Tag Archives: charity rating

Things to consider when making donations

Making donations to charitable organizations can be a very strategic, methodical, and evaluative process. For many, the donations are more than mere “gifts”, they’re actually investments in causes, organizations, needs, and beneficiaries. A key component of the donor-decision process is quality information. When working with our clients on their giving strategies, we advise an analysis of organizations in five functional areas of charitable operations.

Data & Efficiency

Be sure to look at the organization’s finances to determine such things as proper allocation of funds between administration, programs, fundraising, etc. We recommend using Guidestar to review the organization’s 990 provide sufficient data for an initial screening, enabling donors with a good look at financial performance.

Finance & Fund Development

Non-profits have an obligation to act as responsible stewards in managing their financial resources. This includes compliance with financial requirements, sound accounting principles, and fiscal responsibilities. Since non-profits act as the intermediary between donors and beneficiaries, they have an ethical obligation to ensure proper handling of funds to carry out their missions.

Governance

A non-profit’s leadership, represented by its staff and board of directors is responsible for defining the organization’s mission and for providing overall leadership and strategic direction to the organization. Strong boards strive to ensure that their organizations have adequate resources, provide direction for the executive director and key staff and, evaluate their own effectiveness as governing bodies.

Human Resources

The ability of an organization to make effective use of the energy, time and talents of its employees and volunteers is essential to accomplish the organization’s mission. Exercising fair and equitable practices that attract and retain qualified volunteers and employees is just one best practice. Nonprofits have an obligation to adhere to all applicable employment laws and to provide a safe and productive work environment.

Public Information

Non-profits that provide information to prospective donors and other constituents promote informed and responsible philanthropy. This works to their advantage as donors are better able to make decisions when they can learn a nonprofit’s purpose, who governs it, how it manages its financial resources, whom the nonprofit serves, and what progress it has made toward achieving its mission.

Ideally, donors placing their “investments” with organizations are doing so through strong existing relationships. However, whether donors are already engaged with these organizations or have yet to meet their leaders, taking an in-depth look at these five areas will help solidify the receipt, usage, distribution, and recognition of financial contributions.

 

 

Seven tips for fundraising success

 

Raising funds for charitable organizations can be difficult; certainly time-consuming. It’s a patient process, requiring considerable research, planning, and organization. The word “development” is a perfect fit to the process an organization goes through to generate a meaningful contribution.

When it comes to raising funds for your organizations, here’s a handful of tips to consider adding to your overall fund development strategy. They have represented the centerpiece of our success. They’re not listed in any specific order, but you’ll quickly recognize where and how they fit in your strategy.
   
Identify strengths and weaknesses

Understand the organization – from operations to personnel to policies to financial management. Recognize the causes and implement solutions to each. Be sure to dot every “I” and cross every “t”.

Offer innovative giving

The one constant between most non-profit organizations is the ability to accept cash contributions. Every donor knows this. However, savvy donors (charitable investors) seek greater information, transparency, accountability, and results from their contributions. A strong percentage of them seek unique and innovative giving methods.

Create solicitation strategies

Know your constituents. An engaged leader is a gem and, as nonprofit leaders, it’s our obligation to strive for their full potential. One great way to really get to know supporters is to design solicitation (or engagement) strategies for each. Start by creating a Prospect/Donor Profile for each, used to document their interest, involvement, willingness, and capability. Mapping a solicitation strategy will force you to be strategic about cultivating each constituent’s involvement. This one act involves and is influenced by the other six tips offered here.

Engage constituents

From prospect identification to board leadership to donor stewardship, your benefactors are your organization’s greatest vehicles of success. Engage them through key steps of the fund development process. You’ll be amazed at their ideas, insight, and perseverance.

Generate active awareness

Tell your story to the world. Shout it regularly through local media and through your social media avenues. Be sure you focus on strengths and opportunities and that any weaknesses are addressed. Distribute clear messages and keep your messaging timely. Encourage staff, volunteers, and donors to share the messages through personal, personable, and electronic means.

Network

It’s a seven-letter word that, for many non-profit leaders, is more like a four-letter word – work. There’s no better way to prospect new supporters, whether they’re future volunteer or donor leaders. It involves stepping out of your routine, forces you to fine-tune your 30-second elevator speech, and smile even if you’re having a difficult day. Ask any business leader, networking produces results. Get out there and make friends and share your organization’s story, needs, and opportunities.

Steward donors

Perhaps the most detrimental cause of recent organizational failure might not have been solely the economic crash. Is your organization at fault for not properly recognizing donations and, more importantly, developing strong relationships with its donors? Stewarding donors strengthens the lifeblood of non-profit organizations. Pick up the phone, send an email, direct a tweet, say hello in the store, high-five at a ballgame, and send a card. These are the little ways that magnify the “engage constituents” tip into truly rewarding alliances. Make each donor feel as if he/she is in the middle of the game.

 

Perhaps one that should be listed is “have fun”…development and non-profit leadership should be exciting, rewarding, meaningful, challenging, and fun. Make the most of it!

 

Amazing community opportunities in the Old Pueblo

Summer has been extremely busy for the NPcatalyst team. Rather than spend the warm months surfing waves in the Pacific or backpacking along the Tahoe Rim Trail, we’ve been serving clients and connecting with corporate and charitable leaders across the country.

This past weekend was spent in Tucson, where we met with numerous non-profit officials, social entrepreneurs, and new strategic partners. Here’s a brief list of our new friends:

  • Beads of Courage – an incredible organization which distributes beads to children being treated for cancer throughout the world.
  • TreeHouse Farm – an organization which provides an unforgettable experience for children recovering from cancer treatment, serious burns, and congenital heart issues.
  • The Haven – extraordinary organization which provides substance abuse treatment and housing for men and women.
  • Arizona Oncology Foundation – a new organization which provides support programs for cancer patients and survivors.
  • One-on-One Mentoring – an organization which matchs caring adults with at-risk youth.
  • Pima Prevention Partnership – provides practical solutions to address both individual and community problems, particularly substance abuse related.

They were all introduced to our services, particularly our online gifting tool, GiftingWishes, and our BoardCheck assessment resource.

Saturday was spent in a retreat with one of our new strategic partners. This soon-to-be-launched company will provide job recruitment, leadership development, and career development opportunities to both college students and employers. Much more to follow soon.

It was just another amazing weekend. We hope it leads to many opportunities to continue helping enhance the philanthropic culture in the Old Pueblo. Plus, we may have even landed a new job for a Tucson resident!

Thank you, Tucson, for your hospitality, heat, and spectacular sunsets!

HealthCheck rating tool gathering attention

 

The charity rating and best practice tool, created by NPcatalyst this past January, is becoming increasingly popular with non-profit donors, volunteers, and job-seekers.

The tool was designed to address two distinct, yet critical needs. First, it’s designed to rate charities in five management and performance areas, giving organizations an objective instrument from which to guide their goals and strategies. Second, it’s used as a research mechanism, providing donors with “insider” information, which they can’t immediately or easily find online or through non-profit manuals.

“Launching a new product in a tough industry, especially a product which we created, has been both exciting and difficult,” says Pete Parker, NPcatalyst’s managing partner. It’s taken a considerable effort to educate non-profit organizations as well as business, community, and philanthropic leaders to adapt this innovative tool. “I wanted to create a tool which gives donors a true and in-depth view of non-profit organizations, enabling them to make thought out and well-researched donation decisions.”

The HealthCheck tool analyzes and applies a rating score to organizations in five different operational areas. NPcatalyst publicizes the scores on profile pages create for each charity. “To promote the HealthCheck tool, I’ve been screening the financial efficiencies for organizations located in the three locations where we’re seeing the heaviest traffic of donors and leaders,” says Parker. To date, 200 organizations have been screened and featured on the NPcatalyst website.

As a result of social media marketing, professional networking, and personal connections, visits to the NPcatalyst website have tripled in recent months. “What’s exciting is that our non-profit profile pages are seeing the greatest growth…and we put very little effort into marketing the pages”, according to Parker. The profile page of the first HealthCheck client, Sierra Nevada Journeys, has seen a 205% increase in views in the last month. “My hope, and the goal of this thing, is that Jonathan (SNJ’s executive director) tells me that they’re seeing an equally impressive spike in contributions.”

The HealthCheck tool is available to all non-profit organizations with an active 501(c)3 status. While the financial efficiencies of each may be screened due to public information found online, organizations seeking the full rating and tailored best practices guide will be charged a fee. “I wish we could offer HealthCheck at no cost, but we run a business to help strengthen our clients”, says Parker. “There’s a great deal we offer in benefits, plus we’re happy to work with businesses and foundations looking to underwrite the fees.”

For more information about NPcatalyst or its HealthCheck tool, log onto www.NPcatalyst.com, email info@NPcatalyst.com, or call 775-333-9444.

Tucson charities added to ratings list

A handful of Tucson-based community-benefit organizations have been added to our charity ratings list.

Because of NPcatalyst’s connection to and long-time interest in Tucson, we have begun to screen local organizations and add them to our HealthCheck charity ratings list. The intent is to provide valuable “insider” and research-based information to potential donors, volunteers, and job-seekers, as they make their charitable decisions.

Thirteen of the initial 16 organizations placed on the ratings list have received an initial “efficiency” rating. The rating is a scoring of the organization’s finances as found in its most recent Form 990. Ratings range from Fair to Ideal. These organizations, and all other active 501(c)3 organizations are invited to participate in a complete HealthCheck process, where an in-depth analysis is conducted in the areas of Finance & Fund Development, Governance, Human Resources, and Public Information. The organization will receive numerical scores in each category, as well as an overall score. In addition, a best practices guide will be developed, providing suggestions for improvement in each of the categories.

Our HealthCheck process is very objective and has become an outstanding resource for private foundations, local businesses, and philanthropic leaders as they make their charitable decisions.

If there’s an organization missing from this list, drop a line to info@npcatalyst.com or 775-333-9444 and we’ll add it to our growing list of organizations to screen.

Bear Down!!!

HealthCheck best practice – understanding financial statements

Do you and your fellow board members know how to read and understand a non-profit organization’s financial statements?

You should, as it’s a very important function of board leadership. To help clarify why it’s so important, just Google “board financials” or “understanding board financials”. Among the many links, you’ll likely find the following.

Steven Berger, in his Learning to Read Financial Statements, share the following. 

Financial statements summarize an organization’s financial position – at a given moment in time as well as over longer periods (monthly, year-to-date, quarterly, annually). They should reflect any variances between the actual operating results and the budgeted goals that were previously approved by the board.

All board members need to have a basic understanding of the most important elements of a financial statement. They need to know why these elements are important and what actions they should take if these elements are inconsistent with board wishes or out of compliance with generally accepted accounting standards.

We also found a set of questions, as created by Tom McLaughlin, very enlightening. Here are his 20 QUESTIONS BOARD MEMBERS SHOULD ASK, as found on the Board Source website. 

Board members can’t provide financial oversight if they don’t know what to look for. The following questions address some of the most important issues board members should raise when reviewing the organization’s finances.

FINANCIAL PLANNING

1. Is our financial plan consistent with our strategic plan?

SUFFICIENT AVAILABLE CASH

2. Is our cash flow projected to be adequate?

3. Are our cash-flow projections reasonable, objective, and not overly optimistic?

SATISFACTORY RESERVES

4. Do we have sufficient reserves?

5. Has the board adopted a formal policy for the establishment of reserves?

MEETING THE BUDGET

6. Are we regularly comparing our financial activity with what we have budgeted?

7. What procedures do we use to make sure that the differences between what was budgeted and what actually happened are being appropriately addressed?

PROPRIETY OF EXPENDITURES

8. Does the board provide oversight of contractual agreements to ensure that the organization’s exempt status will not be questioned or impaired?

9. Does the board provide for internal controls over expenditures?

10. Are we fulfilling our tax-exempt purpose as granted by the IRS?

INTERNAL CONTROLS

11. Do we have the appropriate checks and balances necessary to prevent errors, fraud, and abuse?

12. Are we alert to the possibility of fraud within our organization and are we taking safeguards to try to prevent fraudulent activities?

EXTERNAL AUDITS

13. Do we have an external audit?

14. Does our annual audit have an unqualified (“clean”) opinion? If not, why not, and what is being done about it?

FINANCIAL DOCUMENTS

15. Is our financial staff providing us with accurate and timely financial statements that allow us to understand the financial state of the organization?

16. Do we regularly review the IRS Form 990? Does it accurately represent our organization?

SIGNS OF FINANCIAL DISTRESS

17. Are our key sources of income rising or falling? If they are falling, what are we doing about it?

18. Are our key expenses, especially salaries and benefits, under control?

MAKING INVESTMENTS

19. When was the last time our investment policy was reviewed?

20. Are we satisfied with the performance of our investments, given the level of risk appropriate for these funds?

    

NPcatalyst designed its HealthCheck tool, which also designs a best practices solutions guide for participating organizations, to help strengthen charities. Many topics, like reading financial statements, are analyzed with HealthCheck. Click here to learn more and register for HealthCheck.

NPcatalyst designing year-end giving campaign

NPcatalyst has designed a campaign to raise funds for interested organizations through a unique year-end giving initiative. The campaign will remind and drive support from community residents, private foundations, and business leaders as they make contributions to organizations before the close of the calendar year.

Non-profit organizations (regardless of size, scope, sector, or location) are invited to participate in the innovative campaign, but need to enlist with NPcatalyst prior to November 1st. Through a small participation fee, each organization will receive:

  • an organizational assessment (charity rating) and best practices solutions guide;
  • invitation to participate in up to three fundraising-driven webinar training sessions;
  • inclusion in NPcatalyst’s social media and traditional media messaging;
  • direct positioning with NPcatalyst’s expanding roster of corporate, foundation, and philanthropic influencers;
  • an online profile, featured on the NPcatalyst website; and,
  • a special contributions-tailored profile on a soon-to-be-announced Campaign website.

Signing up well in advance enables the participating organizations to address areas deemed as weak or needing improvement, based on the charity rating score determined by NPcatalyst’s HealthCheck tool. It’s an organization assessment (or charity rating) tool, which analyzes each organization in five different categories, then provides a best practices solutions guide for improvement in each area. Click the following link – www.npcatalyst.com/healthcheck/ – and learn more about the HealthCheck tool which the NPcatalyst team created. Best of all, it’s a great revenue-generating tool. In fact, here’s a testimonial:
“What I’m coming to understand about the value of this HealthCheck process is not necessarily the rating itself (though that’s important), but the best-practices it ends up prompting. To that end NPcatalyst is doing great work ensuring that we’re adhering to those best practices.” – Jonathan Mueller, executive director of Sierra Nevada Journeys

NPcatalyst was founded to provide philanthropic solutions to both donors and the charitable organizations they support. Pete Parker, managing partner of the firm, has helped non-profit organizations raise over $30,000,000 through appealing and innovative annual, major, capital, and online giving campaigns. Most recently, the firm create a corporate engagement campaign which connected community residents in throughout northern Nevada with over 15,000 volunteer opportunities.

The year-end giving campaign is an opportunity non-profit organizations should seriously consider. To sweeten the invitation, NPcatalyst is offering the charity rating, best practices guide, public relations messaging, and year-end fundraising campaign at $375, a heavily-discounted rate from the $450 base price. With a targeted fundraising goal of $5,000 per organization, it’s an incredible opportunity. Taking advantage of this two-week offer, which ends on August 31st, requires each organization to send an email to info@npcatalyst.com or call 775-333-9444.

      

Areas to consider when considering funding, community collaborations

As a company, NPcatalyst strives to enhance the impact and visibility of philanthropy. We work with donors (primarily businesses) to create greater connections with their communities, where they contribute time and voluntary leadership. We introduce them to opportunities and community-benefit organizations (and their leaders), thus guiding them to successful community giving initiatives. We also work with community organizations to help create greater awareness, donor relations, development (fundraising) strategies, and recruit new donors and leaders. It’s an innovative approach to building community leadership, pride, and growth.

In daily conversations with donor and non-profit organizations, we frequently receive two questions. First, donors ask how and where the should contribute their money. At the same time, charities ask how they can raise more money from existing and new donors. The answers to both questions have commonalities, such understanding community needs and how donors and charities work together to meet them.

The strategies NPcatalyst creates for both donors and charities involve transparency and greater knowledge of funding and the organizations which receive them. It’s important, for many reasons, to have a keen understanding of how the organization is meeting community needs, how the organization is managing and performing, and precisely how the funds are allocated.

Providing this type of information to donors and, at the same time, leveraging it for greater public awareness, is why NPcatalyst created its HealthCheck system. Through an review of the Form 990 and answers from a 60-question survey, organizations receive a ratings analysis and a best practices tool in five areas. Beyond its ability to promote an organization’s strength and raise funds by ensuring their proper usage, it’s a great way to build upon the weak areas by implementing the recommended best practices. Here’s a close look at the five areas being analyzed.

Data & Efficiency

HealthCheck utilizes the IRS Forms 990 to analyze a non-profit organization’s financial performance in key performance categories. Upon analyzing performance categories, we assign a score as it relates to the organization’s efficiency, capacity, and overall financial health.

Finance & Fund Development

Non-profits have an obligation to act as responsible stewards in managing their financial resources. They must comply with all legal financial requirements and adhere to sound accounting principles that produce reliable financial information, ensure fiscal responsibility and build public trust. In addition, non-profits act as the intermediary between donors and beneficiaries and have an ethical obligation to ensure proper handling of funds to carry out their missions. Questions include:

  • The percentage of board members who make personal contributions.
  • The organization complies with all federal, state and local laws concerning fundraising practices.
  • The percentage of $250+ donors who received a written acknowledgement in the previous calendar year.

Governance

A non-profit’s leadership, represented by its staff and board of directors is responsible for defining the organization’s mission and for providing overall leadership and strategic direction to the organization. Each non-profit board should: ensure that the organization has adequate resources to carry out its mission and provide direction for the executive director and key staff; and evaluate its own effectiveness as a governing body and as representatives of the community in upholding the public interest served by the organization. Questions include:

  • The average percentage of board attendance at board meetings.
  • The organization pursues or is open to new strategic alliances (or collaborative partnerships) to achieve organizational goals.
  • The percentage of board members who have participated in an official board orientation process.

Human Resources

The ability of an organization to make effective use of the energy, time and talents of its employees and volunteers is essential to accomplish the organization’s mission.

Non-profit organizations should place a high priority on exercising fair and equitable practices that attract and retain qualified volunteers and employees. Nonprofits have an obligation to adhere to all applicable employment laws and to provide a safe and productive work environment. Questions include:

  • Employees receive formal performance evaluations.
  • The organization complies with all federal, state and local employment laws when hiring and employing personnel, including withholding and payment of payroll taxes.
  • The percentage of the organization’s employment positions which utilize a clear, current and written job description.

Public Information

Non-profits that provide information to prospective donors and other constituents promote informed and responsible philanthropy. Donors are better able to make decisions when they can learn a nonprofit’s purpose, who governs it, how it manages its financial resources, whom the nonprofit serves, and what progress it has made toward achieving its mission. Questions include:

  • The organization conducts a financial audit.
  • The organization conducts a constituent satisfaction survey.
  • The organization provides board meeting minutes and financials to those who request them.

The more satisfaction donors feel about the contributions they make to community-benefit organizations, the more likely the community’s needs will be met. At the same time, the charities which address those needs will be strengthened, so that others may engage as donors and volunteers. NPcatalyst’s HealthCheck is an outstanding resource  used when building collaborative partnerships between donors and charities.

For more information about philanthropy, collaborative partnerships, and charity research, contact NPcatalyst at http://www.npcatalyst.com/, info@npcatalyst.com or 775-333-9444.

Sierra Nevada Journeys earns “strong” charity rating

    

Sierra Nevada Journeys, a local non-profit organization providing experiential learning opportunities to children, recently received a “strong” charity score from NPcatalyst. The score recognizes the organization as a “strong” candidate for charitable support, based on its scoring in five areas of operational performance.

NPcatalyst, a Reno-based philanthropic solutions company, rates non-profit organizations using an elaborate analysis of operational efficiencies and procedures. The rating system addresses five key management indicators to derive a true analysis of the organization’s effectiveness.

“We’re proud to award Sierra Nevada Journeys, our most recent HealthCheck participant, with a ‘strong’ rating. The locally-based organization was very interested in receiving a charity rating, as a means of improving performance and leveraging it for increased support.” says Pete Parker, NPcatalyst’s managing partner.

Initially unsure about how the HealthCheck tool would impact his organization, Jonathan Mueller, SNJ’s executive director soon realized the long-lasting value. “What I’m coming to understand about the value of this Healthcheck process is not necessarily the rating itself (though that’s important), but the best-practices it ends up prompting. To that end NPCatalyst is doing great work ensuring that we’re adhering to those best practices.”

A profile illustrating the charity rating can be found on the NPcatalyst website, located at www.NPcatalyst.com. For additional information on the HealthCheck program, contact NPcatalyst at 775-333-9444.

How to protect your charitable donation

 

Whether it boldly hits national news or barely hits the local press, stories of improper use of donated funds is never good. Non-profit or “community-benefit” organizations exist to meet community needs while, at the same time, enhance quality of life.  Unfortunately, these situations continue to occur and these stories circulate throughout the media.

So, how can donors prevent their funds from being improperly used or allocated?

It’s simple…thorough knowledge of the organization you’re supporting should do the trick. This can be done through different avenues of organization understanding. The best possible way is by creating a direct relationship with the organization by calling, volunteering, and/or attending events.

If developing a personal relationship isn’t an option, then check to see if the organization has been rated on its finances, management, or performance. A non-profit organization named Charity Navigator is a good resource as they rate select organizations (those with $500,000+ budgets) based on financial efficiencies.

NPcatalyst, also rates charities; but, scoring is taken steps further. The belief is that management and leadership are just as important as financial oversight. Through their HealthCheck tool, the company scores charitable organizations of all budget sizes, locations, and service areas on five areas:

  • Data & Efficiency
  • Finance & Fund Development
  • Governance
  • Human Resources
  • Public Information

Transparency is key. Scoring in multiple areas is to paint a clear picture of each organization’s best practices.

Regardless of which resource you use, your best bet is to have a strong understanding of the charity you’re about to support to ensure that your hard-earned donation will be put to the best possible, or your pre-determined, use.

For more information or to learn more about a particular organization contact NPcatalyst at 775-333-9444 or info@npcatalyst.com.