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I’m wondering if there is a better way to connect people of means that want to make the world a better place with people that can actually make that happen. Currently the process includes major donor strategies, planned giving, foundation grants, and numerous other arrangements. The problem is many worthy recipients cannot access the funds they need to do the good they do. They simply don’t have the capacity to compel the donors to give, so they continue to muddle through hand-to-mouth. Those that they minister to are changed forever but there are so many more that could be reached.

I wonder if there could be a universal grading system for nonprofits agencies like Standard & Poor’s, Moody’s and Fitch provide for bonds. I’m not sure what the criteria would be but it seems like it could be possible.

What do you think? Let me know your opinions and ideas. Who knows where this will go.

Here are six tips we picked up from the Stanford Social Innovation people. You should take a moment and browse their site: www.ssireview.org.

1. Avoid Mission Creep Most of the truly effective nonprofits get there and stay there by staying focused on their core mission. Over time it is all too easy to get side-tracked on good things at the cost of the best and nine times out of ten the best is directly related to the core mission of the organization. To avoid mission creep, always ask yourself, “How will this contribute to accomplishing our mission?”
2. Create Cross-sector Partnerships If we are going to solve the vexing social problems of our communities, we will have to cooperate with others actively involved in the solution. That includes other nonprofits, governments, and for-profit businesses that have an interest in the solution. It’s not complicated, simply engage the players in an active, ongoing conversation about the issues and let them know that the solution is your end game.
3. Learn to Lobby Sadly most nonprofits are entirely unaware of their need (and ability) to have a voice in the local and national legislatures. Public policy impacts your concerns both positively and negatively. In order to tip the scales in your direction, you need to lobby or join a group/association that does your lobbying for you.
4. Nurture your Network “Successful social innovators create and nurture communities of like-minded supporters.” (SSIreview, Winter 2007, p. 32)
5. Rely On Evidence Nonprofit executives need to learn how to make decisions on sound evidence rather than the management theory du jour. Basically that means digging deeper to expose half-truths and only basing your decisions on well-supported data that can be replicated in the future.
6. Tailor Your Fundraising Most nonprofits that raise large sums of money every year do so by concentrating their efforts on tried and true sources. If your network includes many major donors then that is where you should spend your fundraising time. If you have solid relationships with foundations or corporations in your area, then dig deep with them. But be careful not to develop tunnel vision. You must always maintain a balanced portfolio of funding sources.

At least 4-5 times a month I am asked for help in securing grants by individuals or agencies that do not have their 501(c)3. So what’s the big deal? Well without your 501(c)3 your simply not in the grantseeking game.

First of all, let’s talk about what the 501(c)3 is. According to IRS Publication 557, 501(c)3 is the official IRS designation for the majority of tax-exempt organizations. There are several other types of tax-exempt organizations but they are much more limited in scope (e.g. teachers retirement fund organizations - 501(c)11). Most organizations we consider “nonprofit” fall into the 501(c)3 category.

Basically a nonprofit must have a board of directors, bylaws, a particular purpose or mission and its officers and directors cannot benefit materially from the profits of its operations. The big benefit of being a 501(c)3 nonprofit is your contributors receive a tax break for their contributions and your organization is exempt from federal taxation. But first you must apply to the IRS for determination as a 501(c)3 nonprofit.

These are the primary steps in applying for your status as a 501(c)3 nonprofit:
1. Apply for an Employer Identification Number by filing IRS form SS-4.
2. Fill out IRS Form 1023 (Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code) and write a check payable to Internal Revenue Service for applicable filing fee ($300 or $750).
3. Assemble information to be set forth in IRS Form 1023, including:
a narrative description of organization’s past, present and planned activities, organization’s sources of current and proposed financial support, its actual and planned fundraising program, financial information (if the organization is newly created, current year and the two following years’ projected budgets; otherwise, budgets for the current year and three previous years)
4. Adopt a resolution authorizing filing for tax exemption and all documents related to application, and authorize an officer or attorney-in-fact to sign the application. If attorney-in-fact is authorized, you must prepare IRS Form 2848 (Power of Attorney and Declaration of Representative).
5. Obtain a conformed copy of Certificate of Incorporation and By-laws if any have been adopted.
6. File application with IRS Exempt Organizations Division. To order forms, call (800) 829-3676.
7. A request for 501(c)(3) status may take six months or more to be granted. In the meantime, you must indicate to interested parties: “Application for 501(c)(3) tax exemption pending.”
(Special thanks to The Donors Forum: http://www.donorsforum.org/resource/grant_r_apply501.html)