Third and Fourth Sectors

The People Pages: Develop Your Nonprofit Idea

from The People Pages: Resources for Social Change (c) 2003 The Fruition Coalition

It makes sense to start a new organization if:

  • The community, including program participants, volunteers, and the general public, demonstrates strong support for the organization in its preliminary stages
  • You (as a group) are effective programmatically and administratively
  • You have or will be able to develop the resources necessary to operate and flourish now and into the future
  • You have distinctive and extraordinary professional expertise or you own and are willing to share intellectual property for the financial benefit of the organization
  • You do not seek ownership of the organization’s resources or complete control of the organization’s management and operations

If you are confident that your nonprofit will fly, make sure you…

  1. Don’t replicate existing programs.  Find a way to make your organization distinctive and unique in its’ programs and services, population served, and/or methodology.
  2. Educate yourself.  Learn all you can about nonprofit organizations, management, laws and regulations, fundraising, and your program area.  You can do this by reading books, attending workshops and seminars, and networking.
  3. Enlist the help of others.  Start talking to people about your idea.  Form a Planning Committee composed of community members, people working in your field of interest, and business, law, financial, and human services professionals. Meet regularly to share ideas and map out a start-up plan.  Some of these people may continue to serve on your Board of Directors if you decide to incorporate.
  4. Ensure that your commitment is genuine and lasting before going to the next level. Starting a new organization is an incredibly challenging and time consuming process.  You will plant many seeds now that may take months or even years to bloom.

Before embarking on your new venture, share your vision with others and gather information to ensure that your project is feasible and sustainable.  Here are some ideas:

  1. Research similar programs.  Find out if any other organizations are doing similar work in your area.  To do this, you can call your local United Way, do a search on, or look in local phone or guidebooks.  Set up a meeting to learn more about their mission and programs.   This will help you understand more about your community, its residents, and the programs and services that are already in place.  In addition, there may be a way that you can collaborate together to better serve your common constituents.
  2. Ask the people what they want.  Interview the people who would participate in your activities to see what their needs and desires are.  Talk to local small business owners and residents in your neighborhood to introduce your idea and gauge their level of interest.
  3. Seek the advice of professionals.  Talk to a program officer at a local foundation.  They are very familiar with the organizations in your community and can provide invaluable insight into unmet needs.  Your local legislators or their office managers are also great sources of information.   Talk to professionals in your industry and involve hem in your planning process.
20 Questions, Leadership, Third and Fourth Sectors

20 Questions: Starting a Job as an Executive Director

  1. What will my legacy be with this organization?
  2. How will I have a positive local and global impact through my work with this organization?
  3. What are the strategic priorities of the organization?
  4. What is the complete and uncensored history of the organization?
  5. What are the community’s dreams for the future?
  6. How will I strengthen the organization’s relationships and open up new relationships?
  7. How is the board engaged in the work of the organization?
  8. How is the community engaged in the work of the organization?
  9. What do the staff, board, and volunteers need from me to be successful?
  10. What can I do to strengthen the organization’s processes?
  11. How will I promote the flow of information and ideas?
  12. How will I strengthen the organization’s fiscal position?
  13. How can I share my unique gifts and skills through this organization?
  14. How can I help others – staff, volunteers, program participants — make the most of their unique gifts and skills?
  15. What does our organization do well? How has it been successful in the past?
  16. What are our organization’s core competencies?
  17. What does our organization not do well? How has it be challenged in the past?
  18. What needs to be changed and what needs to be maintained or enhanced?
  19. Is the organization’s structure adequate to support the needs of the organization?
  20. What additional resources are needed to achieve the organization’s goals?
Third and Fourth Sectors

The People Pages: Marketing Basics

From The People Pages: Resources for Social Change (c) 2003 The Fruition Coalition

Marketing is the art of bringing like-minded people together to achieve common goals.  In nonprofit organizations, these people include program participants, donors, and volunteers.

Segmentation is the process of grouping people according to their demographics, interests, attitudes, motivation, social affiliations, and/or lifestyle.  For instance, you might segment your donors by amount/frequency of gifts, income/wealth, level of involvement in your organization, or age.  You could segment volunteers by type of service or educational background.  Segmentation will help you develop appropriate marketing strategies and tactics that appeal to and have meaning for your target markets, resulting in increased participation and contributions.

A target market is a segmented group of people that desires or needs your products and services.  Niche marketing satisfies an unmet need in the community in a unique way.

The Marketing Mix

Place is where your target market experiences, purchases, or consumes your product or service.

Product is the actual or perceived (‘image’) product or service that is offered to the public.

Price is the amount of time and money required to experience the product or service.

Promotion is the process of educating and exciting your target market about your products and services through advertising, public relations, sales, and promotions.

Marketing Channels are the personal or impersonal spaces that connect your organization with your target market.  Channels include your office, the Internet, email, mail, meetings, phone, stores, events, and publications.

Marketing Research can help you identify and gain a deeper understanding of characteristics of your target markets, community needs, competitive programs, and opportunities for innovation.  It can help you identify and investigate problems, assess a program’s impact, or measure the effectiveness of a campaign.  Primary research is original research designed, executed, tabulated, and analyzed for the first time.  Examples include surveys, interviews, experiments, observation, and focus groups.  Secondary research is already in existence; examples include census data or health statistics.  Qualitative data is descriptive in nature while quantitative data is concrete and can be interpreted as a number.

Use the Target Market Analysis Worksheet on the next page to take a closer look at the people who support your organization so that you can better understand and serve their needs.  Complete one sheet for donors, one for volunteers, and another for program participants.  Derive at least two distinct target market groups for each category.  Define each target market’s characteristics.  Develop a marketing mix that would be appropriate for each target market.

Marketing Planning is the process of analyzing your marketing program, setting goals for each target market, and developing an action plan to meet those goals.   Use the Marketing Planning Worksheet to put your marketing goals in writing and construct marketing strategies.

Third and Fourth Sectors

The People Pages: Fundraising Planning

from The People Pages: Resources for Social Change (c) 2003 The Fruition Coalition

The fundraising planning process ensures that your organization has substantial funding to meet its program and service goals.  A fundraising plan should be developed and put in writing at least once a year.  Because actual funding can vary greatly from that which was planned, especially in the case of grants, it is important to constantly review and revise the fundraising plan.  The plan should be developed by the Board of Directors under the direction of the Executive Director with input from program, fundraising, and administrative staff.

  • Review and recommit to your mission and vision.  All fundraising activity should support and further your organization’s vision and mission.
  • Plan and develop programs.  Set measurable and realistic service goals for each program.  Ask program staff for input regarding successes and challenges, as well as ideas for implementing change.
  • Create a budget for each program and an operational budget.  Identify how much money will have to be raised this year.
  • Conduct a situational analysis of your fundraising program.  Analyze each fundraising area, including grants, special events, membership, annual campaign, and planned giving.  List each area’s internal strengths and weaknesses and external opportunities and threats.  Create a vision of where you would like each fundraising area to be at the end of next year.
  • Set fundraising goals.  Set financial goals for each fundraising area.  Classify donors according to their ability and likelihood to give and estimate each group’s total donations. Break down each fundraising goal into tasks and assign tasks to volunteers and staff.  Communicate responsibilities and expectations.  Make sure you will have enough cash on hand to implement the fundraising plan.
  • Assess existing donors. Determine what ways existing donors should be asked to give and participate in your organization’s activities this year.  Review your database and make sure that mailing, phone, and email lists are accurate and up to date.  Review written files of major donors.
  • Research new opportunities for funding.  Identify individuals, corporations, businesses, and foundations that will be approached for funding in the coming year.
  • Match potential funders with financial goals.  Decide how each program will be funded.   Determine how administrative expenses will be paid for.
  • Implement your fundraising plan.  Design and develop promotional materials, establish points of contact, and educate new and existing donors about your organization, your accomplishments, and your goals.
  •  Monitor the results of the plan.  Follow up with staff to make sure tasks are completed.  Compare the actual results of fundraising campaigns to the projected income. Revise the plan as needed.
Third and Fourth Sectors

The People Pages: Elements of a Grant Proposal

from The People Pages: Resources for Social Change (c) 2003 The Fruition Coalition

  1. Cover Letter – The cover letter should be one page long.  It introduces your organization and project to the foundation.  It should state the amount you are requesting and the specific purpose of the proposal.
  1. Introduction or Executive Summary – This is a brief summary of the entire proposal.  State the amount of funds requested.  Briefly describe the program that funds are being requested for and illustrate the impact that the program will have in your organization and in the community.
  1. Organizational Background – This section should express your organizational capacity and competency.  State your mission and provide an overview of programs and services.  Briefly outline your history and show how your organization has grown into its present status.  Foundation grants are an investment in the community and this section needs to demonstrate that your organization is capable of managing people, programs, and finances responsibly.
  1. Needs Assessment – Present the needs of your community and the people who will benefit from your program or service.  Use primary and/or secondary research to support these needs and always site sources of statistical data.  Use both quantitative and qualitative information.  Explain why these needs are significant locally and appeal to universally understood values.
  1. Action Plan/Methodology – Explain specifically how your program or service will fill community needs.  State program goals and delineate the actions that will be taken to achieve those goals.  Provide an implementation schedule.
  1. Evaluation – Describe how your organization will determine whether or not goals are achieved.  Explain the methods that will be used to measure each of the goals stated in the action plan/methodology session.  Discuss how the outcomes you measure will be used as a learning tool that helps your organization better plan and deliver programs.
  1. Conclusion – Summarize your funding request, your goals, and the impact that this project will have.  Describe how the program will be funded when this grant is completed.
  1. Appendices may include:
  • IRS determination letter
  • Charitable solicitation letter
  • Board list
  • Résumés of key staff
  • Program budget
  • Organizational budget
  • Financial statements and/or audit
  •  990 (Tax Return)
  •  Press clippings
  •  Publications (i.e. newsletter) only if requested
Third and Fourth Sectors

The People Pages: Planning to Achieve Your Goals

from The People Pages: Resources for Social Change (c) 2003 The Fruition Coalition

Goals are used to guide an organization’s activities and gauge its progress toward its vision and mission.  Goal setting is an integral part of every planning process.  They should be set and monitored in just about every area of operations including programs and services, fundraising, human resources, and finances.

The steps that are taken in the goal setting process are:

  1. Reaffirm your vision and mission statements.
  2. Assess the internal and external situation and gain an understanding of how this affects your organization’s work.
  3. Review your recent activities and decide what needs to be changed.  Make a list of these things and categorize them into operational areas.
  4. For each thing that needs to be changed, set measurable and realistic goals.  Every goal should be measurable so that you can determine whether or not it has been achieved.
  5. Break each goal down into an action plan. An action plan lists tasks that must be accomplished in order for the goal to be achieved.  Assign each task to a specific person.  Figure out how much it will cost and how long it will take.
  6. If goals are partially or completely not achieved, set new goals that reflect what you have learned and what has changed internally and externally since the original goal was set.

Goals can be quantified in a number of ways, including:

    • Number of participants
    • Number of sessions completed
    • Increase or decrease in spending or income
    • Time to complete projects or phases of projects
    • Change in behavior, attitudes, or opinion
Third and Fourth Sectors

The People Pages: Proposal Writing Tips

from The People Pages: Resources for Social Change (c) 2003 The Fruition Coalition

Before starting your proposal…

  1. Develop a relationship with the funder.  Call the foundation and pitch your idea before preparing a proposal.  You may get important feedback about their priorities and clarify any misunderstandings.
  2. Read the guidelines very carefully.  Follow the format they request.  If they have an application form, get a copy well ahead of time.  Make sure you have time to prepare and deliver your proposal before the deadline.
  3. Make sure your project fits in with the grantmaker’s goals.  Research grants that have been distributed in the past and compare those projects to yours.
  4. Determine the proper amount to ask for.  Match grant funds with other sources of income and make sure your asking amount is within the foundation’s normal range.
  5. Make sure you are not ‘reinventing the wheel’.  Investigate other programs in your community and be prepared to differentiate your program’s methodology, geographical area served, and/or population served.
  6. Demonstrate collaboration and/or efficiency.  Be prepared to discuss ways that your organization has partnered with other community organizations through joint efforts or by sharing information/replicating programs.  Show that your organization has taken steps to reduce costs and streamline activities.
  7. Have a backup plan if the grant money is not received.  This is one reason why it’s important to diversify your income.  Don’t depend on one grant to support a program.  Figure out alternative ways to implement the program with limited funds and/or identify and pursue additional sources of revenue.

After completing your grant proposal, make sure…

  1. The spelling and grammar are correct.  Have a second person proofread the proposal. 
  2. The envelope and cover letter are addressed to a particular person.
  3. The proposal is interesting to read and full of information, yet concise. Use simple language to tell a compelling story about your organization and programs.
  4. All attachments are included and in order.  Refer to the foundation’s guidelines for a list of required attachments.  Don’t send extra materials that aren’t specifically requested.
  5. The appropriate number of copies are enclosed.

After getting funded….

  1. Thank the grantor.  Immediately send an acknowledgement in writing.
  2. Spend funds according to your agreement.  You are ethically obligated to do what you spelled out in your grant proposal.  If something major changes, call the foundation and discuss the situation.
  3. Report the actual outcomes of the grant.  This helps foundations learn more about the needs of nonprofit organizations and the communities they serve.
Third and Fourth Sectors

The People Pages: Nonprofit Basics

from The People Pages: Resources for Social Change (c) 2003 The Fruition Coalition

Nonprofit organizations (are) …

  1. Usually formed by a group of people organized to solve a problem or fill a need
  2. Benefit the public at large or its members
  3. Business entities that are usually incorporated in their state of origin
  4. Not owned by founders or investors and therefore excess earnings are not distributed in the form of dividends
  5. Allowed to have a surplus at the end of the year
  6. Reinvest excess income into programs and services
  7. Assigned a tax code by the IRS; charitable organizations are known as 501(c)3 organizations
  8. Exempt from paying federal income tax
  9. Exempt from paying state sales tax
  10. Able to sell products and charge participants for services
  11. May be subject to Unrelated Business Income Tax
  12. Either public charities supported broadly by the community or private foundations supported by one person or a cohesive group
  13. May or may not have members who elect officers
  14. Governed by a volunteer board of directors
  15. Usually able to accept charitable donations for which the donor can take a tax deduction
  16. Just as complex and challenging to manage as for-profit organizations
  17. Responsible for and accountable to the community served
  18. Staffed by professionally competent people
  19. Supported by volunteers who perform a variety of tasks
  20. Expected to operate efficiently and effectively ‘like a business’
20 Questions, Third and Fourth Sectors

20 Questions: Starting a Nonprofit

  1. What specific needs will this organization address?
  2. How has the need for this organization been discovered and documented?
  3. How will specific community needs be identified and explored?
  4. What is my motivation for starting this organization?
  5. How does this organization connect with my personal and professional goals?
  6. How does this organization fit in with the programs and services offered by other organizations?
  7. What can we learn from other organizations who are doing similar work?
  8. What resources (money, people, facilities, technology, etc.) are needed to start this organization?
  9. Who will be involved in the development of this organization?
  10. How will the community be engaged in the work of the organization?
  11. How will the work of this organization be sustained over time?
  12. How will this organization help the community served realize its dreams?
  13. What is the organization’s vision and mission?
  14. How will the strategic direction for the organization be developed?
  15. What are the specific goals of this organization?
  16. What are the legal requirements for starting an organization in my state and municipality?
  17. How will we let other people know about this organization through every stage of development?
  18. Who will benefit from this organization?
  19. How will this organization enrich the community as a whole?
  20. What best practices will guide the development of this organization?
Third and Fourth Sectors

The People Pages: Types of Charitable Gifts

from The People Pages: Resources for Social Change (c) 2003 The Fruition Coalition

Types of donations, or charitable gifts, include:

  • Liquid assets –may be in the form of cash, check, money order, or securities
  • Grants – these are foundation gifts that do not need to be repaid.  Types of grants include:
    • General Operating Support
    • Program Support for specific programs or projects
    • Seed Money for new programs or organizations
    • Capacity Building to develop organizational skills and resources
    • Capital to fund facilities and equipment purchase and improvement
    • Matching which match other funds raised by the organization
    • Challenge which are conditional on a certain amount of other funds being raise
  • Planned gifts –large gifts that transfer assets from an individual to an organization contingent on the donor’s death.  The most popular types of planned gifts are:
    • Bequests – an organization is named as a beneficiary in a will
    • Charitable Remainder Trusts – the donor makes a donation which is invested into an annuity; the donor gets an income stream as long as they are alive and upon their death the remainder is transferred to the organization
  • Real estate, artwork, or other valuable items
  • In kind donations – material goods that help the organization fulfill its mission
  • Volunteer time

Other sources of income for your organization might include:

  • Membership
  • Program Fees
  • Earned Income from the sale of goods or services

Remind your volunteers and donors about your organization’s material needs as part of developing a mutually beneficial relationship with them.  Incorporate opportunities for giving into all of your interactions and activities, including:

  • Annual giving campaign
  • One on one communications
  • Special events
  • Newsletters
  • Email newsletters and announcements
  • Website
  • Capital and other special campaigns