they can’t expand it, just like people who think they’ve got a great business idea but can’t sell.

We’ve also argued before that there’s no reason in principle why a nonprofit grant writing agency can’t exist, but in practice none do, and, even if they did, the demand for their services would far outstrip supply, as usually happens when something is given away. If you want to know why you generally can’t get something for nothing, well, look around: few people or firms give valuable things away, while many people or firms are selling valuable things, and prices tend to show what people in the aggregate think is valuable and what people think is less valuable.

Demand for “free” grant writing services would be especially high because grant writing is very boring, difficult, and tedious—a troika that makes free grant writing especially unlikely, since grant writing doesn’t give people the good feelings they might get from, say, doling out soup at a soup kitchen, or providing pro-bono legal work. Volunteers have their place, but most organizations that operate on more than a shoestring basis are quickly going to discover the limitations of volunteers.

Even nominally low-cost grant writing services often turn out to be quite expensive. As most of us have discovered the hard way, it’s not at all unusual to get what you pay for. Yes, there are exceptions, but for the most part higher prices imply higher quality, at least up to a point. We’ve been hired by innumerable nonprofit and public agencies to attempt to salvage jobs prepared by “low-cost” grant writers, and we’ve also had nonprofits call us, hire someone else, then call us back for the same program in the next funding round and hire us instead of the other firm.

In response to the ideas above, “pbreit” replied: “I would think that a nonprofit reasonably considers grant writing a core competence or at least well closer to a core competence than, say, plumbing.” Maybe that’s true. But many nonprofits are good at delivering human services, and less good at writing proposals. Those skills do not necessarily co-occur, and if there’s any overlap between the skill of delivering human services and the skill of writing, it’s pretty slender. Plus, becoming a great writer is a “10,000-hour skill” that takes a lot of deliberate practice to develop. That’s why you have to take so many years of English classes in school (though I realize many of those English classes are bad, but that’s another topic). The average person who decides, “I want to become a competent grant writer” is probably looking at a couple of years of effort.

Sufficiently large nonprofits usually do have a grant writer on staff, but smaller ones usually don’t. A really good grant writer will probably cost at least $70,000 per year in salary alone, and is likely to cost much more. That big number helps explain why relatively few small- to mid-sized organizations have one. In addition, hiring a grant writer who turns out not to be particularly good at his or her job can really hurt a nonprofit. We’ve been hired by many, many nonprofit and public agencies who have grant writers on staff—sometimes for positive reasons (the in-house grant writer is overwhelmed or on leave) and sometimes for less positive ones (the in-house grant writer isn’t very good at writing proposals, is scared of the RFP or the Executive Director wants to play “shoot the consultant,” if the proposal is not funded). For small nonprofits, hiring a full-time or even part time grant writer might actually be outside their core competency.

What we’ve described in the last two paragraphs is a specific instance of a more generalizable question about whether one should hire a consultant, learn a skill, hire an employee, or not have it performed, and we’ve written about that issue in “Consultants, Employees, and More: Should We Hire a Grant Writer? And How Will Our Agency Complete Proposals?” Different organizations will deal with these questions in different ways, depending on a variety of factors.** These problems recur in the business world and in the personal world: Do you want to learn how to cook, hire someone else to cook through going to a restaurant, or not eat? Do you want to learn bike maintenance, take your bike to a shop, let your bike degrade over time, or not ride?

The most reasonable middle ground for nonprofits, for-profits, and people in general is to work to expand your range of basic and advanced skills while simultaneously acknowledging that you’re not going to learn everything. Things you don’t know how to do but want done you’ll probably have to pay for, one way or another. This isn’t always true—family members generally don’t charge each other when one person makes dinner—but as a general rule it’s pretty good, since strangers very rarely give valuable things to other strangers without a reason. Attractive women have told me that men will often do things for them and buy drinks for them and so on, without any or much prompting, but I definitely don’t qualify that as being “without a reason,” since the reason in most cases is probably obvious.

I don’t think most people are consciously thinking about the choices between learning, buying, and not having. But if you want to run a successful nonprofit, public agency, or business, you should start thinking about them now.


* Actually, hiring an admissions essay consultant starts to make sense when one thinks about how much money might be on the line in terms of scholarships, but that’s another issue for another day. The higher the financial stakes in a one-time event that doesn’t allow repeated attempts at practice, the stronger the incentive to make sure one does everything one can to win.

** If you’re curious about how this works in an academic context, check out Coase’s famous essay, “The Nature of the Firm,” in which Coase describes why firms exist at all.

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Time Banks, Barter, Community Gardens and More: Economic Misery Provides Opportunities for Nimble Nonprofits

As we’ve written about before in “What Budget Cuts? The RFPs Continue to Pour Out,” “One, Two, Three* Easy Steps to Start-Up a Nonprofit Upstart,” and “Grant Writing from Recession to Recession: This is a Great Time to Start a New Nonprofit,” the Great Recession and continuing economic malaise present tremendous grant opportunities for nonprofits—provided they are fleet of foot and keep their eye on the prize.

The Wall Street Journal’s “For Spain’s Jobless, Time Equals Money” offers a case on point. The story details self-help efforts by desperate unemployed Spaniards, particularly those in their mid-20s to mid-30s (their unemployment rate is over 50%, which is similar to that of African American young adults), to overcome jobless and essentially cashless lives. In addition to the ever popular community gardens and direct barter systems (“I’ll give you a chicken for a haircut”),* these efforts include time banks.

A time bank is essentially a formalized barter system in which hours worked or stuff provided by one member are quantified and “banked” to be used in exchange for goods or services from another member. Thus, if you have a chicken and need a haircut, you don’t have to find a hungry barber. Rather, you find another member who wants a chicken, get credit for the transaction, and spend the credit with a member who is a barber. The barber gets credit for the haircut and uses it to have his scissors sharpened.

The article cites other permutations of barter systems, including gardening co-ops, in which people garden together and trade their labor for shared produce. Free stuff exchanges, which are easily facilitated by social media, are also becoming popular. At itinerant locations, like somebody’s basement or an actual storefront, people bring piles of stuff they don’t want in order to pick through piles of other people’s stuff they might want, all without exchanging money. The ultimate expression of these ideas is to develop locally accepted script that takes the place of currency, a concept that bloomed in America during the Great Depression (“Hoover Bucks”).

Some or all of these make dandy project concepts for foundation grants—particularly for organizations working in extremely disadvantaged communities. As we’ve written about before, grant writing is largely the art of telling funders what they want to hear. Any of these time bank or barter-style ideas will warm the stone-like hearts of foundations with preconceived notions of how services should be delivered to the poor folks—through methods like sweat equity, bootstrapping, using local resources to reduce carbon footprints, and the like. A thousand programs and communes have been started with similar ideals, but why not begin a few hundred more?

Although ideas about time banks and bartering spring to life when the economy is sufficiently rotten, to most funders barter and self-help projects will seem like new ideas if they’re pitched carefully. In taking these project concepts and running with them, you’ll keep your staff busy, build neighborhood social infrastructure, and you might even help a few people in need.

While the trend toward time banks, barter, co-op gardens, free stuff exchanges, and the like help keep people afloat, they are of course disastrous for a modern, currency-based national economy, which is underpinned entirely on people being willing to accept pretty pieces of government issued paper for their labor. It also makes tax collectors unhappy, since the vast majority of these transactions are “off the books,” even though the value is supposed to be reported.**


* Even Seliger + Associates has bartered before. When we were starting out about 20 years ago, we had little money for equipment and were struggling to make do with a single PC and its 12-inch screen. But a computer recycling nonprofit appeared, and we traded grant writing services for a couple of somewhat out-of-date but serviceable PCs with luxurious 15″ monitors. About 12 years ago, I came across a party company run by a fellow who also had a nonprofit on the side that worked with at-risk kids. At the time, I had teenage twins, so we traded grant writing services for a party—which is surely a one-time trade in the annals of barter. And, yes, I reported the value of goods and services received on my tax returns. I’m still open to the idea, if someone has an interesting trade to make. Grant writing for a Porsche 911, anyone? Send me your ideas and maybe a trade can be made.

** For a great description of how the underground economy works in poor communities, see Sudhir Venkatesh’s seminal Off the Books: The Underground Economy of the Poor.

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The Nonprofit’s Grant Writing Life Cycle: No Matter Where You’re Going, There You Are*

Seliger + Associates works with the full spectrum of nonprofits, from newly minted ones to some that have been providing services for 150 years (this is not an exaggeration, as we have one client in Chicago that was formed in the 1860s). We’ve seen how nonprofits morph with respect to their grant writing opinions and practices as they careen through their life cycles. As I pointed out in One, Two, Three* Easy Steps to Start-Up a Nonprofit Upstart, most nonprofits don’t begin life through grant funding; instead, they rely on a loan/gift from the founder and/or an angel “investor.” As the nonprofit gathers steam, however, and begins to expand the services it delivers, the need for grant writing grows, because few nonprofits can offer a wide array of services to a large number of people while operating on a shoestring.

Since new nonprofits usually have extremely limited resources, most cannot afford to hire a grant writer, either as a staff person or consultant. This leaves a conundrum, as the nonprofit has increasing grant writing needs that are tempered by lack of resources. Or, as in the hoary aphorism, “it takes money to make money.” At a basic level, young nonprofits must function like emerging small businesses to meet capital needs to expand service delivery while supporting ongoing operations. Essentially, they have three options if they want to supplement donations and capitated revenue streams with grants:

1. The founder needs to quickly learn how to be a grant writer. Unless the founder is already a skilled writer—and few people are, though many more believe they are—this option is unlikely to produce immediate results because she would have to first learn to write and then learn to grant write. As we pointed out in aCredentials for Grant Writers from the Grant Professionals Certification Institute—If I Only Had A Brain, one can’t will oneself to become a grant writer by going to a three-day training seminar.

Some founders,** however, have the writing skills and the passion to churn out good enough proposals. But they may not want to be stuck with grant writing tasks; few people decide to save the world, or at least their corner of it, by spending a lot of time alone with their computer and an RFP, just as many science professors are dismayed by the sheer amount of grant writing they have to do to keep a lab funded.

2. The organization finds a person who loves it and/or its mission and already happens to be a grant writer and will volunteer her time. This is even less likely than option one, since there are so few grant writers you’ll be looking for the proverbial hen’s teeth.

3. Scrape together enough resources to hire a grant writer, most likely as a consultant, since this is usually a more effective option than trying to find an employee who also has or can quickly develop grant writing skills. The hen’s teeth problem again.

As the organization moves into adolescence, usually through a combination of donations and some success with grants, it will naturally gravitate toward option three. Many nonprofits try to build an internal grant writing capability by hiring at least one employee with grant writing skills (or grant-writing potential) and also providing in-service grant writing training to existing staff.

Sometimes this even works.

But when grant writers are grown in-house, they often move to other nonprofits or universities that offer more money, or the grant writer achieves sufficient status within the organization that he or she doesn’t want to write proposals any more—which isn’t surprising, given how difficult writing proposals is. Nonetheless, in-house grant writers are quite common.

When the nonprofit achieves adulthood, this internal capacity is generally supplemented with the external resource on a consultant like Seliger + Associates. We are frequently hired by organizations with internal grant writing capacity. An entity that already has a grant writer on staff usually hires a hired gun for three reasons:

1. The internal grant writer is terrified of a particular RFP—and what’s anybody else to write it.

2. The internal grant writer is swarmed over by RFPs and and can’t keep up.

3. Finally, there is the ever popular “shoot the consultant” motivation used by Executive Directors who want somebody to blame if the grant is not funded, or if the organization is experiencing some other kind of turmoil and needs a common enemy to create unity within it.


* Buckaroo Bonzai in one of my favorite movies from the 1980s, the curious The Adventures of Buckaroo Banzai Across the 8th Dimension.

** Including myself, as I described in my first GWC post, “They Say a Fella Never Forgets His First Grant Proposal.”

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Repurpose: The Word of the Decade and a Word for Nonprofits to Live By

During this seemingly endless period of economic stagnation, “repurpose” has emerged as the word of the decade. Repurpose is omnipresent. My wife recently “repurposed” a duvet that our dog had chewed by patching the hole and stuffing it into a new cover she made from some leftover fabric from a long-forgotten sewing project. Angus Loten’s recent WSJ article, “When Cost Cuts Fail… Drastic Measures, tells the tale of small businesses repurposing their entire business model to stay afloat. It seems we are all repurposing: in some cases voluntarily, like my wife who enjoys interior design, and in more cases involuntarily, like the businesses in the WSJ story and the many unfortunate workers who are being repurposed into consumers at food pantries and human services providers by long-term unemployment.

In many ways (consider this another free proposal transition phrase), nonprofits are really small businesses, even if they are run by True Believers. Like small business, nonprofits have formal or informal business plans; resources in the form of cash reserves, facilities, equipment, human capital, and organizational experience; target markets and customers; “angel investors” in the form of consistent volunteers and donors; and, although they operate as “tax exempt,” nonprofits are responsible for payroll taxes, gas taxes, utility taxes and user fees (thinly disguised taxes enacted by strapped local governments), meaning their tax burden is not zero as is often imagined.

One big difference between the challenged small businesses discussed in the WSJ story above and most nonprofits is that nonprofits usually lack the ability to obtain lines of credit to carry the agency during difficult times and are more likely to quickly cut staff and programs than businesses that depend on personnel to generate revenue. As the nonprofit cuts staff and programs, it loses its organizational credibility among its consumers, remaining funders and, most importantly, future funders. This can become a death spiral for a nonprofit. Since the Great Recession hit, we have worked for some hollowed-out nonprofits that at one time had fairly broad programming but are now more or less shells. Through the magic of grant writing, we can make them appear whole, at least in the proposal world. It is better for the organization and the populations they serve, however, to repurpose themselves before they become nonprofit versions of the ghosts in Peter S. Beagle’s A Fine and Private Place, who take a while to realize they’re already dead.*

Whether they realize it or not, many nonprofits will either have to repurpose themselves by seeking new grants, making better use of social media and accepting the changes that have arrived in the nonprofit world.

If you’re running a nonprofit, a staff member sitting in a strategy meeting, or a board member, find a way to repurpose your nonprofit. Look at the resources you have, your nonprofit competitors, the challenges emerging in your community and the endless possibilities of new federal, state, local and foundation grants. Get going. As I have been blogging about for months, the most nimble nonprofits will transition part or all of their suite of services (another free proposal phrase) and will emerge different but stronger when the economy eventually recovers. I just didn’t have the right word for this process, but thanks to my wife and the WSJ, I do now: repurpose.


* Like the rest of human existence, when a old nonprofit does not repurpose itself and goes under, it will provide a niche for a new nonprofit, since presumably the problems it was addressing still exist in its target community. See this post I wrote on the subject last November: “Grant Writing from Recession to Recession: This is a Great Time to Start a New Nonprofit.”

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Ch-ch-ch-ch-Changes Keep Coming to the Nonprofit World

A continuing avalanche of bad economic news confirms the upheaval in the nonprofit world that I’ve been blogging about for the last few months. To paraphrase David Bowie in “Changes:”

Ch-ch-ch-ch-Changes
(Turn and face the strain)
Ch-ch-Changes
Don’t want to be a richer [organization]
Ch-ch-ch-ch-Changes
(Turn and face the strain)
Ch-ch-Changes
Just gonna have to be a different [organization]
Time may change me
But I can’t trace time

Not to compete with Jake’s bimonthly links posts, but a few recent stories should scare the bejesus out of most nonprofit executive directors:

  • The New York Times, July 29, 2011, Debt Crisis? Bankruptcy Fears? See Jefferson County, AL. Everyone involved in human services should care about Jefferson County, AL. Jefferson County is an urban county centered on Birmingham, the largest city in the state. Since we recently completed an assignment for a Birmingham client, I know the city is about 3/4 African American and about 1/4 of residents live below the federal poverty level (FPL). When the county goes bankrupt, folks in the city are going to have a much harder time accessing a whole slew of services, from family court to disability services to job training. The lines will be longer at the TANF and WIB offices, and the staffers in even worse moods as they face furloughs and layoffs. But that’s not the real problem: nonprofits who provide a wide array of wraparound supportive services (free proposal phrase here) are going to lose their county contracts when the need for services is growing.
  • National Public Radio (NPR), July 26, 2011, Wealth Gap Widens. As reported by NPR, “The gap between rich and poor has widened. Wealth is more and more concentrated among a select few, and those few are mostly white. The median wealth of white households is now 20 times that of black households, and 18 times that of Hispanic households, according to the Pew Research Center.” The net worth of most Americans is falling, while the gap between white and minority citizens is turning into a gulf (see Tyler Cowen’s The Great Stagnation for more on this subject). Unemployment is rising and government services are being cut–-a perfect storm for nonprofits.
  • The Wall Street Journal, July 29, 2011, Slow Growth Stirs Fears of Recession. The official growth in GDP was 1.3% for the second quarter of 2011 and .4% for the first quarter: “The economic recovery is grinding to a halt, raising the risk that the U.S. could fall back into recession and tightening the screws on Washington to resolve a debt-ceiling debate that threatens to inflict further damage on a fragile economy.” In most of the communities where Seliger + Associates works, nobody is worried about a new recession since the last one never ended.

I get calls every week from organizations across America that face cutbacks in traditional funding streams. Public sector bankruptcies, like the hapless Jefferson County noted above, will exacerbate the crisis. As I’ve blogged about before, the only real choices nonprofits have are to shrink in size, seek more donations, go after additional foundation and government grants, and/or re-think their mission and programming.

Two current clients illustrate two wildly different approaches to confronting the changing realities for nonprofits. Both clients provide after school services for low-income African American youth in two almost adjacent fairly large cities in Northern California. In homage to Client # 9, Elliot Spitzer, I’ll refer to them as Client # 1 and # 2.

Client # 1 offers a fairly standard mix of after school enrichment, mentoring and fitness programs, and has been funded mostly through federal grants and donations from local large businesses. This organization has gotten interested in childhood obesity, as popularized by First Lady Micelle Obama’s Let’s Move campaign. Client # 1 has decided to seek funds for childhood obesity prevention, as well as specialized mentoring. Both are laudable and fundable project concepts but do not address critical issues facing their target population, since the parents/caregivers of the kids are unemployed, underemployed and/or underwater in their mortgages. They’re having trouble affording food of any kind for their kids, making the relative merits of arugula versus french fries unimportant. The youth probably don’t have time for mentors anyway, because they’re working to help support the family. In other words, Client # 1 is seeking funds for services that meet interesting but peripheral needs of their target population, instead of basic needs.

Client # 2 runs more or less the same programs as Client # 1 but is larger and has been operating longer. This organization has been primarily funded through county contracts, modest user fees, and lots of small donations. While trying to maintain its core services, Client # 2 has decided to seek funds for two new programs. The first will provide emergency food and meal services for the families of targeted youth. The second will help the 5,000 or so youth and young adult offenders about to be released into their county as a result of a recent Supreme Court decision that will return tens of thousands of state prison inmates to the streets in a few months. Regardless of the merits of the Supreme Court decision, the arrival of thousands of ex-offenders, all of whom need housing, jobs and everything else, at once is going to overwhelm the existing supportive services system for ex-offenders like a tsunami.

Put yourself in the position of a funder. Would you fund Client # 1, which has a strong track record and wants to operate innovative services that nibble at the edges of problems, or Client # 2, which has an equally strong track record and is trying to address basic and emerging challenges?

As always, we’re doing our best to help both Client # 1 and # 2 meet their funding objectives. Two similar clients are taking action to increase their funding streams in different ways, as they adjust to the changing economic environment of their communities. As Bowie put it, they’re both turning “to face the strain.” Make sure your organization understands that doing what you’ve been doing forever probably will not work. Be creative, be aggressive and go get some grants. As Coach Taylor said on the now-concluded show Friday Night Lights, Clear Eyes, Full Hearts, Can’t Lose!

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Why Clients Love and Hate Us (and Other Consultants), With An E-mail Example

As any consultant knows, some clients will hate you and some will love you. That’s certainly true of us, but the funny thing is that clients love and hate us for exactly the same reason.

It sounds counterintuitive, so let me explain using a recent “we love you!” e-mail from a client as an example:

Your assistance was truly invaluable; we could not have accomplished all of this without your excellent work. We really appreciated the Documents Memo, the specific deadline dates, the direction, advice and guidance and when you left decisions up to us, that was clear.

Please use us as a reference any time and any comments I’ve written here. Whether we get the funding or not, you provided us the opportunity to present the best package possible and best opportunity for funding.

We get attaboys like this regularly, and we like reading them because we take pride in our work.* Clients are often surprised when we do what we say and say what we do, which tells us something about other would-be grant writers.

We also treat all of our clients more or less the same way, which means that we produce complete and technically accurate proposals and minimize the amount of work our clients have to do. This means that we tell clients exactly what they need to do, how they need to do it, and when we need every piece of an individual proposal, which makes many of them love us.

But some clients hate us because we tell them exactly what they need to do, how they need to do it, and when we need every piece of an individual proposal. This thoroughness and lack of ambiguity actually makes them unhappy if they don’t really want to submit the application or want someone to blame if the application is rejected for reasons outside anyone’s control (which we’ve discussed previously here and in “True Tales of a Department of Education Grant Reviewer“).

A certain number of clients hire us, as far as we can tell, because they want to be able to tell others that they’re Doing Something. “Doing Something” is separate from wanting to turn in a complete proposal. An attitude like this doesn’t bother us, but when we first came across it it did surprise us. Usually these clients don’t hate us, but they rarely love us.

Then there are the clients who hate us, most often for things outside of our control. They don’t like that yes, in fact, they do need every single item listed in the documents memo if they want to be funded; they don’t like that we must have comments on the first draft within, say, a week, otherwise there’s not going to be adequate time for the second draft; they don’t like that we’re honest and direct; and so forth. We don’t make the deadlines. We only conform to them.

Our work is similar across clients: we read the RFP, deliver the documents memo (or “doc memo”), write the drafts of the proposal, prepare the budget, and assemble the final submission package. What’s interesting to us is the wide array of reactions we get from our clients. One of our challenges is to maintain our equilibrium regardless of our clients’ reactions. This is probably a problem universal to consultants.

Some are like the client quoted above. A small but real number of others aren’t. But we see our job as maximizing our clients’ probability of getting funded, and we do this by turning in complete and technically accurate proposals without missing a deadline. How our clients treat and feel about us varies widely for reasons largely outside our control.

On another note, grant writers are not miracle workers, although we sometimes resemble them, and we’re not True Believers (hence Isaac’s post, “Does Seliger + Associates ‘Care’ About Our Clients?“). Neither are other consultants, though they may pretend to be True Believers. We sometimes look like we are, but that most often happens when clients do as much as they can to help themselves too.


* In my other life, I’m a grad student in English Lit at the University of Arizona, which means I teach two sections of English Composition per semester. Usually I get a couple of “this class changed my life” e-mails after finals week. One of my favorite began this way:

I just wanted to thank you again for this semester. Although I enjoyed the material of the course, what I will keep with me for the rest of my life is what the course made me think about. Like I said, I am always one to (over…)-analyze and question things but doing a lot of the “why” exercises really helped me organize my thoughts in all areas of my life.

These messages give me hope during the inevitable experiences with apathetic or indifferent students, and the positive e-mails from students and clients are often pretty similar. Here’s a recent example from a client: “Your comments are good, helpful, and easy to understand.”