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AFP eWire Skill Builder Printable Version: May 5, 2009

Getting Familiar With the New Form 990  

Perlman & Perlman LLP, attorneys specializing in nonprofit law, have developed for AFP members a brief describing the new IRS Form 990, its new reporting requirements and tips on completing the form.

The law firm advises that new reporting requirements may impact how tax-exempt organizations track and disclose many of their activities. Beyond just a change in format, the revised Form 990 shows the IRS’s increased focus on the activities of nonprofits, rather than just their financial disclosures as in the past.

Download the article in PDF form in the Attachments section of the electronic version of this article.

Perlman & Perlman LLP, based in New York City, specializes in working with the philanthropic community, among other areas of legal practice at the local, state and federal level. Perlman & Perlman is AFP’s outside legal counsel. You can find the firm online at

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Funder Perspective: Ways to Build Stronger Ties With Foundations  

Sometimes for a foundation, making a grant to an organization is a lot like sending a child to college. What are they really doing with the large investment you’ve made? This week eWire spoke with two seasoned foundation leaders about what they are looking for in a grantmaker-grantee relationship. Often it’s as simple as picking up the phone.

Common to both interviews this week was the notion that when a grant is made the relationship is just beginning. Foundations have to show results, and so they want to see and hear about the tangible benefits to people. As with individual donors, this is an opportunity to turn cold, numeric progress reports into a hands-on experience of the good work of your organization. And when challenges arise, foundation leaders say it makes all the difference that they are among the first, not the last, to know.

“It really is an excellent time to be building that relationship with your current funders,” says Judith Margolin, vice president for planning and evaluation at The Foundation Center. “Unfortunately, we as fundraisers can be so concerned about getting the money that we ignore the relationship. The important part, so often ignored, is what happens after the grant is made.”

Follow Through

Frances Phillips, program director for the arts at the Haas Fund in San Francisco, agrees. “I have grantees who are very aggressive and thorough when it comes to submitting their grant applications, and I appreciate that,” she says. “But when it comes to final reports they are lackadaisical.” What is important to realize, she explains, is that the written narrative repots and financial reports that her foundation requires are key to the decision to award future grants. In other words, the foundation seeks good stewardship of their gift.

“Each of these grants is an investment in a kind of experiment into what works—and I am as interested in what happened as what an organization is proposing to do in the first place,” Phillips continues. “Yet so many people do not take advantage of the report as a critical fundraising tool.”

Margolin notes that foundations’ strong emphasis on monitoring progress comes from pressures placed on them. “I do think that fundraisers need to be aware that foundations are under enormous pressure to demonstrate to their own board that the money given away is being used effectively. The only way for them to do that is for organizations to submit thorough reports.”

The Tough Phone Call

Another important part of the funder-grantee relationship is keeping funders in the loop about hiccups and setbacks.

“If something goes wrong, then tell me—and tell me early,” says Phillips. “Even if things are yet unresolved, it’s better that I know. It makes a bad impression if I hear about it from someone else first. It can be just a five minute phone call explaining what is being done to take care of a problem that has arisen.”

“It’s the same advice that you might give someone who is in debt,” adds Phillips. “Better to let the bank know now and explore your options than to keep silent.”

Like any relationship, open communication is vital. Unfortunately, grantees are sometimes afraid to be honest and forthright about challenges they are facing for fear of losing funding, Margolin says. In those times it’s important to realize that the foundation has a stake in your success. “My basic advice is that at the end of the day, fundraising is still about people—even when you are dealing with foundations.”

More Tips

Do your homework before calling. “I’m always happy to talk about whether a project is a good fit and how to focus it,” says Phillips. “But so many people call out of the blue without focused and prepared questions.” Phillips says it is obvious to her when people have not gone to the website and read the information about the kinds of projects her foundation funds and its overall funding approach. It’s important to make sure phone calls make the best use of time for both parties, she explains.

Cultivation = Information.  Just as with phone calls, Phillips looks for grantees to make good use of time with face-to-face meetings and visits to the grant recipient organization. “Fundraisers are encouraged to cultivate relationships with people, and rightly so,” she says. “But people court me as though I am the wealthy person—a major gift donor. For me cultivation opportunities need to be informative and illustrate the program above all. What is most useful for me is meeting people to learn about the work they do, and ideally to meet the people who are being served by the funding. I am, as they are, a professional at what I am doing. Information, then, is much appreciated.”

Recognition counts. “Foundations like to be thanked.” Margolin says, recounting the wisdom of a foundation leader that has stuck with her. Recognize your funder publicly and mention them in meetings, she says. “People who enter this field want to make organizations better and so they deserved to be thanked, and appreciate being thanked, for what they do.”

Judith Margolin is vice president for planning and evaluation at the Foundation Center. She has devoted most of her career to foundations and philanthropy. She is the author of several books, including The Individual’s Guide to Grants and Financing a College Education and has served as editor of multiple editions of the Center’s monographs, including Foundation Fundamentals, Guide to Proposal Writing, and The Grantseeker’s Guide to Winning Proposals. 

Frances Phillips is program director for the arts and The Creative Work Fund at the Walter and Elise Haas Fund in San Francisco. She has worked at the Fund for 14 years. Phillips serves on the boards of the California Alliance for Arts Education, Community Initiatives, Grantmakers in the Arts, and Great Nonprofits; and she is co-editor of the Grantmakers in the Arts Reader. With her husband, Stan Hutton, she co-authored The Nonprofit Kit for Dummies—a new edition of which is forthcoming in December.

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Foundation Relations: Don't Let the Big Table Stand in Your Way  

By Derrick Feldmann

eWire contributing writer Derrick Feldmann shares his experiences working with nonprofits and foundations and offers some advice on how to build an authentic relationship, including some helpful do’s and don’ts.

Recently, I had the opportunity to visit a local family foundation on behalf of a client. As part of an assessment of the client’s relationships and its impact on the community, we were meeting with a number of corporations, foundations and individuals that support our client. In the course of those meetings, we were asking a series of questions about the connection between the organization and its funders. These questions ranged from, “How many times do you hear from the organization?” to “What are the conversations about?” 

During this particular meeting, the foundation’s head of grantmaking – who I’ll call “Paul” – made comments that spoke volumes about the foundation’s relationship with our client.

First, Paul described an event he had attended that was hosted by our client. At the event, several board members approached him to thank him for the recent grant. While Paul appreciated the gesture, he was troubled by the conversations. It was clear that the board members did not know the extent of the grant or, if they did, each of them had a different vision of its outcome.

As the conversation continued, Paul also mentioned meetings he had had with our client’s CEO and V.P. of Development. The meetings were nice enough, he said, but every time they came in, it seemed like there was this big division – a wedge if you will – between him and them. The conversations were superficial, never relating to the real work of the organization, its challenges, its current financial footing, etc. As they talked, Paul said, the conference table that separated them seemed to get bigger and bigger.

What did we see in these stories? A lot of what Paul felt: That the relationship between his foundation and our client was not one built on authenticity and trust. To Paul, it had begun to feel simply transactional.

So what kind of relationship should you have with foundations? 

To understand this, you first should put yourself in a grantmaker’s shoes. They’re inundated with requests – not only for money, but also for meetings, appointments and partnerships. They’re usually told so many “great” things about an organization that they have a hard time seeing the truth through the murky waters of self-promotion. Perhaps most importantly, foundation executives work first and foremost to meet expectations set forth by the original donors and board of directors. This means that they’re not trying to assess whether your organization is worthwhile – they assume it is. But they are trying to understand how your organization aligns with such expectations and whether it has the ability to achieve promised outcomes.

Now consider the following simple steps to deepen your relationships with foundations.

Communicate well

Remember, foundation executives receive more email and mail than you would ever want. So, when initially visiting with foundations, ask your program officers how they like to receive communications. Do they prefer email or mail?  Send quarterly updates that talk about the recent impact of grants and relevant organizational changes and news. Do not send blanket communication pieces. Connect what you are doing with the interests of the foundation.

Make meetings about more than ‘the ask’

If you’re smart, you want your relationship to be about more than money—so make your meetings about more than money. Meet occasionally to discuss the work of your organization and the grant while also discussing challenges you face or changes that are occurring.  Be realistic and honest to ensure that the foundation has a good understanding of your organization’s health. Remember, foundations support organizations that can meet projected outcomes and have impact. Give them reason to believe you can.

Build internal awareness

Make sure your board and staff are aware of the conversations and collaborations you have with foundations. Don’t let them get caught off guard when they run into a leader or staff person from a foundation that supports you.

Let your work speak for itself

Show the foundation what you do, how you do it and what makes you unique in the community. They’re interested in the people you serve; that’s who they’re really investing in. And remember: If you send them late reports, poorly written materials and other evidence of sloppiness, your work will speak for itself – and for you. Trust me: It makes it hard for a foundation to invest and believe in the future of an organization when basic tasks are not executed well.

So, the next time you pick up that phone, think about Paul’s experiences as a foundation program officer. Do you want to just be another organization asking for money?  Or would you rather be an organization with a relationship that includes monetary support?

Derrick Feldmann is CEO of Achieve, an Indianapolis-based consulting firm serving the needs of small to medium-sized nonprofit organizations through personal consultation and online philanthropic resources.

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Grantwriting Tip: Cast Your Agency as a Hero, Not a Superhero  

By Cheryl A. Clarke

An excerpt from the book Storytelling for Grantseekers: The Guide to Creative Nonprofit Fundraising

When writing the goals and objectives section of a foundation grant proposal, grant seekers are like sci-fi writers. They envision the future. Of course, there is one critical difference: whereas sci-fi writers generally present fantasy, grant seekers discuss what is realistic and feasible.

To understand this concept, it may help to think in visual terms. Take a mental snapshot of the community where your nonprofit agency does its work today, at this very moment. What is the problem of unmet need that your agency addresses? Who are the people served by your agency? What more could your agency do if it had additional funds?

Now imagine taking a second mental photograph of the same community at the end of the projected grant period. Compare it with the earlier snapshot. What’s different? How has the need been met? How have the clients been served? Most important, how have the lives of your agency’s clients been positively changed? You should “see” a noticeable difference between these two mental snapshots.

How the community and your story’s main characters (your agency’s clients) will have changed is portrayed in the goals and objectives section of a grant proposal. The challenge in writing this portion of the proposal story is to vividly and accurately describe to the reader what can be seen in the two mental photographs just mentioned. The change that occurs helps resolve the conflict (the problem or need).

Readers appreciate a story that has a believable, satisfying resolution. Program officers and others reviewing grant proposals do too. The validity of your request for grant funding hinges on whether the resolution of the conflict rings true. If it doesn’t, no matter how well the story is written or told, it falls flat and short of the mark.

Be the Hero, Not the Superhero

How do goals and objectives fit into the storytelling metaphor? In the best stories, characters don’t do anything that isn’t believable, especially at the climactic, pivotal moment. If they act otherwise, the storyteller risks losing the audience’s trust and interest. This is also true in proposal writing.

Accordingly, nonprofit agencies should present themselves as heroes, not superheroes. They can do the possible, not the impossible. Your nonprofit agency probably will not be able to save the planet. What your agency does is much more realistic: it has a positive impact on people living in the community—pretty heroic work in its own right.

In a Western the cowboy hero doesn’t rescue countless fair maidens who are tied to the train tracks; he only saves one. That’s realistic. That’s believable. When writing objectives for a particular agency’s program or project, keep them realistic.

So what’s realistic? The answer to this question is going to vary considerably from agency to agency and from program to program. What’s realistic depends on several factors. These include, but certainly are not limited to, the complexity of the identified problem, the maturity of the program and how long it has been in existence, the specific nature of the agency’s response to the problem, the receptiveness of its clients to the agency’s response, and the experience and expertise of agency staff. In some situations a 5 percent positive change would be considered terrific. Under other conditions a respectable figure might be 15 or 25 percent. It all depends on what is truly realistic given the circumstances.

However, stating that your nonprofit agency will be able to double its service capacity and effect a 100 percent transformation of its clients is likely to raise an eyebrow. At first blush, this appears to be a huge change. Therefore a program officer most certainly will wonder, “Is this objective possible? Is it realistic?”

It is, of course, possible for a nonprofit agency to substantially increase its services during the relatively short one-year grant period. If so, your proposal story must thoroughly explain how such a dramatic increase is feasible. If your agency’s proposal is not convincing on this point, then your agency probably won’t get the grant.

Cheryl Clarke is a fundraising consultant and trainer, and an award-winning writer of short stories. Her book, Storytelling for Grantseekres: The Guide to Creative Nonprofit Fundraising, is available in the AFP Bookstore. She is also co-author of the book, Grant Proposal Makeover: Transform Your Request from No to Yes.

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AFP Awards Materials Now Available—Nominations Due July 15  

Nomination forms for AFP’s Awards for Philanthropy and other honors are now available on the AFP website and are due on July 15. The nomination booklet can be downloaded from the electronic version of this eWire article or can be found at under National Philanthropy Day and AFP Awards.

The only exception is the Campbell & Company Awards for Excellence in Fundraising, nominations for which are due on Sept. 15.

Nominators should be aware that several changes have been made to the criteria and nomination process for the Awards for Philanthropy. Supporting materials for most awards are no longer accepted, and nominations MUST address the criteria in the indicated format. These changes were made because of the increasing number of entries and to ensure fairness and consistency as judges reviewed the nominations.

AFP Awards for Philanthropy

AFP offers a number of different awards for exemplary work in philanthropy and fundraising. These include AFP’s Awards for Philanthropy, which include the following categories:

  • Paschal Murray Award for Outstanding Philanthropist
  • Freeman Philanthropic Services Award for Outstanding Corporation
  • (CCS) Award for Outstanding Fundraising Professional
  • Changing Our World/Simms Awards for Outstanding Youth in Philanthropy, Ages 5-17 and Ages 18-23
  • Award for Outstanding Foundation
  • Award for Outstanding Volunteer Fundraiser

Nominations for the Awards for Philanthropy are due on July 15 and must be submitted electronically. No supporting documentation is allowed, only the answers to the questions and criteria that are found on the nomination form.

Other Honors

AFP also offers other awards for outstanding fundraising achievements, service to AFP and chapter efforts in diversity:

  • The Barbara Marion Award for Outstanding Leadership to AFP recognizes an AFP member who demonstrates outstanding leadership and service to the association and/or its related entities, such as the AFP Foundation for Philanthropy.
  • The Charles R. Stephens Excellence in Diversity Chapter Award recognizes the year's most outstanding demonstration by an AFP chapter of leadership, creativity, and initiative in building diversity in membership or programming. One award is presented in each chapter size category.
  • The Campbell & Company Awards for Excellence in Fundraising are presented to nonprofit organizations' development departments or fundraising programs that have developed an innovative initiative, program or project design, or technique that has increased their donor base, increased the amount of funds raised, and improved their fundraising return on investment. One award will be given in each of two categories based on organizational size. Unlike the other honors, nominations for the Campbell & Company Awards for Excellence in Fundraising are due Sept. 15, and supporting materials are allowed. More information can be found on the nomination form.

More information about these awards and the Awards for Philanthropy can be found on the AFP website,, under National Philanthropy Day and AFP Awards.

Research Prize and Chapter Ten Star Award

The AFP Awards Committee oversees all of these awards programs except for the Skystone Ryan Prize for Research on Fundraising and Philanthropy and the AFP Chapter Ten Star Award.

More information about the Skystone Ryan Prize for Research on Fundraising and Philanthropy can be found at under Research and Statistics.

For information on the Chapter Ten Star Award, members should log into the "Member Gateway" section of the AFP website.

Questions about the AFP awards program can be directed to NaTanya Lott at /about/.

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AFP, The Globe and Mail Create 'A Time to Give'

AFP is continuing its partnership with Canadian newspaper The Globe and Mail through a special June 27 philanthropy supplement titled “A Time to Give.”

Members are encouraged to advertize in this premier report because it will be a tremendous opportunity to reach a wide cross-section of donors and constituents. Special advertizing discounts are available. The deadline for reserving space is May 20.

This special national report will investigate how charities are addressing the current global economic crisis and why charitable contributions are needed now more than ever. Other topics will include the best ways donors can support a charity in the current climate, ethics and public trust, innovative programs and services being offered and planned giving, bequest and endowments.

The Globe and Mail reaches 1.3 million daily readers and is a favorite publication of Canadian senior executives, read by 71 percent of all executives and 76 percent of presidents, CEOs and chairpersons.

“In these economically challenging times, this type of national supplement focusing on philanthropy is more important than ever,” said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. “Charities can’t afford to pull back on their marketing and advertizing efforts, and we believe our partnership with The Globe and Mail is an extraordinary value and opportunity for members to show all of Canada how they’re helping to improve the world. I encourage members to participate in this special report.”

The supplement will include a limited number of one-eighth, quarter-, half- and full-page advertizing positions. The Globe and Mail will also reprint additional copies of the report and provide an online PDF version of the supplement. The special section also will appear online at for seven days and thereafter will be archived for 90 days.

A sell sheet attached in the electronic version of this announcement has additional information about the supplement. Interested members can contact Richard Deacon, “A Time to Give” project manager, at (604) 631-6636 or

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AFP/APRA Summit: Organizational and Skill Evolution for Changing Times

Join AFP and APRA in a collaborative summit that will inspire professionals to come together and explore new, creative ways to retool and rethink fundraising in today's changing times. The event takes place July 28, 2009, at Boston Marriott Copley Hotel in Boston, Mass. Learn more and register today. Go to the AFP website,, and click on Education and Career Development. Then click on Executive Insitutes.

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Join the European Fundraising Community

The Institute of Fundraising National Convention attracts over 2,000 fundraisers every July in London, England. Your conference fee entitles you to access over 250 speakers and 130 sessions. Visit for full details.

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Nominations Being Accepted Now for AFP Board of Directors

AFP is seeking nominations of qualified candidates to serve on its 2010 Board of Directors as a district director or as an at-large director. Forms are due on or before July 31, 2009. More information to come next week in eWire. Visit the AFP homepage,, and find the Board Nominations announcement in the to-do list or see this story in the electronic version of eWire.

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Don’t Miss Two Great Webconferences to Better Your Fundraising

(To register go to and click on Education and Career Development—AFP Web/Audioconferences)

Special Ethics Program - Presented by Paulette Maehara, CFRE, CAE

In good times and bad, with stellar ethics, you will always have solid footing. AFP's president and CEO Paulette Maehara will explore how organizations can take a holistic look at ethics, identify how organizations can use ethics to reach out to the public to generate support and discuss current pressing ethical issues such as donor control and percentage-based compensation. Don’t miss Weaving Ethics Into Your Organization's Fundraising on Wednesday, May 6 at 1 p.m. EDT.

Giving Circles – Presented by Angela Eikenberry and Jessica Bearman

Giving circles are emerging in popularity among groups of donors across the United States and elsewhere as community-based funding vehicles. This presentation will provide information on the giving circle landscape, based on several studies of giving circles, with special attention given to their impact on donor-members and nonprofit funding recipients. Register today for Giving Circles and Fundraising in the New Philanthropy Environment presented on Wednesday, May 20, at 1 p.m. EDT.

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