MODULE 6 More Than a Little Change: Identification of Financial Sources PARTICIPANTS' GUIDE Published by: U.S. EPA Region 4 Environmental Justice and Children's Health Section Environmental Justice Academy pn* United States Environmental Protection Agency ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Table of Contents Preparation Materials 3 Icon Key 4 Module 6 Day 1 5 Module 6 Day 2 6 Module 6 Day 1 8 Module 6 Day 1: Welcome Back 9 Module 6 Day 1: Close the Gap Recap: Module 5 9 Module 6 Day 1: Lesson 1: Defining Financial Management 10 Module 6 Day 1: Lesson 2: Budget? What Budget? Developing a Realistic Budget 12 30-Minute Break 20 Module 6 Day 1: Activity: Budget Outline 20 Module 6 Day 1: Closing 20 Module 6 Day 2 21 Module 6 Day 2: Welcome Back 22 Module 6 Day 2: Lesson 3: Show Me the Money: Developing a Plan for Obtaining Funds 22 15-Minute Break 26 Module 6 Day 2: Lesson 4: Defining the Grant Process 27 30-Minute Break 29 Module 6 Day 2: Lesson 5: Crossing Your T's and Dotting Your I's 29 Module 6 Day 2: Activity: The Good, Bad, and Ugly of Grant Applications 37 Module 6 Day 2: Lesson 6: Financial Sustainability 38 Module 6 Day 2: Summary: Synopsis of Day 1 and 2 41 Homework Assignment 42 Bonus Activity 43 Appendices 44 Appendix A: Additional Resources 45 Appendix B: Glossary 48 Appendix C: Activity: Budget Outline 50 Appendix D: Activity: Identify Potential Funding Sources 51 Appendix E: Homework: Piranha Bowl 52 Appendix F: Sample Organizational Budget 55 United States Environmental Protection kl a m Agency ------- More Than a Little Change: Identification of Financial Sources Additional Notes: Module 6 Participants' Guide United States Environmental Protection kl a m Agency ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Preparation Materials Participant Guide Icons and Agendas United States Environmental Protection kl a m Agency 3 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Icon Key Icon Title Meaning 51 Instructions to the facilitator This icon means there are specific instructions for the facilitator. This content should not be read aloud. Background for the facilitator This icon indicates that there is background information the facilitator should be aware of when covering this topic. This information is presented in the facilitator's guide. Facilitator says This icon means the facilitator should read the content nearly verbatim, interjecting thoughts when appropriate. 0 1 Key point This icon indicates an important point that the facilitator should communicate to the audience in their own words. z 1 Questions This icon means the facilitator should allow time for the audience to ask questions or the facilitator should ask the audience questions. E . Activity This icon indicates an activity that the facilitator should explain. The activity can be either a group or individual activity. | Assessment This icon indicates the facilitator will conduct an assessment. Multimedia This icon indicates the facilitator will have students watch a video. | 1 Computer This icon indicates the facilitator will have students visit an online resource. . Handouts or resource materials This icon indicates the facilitator will give students a handout or other resource material. | Homework This icon indicates a homework assignment. 1 c Transition This icon indicates the facilitator will provide a transition from one topic to another. United States Environmental Protection kl a m Agency 4 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Agendas Module 6 Day 1 More Than a Little Change: Identification of Financial Sources Date: Time: Location: Contact: Time Day 1 Facilitator Close the Gap Recap: Module 5 Overview of module 5 Short review of homework o Select a specific community concern o Identify key stakeholders o Identify potential resources Questions and answers Lesson 1Defining Financial Management Definition of financial management Brief guidance on the objectives and functions of a well-developed financial management plan Lesson 2Budget? What Budget? Developing a Realistic Budget Define a budget Why is it important to create a budget? How do you develop a realistic budget? Break Lesson 3Show Me the Money: Identifying Funding Sources Outlining financial resources Where to find resources Ways to get money Closing Short introduction to day 2 Thanks and closing of session United States Environmental Protection kl a m Agency 5 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Module 6 Day 2 More Than a Little Change: Identification of Financial Sources Date: Time: Location: Contact: Time Day 2 Facilitator Welcome Back Sign in Housekeeping Lesson 4Defining the Grant Process What is a grant? What is a grant proposal application? What is a request for proposal? When should you write a grant application? Break Lesson 5Crossing Your T's and Dotting Your I's Identify the problem or goal area for which funds will be sought Thoroughly search the field for available grants Know the types of support available to you Consider whether your proposed project fits with the identified funder's goals Focus on the type of support you want Know the grant guidelines and follow them exactly Activity: The Good, Bad, and Ugly of Grant Applications Review different grant applications Lesson 6Financial Sustainability What is financial sustainability? Why should you complete a plan for financial sustainability? How should you plan for financial sustainability? United States Environmental Protection kl a m Agency 6 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Time Day 2 Facilitator Summary Review of all topics discussed Interactive discussion and questions Homework Assignment Complete the appropriate column in the action plan Complete budget template Prepare for piranha bowl United States Environmental Protection kl a m Agency 7 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Module 6 Day 1 More Than a Little Change: Identification of Financial Sources United States Environmental Protection kl a m Agency 8 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Module 6 Day 1: Welcome Back Objective: Welcome back to the EJ Academy. Sign the class roster and ensure that the points you have earned are annotated on your participant points matrix. Module 6 Day 1: Close the Gap Recap: Module 5 Objective: You should be able to identify key stakeholders, both internal and external, who can help the community address issues. Ideally, the key stakeholders can offer informational resources, technical and financial assistance, and assistance with potential policy changes. H Module 5 Overview In module 5, you developed skills to promote constructive dialogue between stakeholders and partners. In addition, you identified what support you need to enhance community initiatives, as well as stakeholders and partners who can provide those needs. In module 5, you were provided tools to identify key stakeholders, both internal and external, who can help the community address issues with informational resources, technical and financial assistance, and policy changes. You were also provided with tools to promote constructive dialogue and assess the outcomes of community engagement with stakeholders to promote lasting relationships. These tools helped you develop skills to determine who can bring ideas and resources (i.e., money, time, meeting space, knowledge, marketing, supplies) to solve community problems. Module 5 Homework Discussion Select an existing environmental justice issue in your community and evaluate the role of key stakeholders in addressing the issue. Identify key stakeholders (internal and external), their roles, and the potential resources they bring. The finished project will be added to your portfolio. Discussion Points What was the most important concept you learned from module 5? What concepts were easy to understand? What concepts resonated with you? United States Environmental Protection kl a m Agency 9 ------- More Than a Little Change: Module 6 Identification of Financial Sources Participants' Guide How can you use this information within your community? Module 6 Day 1: Lesson 1: Defining Financial Management Objective: You will learn to define financial management and understand why it is necessary for community development. What Is Financial Management? Financial management encompasses planning, organizing, directing, and controlling financial activities, such as procurement and use of funds. It means applying general management principles to financial resources. * Objectives of Financial Management Financial management concerns procurement, allocation, and control of financial resources for a community project. Its objectives can include: Ensuring a regular and an adequate supply of funds to the projects. Ensuring optimum use of funds with the least cost impact. Ensuring certainty on investment (i.e., funds should be invested in specific goals and projects). a Functions of Financial Management To determine how much money is needed, a financial manager should make an estimate considering the capital requirements of the community project. This will depend upon the project's initial costs, operations, maintenance, future programs, and policies. Determine how much money is desired. This will depend upon the proportion of equity capital an organization or community possesses and the quantity of additional funds that must be raised from outside parties. Brainstorm available funding possibilities. For additional funds to be procured, an organization or community has many choices, including: Leveraging shared positions and resources. Becoming a line item in an existing budget. Combining your activities and resources with organizations with similar missions. United States Environmental Protection kl a m Agency 10 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Applying for grants. Using existing personnel resources. Soliciting in-kind support. Fundraising. Using third-party funding. Developing a fee-for-service structure. Acquiring tax revenue. Securing endowments and giving arrangements. Establishing membership fees and dues. Developing a business plan. Creating a for-profit corporation to help pay for the nonprofit side. Having programs be "picked up" by other organizations. Tracking your various in-kind volunteer services, number of hours, and in-kind resource support can help you qualify for certain grants, especially where there is a cost-share (i.e., there are ways to calculate the monetary equivalents). More importantly, this can persuade new funders. Showing that you have a volunteer base who are donating unpaid, pro bono time to solve community challenges demonstrates community enthusiasm. Organizations need to find funding from partners. Choice of funding will depend on relative merits and demerits of each source and the period of financing. The financial manager must make decisions about cash management. Cash is required for many purposes, including wages and salaries, bills, payments to creditors, current liabilities, maintenance, community cleanup, revitalization, and health programs. The financial manager has to plan, procure, and utilize the funds, but must also exercise control over finances. A financial sustainability committee can: Bring in resources to help your organization survive and thrive. Ease the transition from one source of funding to another, such as at the end of a grant period. Help find money or goods from many different sources. A financial committee that has members with many connections will create a diverse funding base for the organization, ensuring sustainability. Meet funders' requirements. Sometimes, the existence of a financial sustainability committee is a requirement for receiving a grant. United States Environmental Protection kl a m Agency 11 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Allow group members to focus their time and energy on the jobs they were hired for. Too often, members of organizations spend so much time finding resources that they are unable to do what they volunteered or were hired to do. iyi Discuss What is financial management? o Financial management means planning, organizing, directing, and controlling financial activities, such as procurement and use of funds. It means applying general management principles to financial resources. What are the objectives of financial management? o To ensure regular and adequate supply of funds to the projects, o To ensure optimum use of funds. Once the funds are procured, they should be utilized in an efficient way. o To ensure certainty on investment (i.e., funds should be invested in specific goals and projects). What functions should you consider when planning for financial management? o Determine how much money you need. o Decide how much money you want, o Brainstorm available funding possibilities. o Take care of the money. The finance manager must make decisions with regards to cash management, o Control the finances. The finance manager not only has to plan, procure, and utilize the funds but they also must exercise control over finances. Module 6 Day 1: Lesson 2: Budget? What Budget? Developing a Realistic Budget Objective: Understand what a budget is, what to include in a budget, and why it is important. a What Is a Budget? An amount of money available for spending that is based on a plan for how it will be spent. A plan used to decide the amount of money that can be spent and how it will be spent. United States Environmental Protection kl a m Agency 12 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide An official statement from a government about how much it plans to spend during a period and how it will pay for the expenses. The Importance of Budgets It is important to create accurate and up-to-date annual budgets to maintain control over their finances and show funders exactly how their money is being used. The specificity and complexity of the budget depends on how large it is, the funders' requirements, and how many different programs or activities the money funds. Budgets can sharpen your understanding of your goals. They also provide a financial reality check by showing you what you can afford and where the gaps in funding are. Budgets can help you plan to meet future needs and decide what can be done each year. In addition, budgeting: o Encourages effective ways of dealing with money. By showing you what you can or can't afford with the known income, a budget can motivate you to be creative in seeking out other funding sources, o Fills the need for required information. A complete budget is a necessary element of funding proposals and reports to funders and the community served. o Facilitates discussion of the financial realities of an organization, o Helps organizations avoid fiscal surprises or pitfalls and maintain fiscal control. Budget Elements Projected expenses. The amount of money expected to be spent in a fiscal year, broken down into expected categories such as salaries, equipment, office expenses, and travel. Projected income. The amount of money expected to enter the organization for a fiscal year, broken down by sources. These sources might include grants, contracts, fundraising efforts, memberships, and the sale of goods or services. The interaction of expenses and income. Usually, funding is conditional. Funders may provide money for specific positions, activities, or items. If funding comes with restrictions, it's vital to build those restrictions into the budget to follow funder agreements. Adjustments to reflect monetary fluctuations. Budgets usually begin with estimates, and as time progresses, those estimates will need to be adjusted. United States Environmental Protection kl a m Agency 13 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Develop a Realistic Budget Create a calendar for the budgeting process. This calendar should include milestone dates, check-ins with a review team, monitoring, and internal reporting. Plan earlyat least six months before the next fiscal year. Have separate calendars for monitoring, internal reporting, and other aspects of financial management. What to Consider When Developing a Budget Setting financial goals should be one of your first priorities. You will need research and data to assign costs to various items. Donated items, volunteers, and in-kind services should be included, as these items vary each year. Determine monetary needs for the following year, using these steps to estimate your expenses: o List yearly expense totals for absolute necessities, o List estimated expenses for conducting organizational activities, o List estimated expenses for miscellaneous costs, o Total all defined expenses. Estimate your organization's income following these steps: o List all actual figures or estimates of income expected from funding sources, o Estimate the amount to be raised in the next fiscal year from fundraising. o Estimate the amount to be received from items that may be sold, o List and estimate the amounts from any other income sources, o Total the listed items to determine the total projected income for the fiscal year. Follow the five steps of analyzing and adjusting budgets: o Lay out your figures in an easy-to follow format. o Compare total expenses to total income, o Know what to do if your budget is balanced, o Know what to do if there is a surplus, o Know what to do if there is a deficit. Your project team should review the completed budget. Refer to the calendar to ensure that reporting and quarterly meetings are included in the timeline. Confirm that the budget is aligned with the S.M.A.R.T. actions. United States Environmental Protection kl a m Agency 14 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide jQ Some Practical Considerations Sometimes budgeting and financial management can prove challenging for organizations. You can find professional financial management help by hiring a bookkeeper, accountant, or chief financial officer (CFO). Organizations like the U.S. Small Business Administration (sba.gov/fundinq-proqrams/loans) and the Service Corps of Retired Executives (score.org) can assist with budgeting, business plans, and loan searches. Local universities, community and technical colleges, or government agencies may have offices that assist with financial planning. Sharing an accounting position with another organization is another possibility. The Preliminaries: Funds for the Next Fiscal Year It is important to know what the priorities are and what makes the most sense for the organization at each stage of development. Determining how monies will be spent involves an organization-wide planning process. Consider These Questions: Which activities or programs will do the most to advance your mission? Can you carry out these programs with your projected income and resources? How many positions will it take to run those activities or programs well? How will staff members be compensated (e.g., hourly wages, salaries, consultant fees, benefits), and how much? What funding sources will you use to compensate them? What else is needed to run the organization and its activities (e.g., space, supplies, equipment, utilities, insurance, transportation)? Step 1: List the estimated yearly expenses for the organization's absolute necessities. For most organizations, these expenses may include, but aren't limited to: Salaries or wages for all employees, listed separately by position. Fringe benefits for all employees, also identified by position. Even without formal fringe benefits, taxes, compensation, and unemployment insurance for regular employees must be paid. These costs can be considerable payroll additions. Rent and/or mortgage payments for the organization's space. Utilities (e.g., heat, electricity, gas, water). Phone service. Internet provider or server costs, depending on your organization's needs. Estimating Expenses United States Environmental Protection kl a m Agency 15 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide o Insurance (e.g., liability, fire, theft). Step 2: List the estimated expenses for things vou need to conduct the organization's activities. Program and office supplies (e.g., pencils, stationary, software, educational materials). Program and office equipment (e.g., peripherals, copiers, fax machines). Be sure to figure in the annual estimated costs of repairs or service contracts in addition to purchase or lease costs. Step 3: List estimated expenses for anything else the organization is obligated to pay or can't do without. Loan payments. Consultant services. These may include annual auditing, accounting, or bookkeeping services, or payments to other organizations for specific services. Printing and copying, if not done within the organization. Transportation, including travel expenses for staff, participants, and volunteers and vehicle upkeep and expenses for any organization-owned vehicles. Postage and other mailing expenses. Step 4: Total all the expense items vou have listed. This total represents your organization's projected expenses for the coming fiscal year. Estimating Income: Where Are We Going to Get All That Money? Use last year's figures, if available, as a baseline. Estimate conservatively rather than being overly optimistic, which could lead to disappointment. Step 1: List all actual figures or estimates from expected funding sources. This list should include sources that have already promised monies for the upcoming year. These sources may include federal, state, or local government agencies and private and community foundations. Step 2: Estimate the fundraising amount for the next fiscal year. Fundraising efforts might include community events (e.g., a raffle, a bowl-a-thon), more ambitious events (e.g., a benefit concert by a world-class performer), media advertising, or phone or mail solicitation. United States Environmental Protection kl a m Agency 16 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Step 3: If members pay yearly dues or fees, estimate the amount yielded from them. Step 4: List and estimate the amounts from any other expected income sources. Step 5: Add up all the income items vou have listed. This total represents the money available, or your organization's projected income for the next fiscal year. Analyzing and Adjusting the Budget Step 1: Lav out vour figures in a useful format. A useful budget must be organized to inform the reviewer of exactly how much is available to spend in each expense category. It is beneficial to use a spreadsheet. The spreadsheet should list funding sources along the top and list expense categories on the left-hand side. Each column represents a funding source, and each row represents an expense category. Where each column and row meet (cell), the number represents the amount of money from that funding source (the column) that goes to that expense (the row). Step 2: Compare total expenses to total income. If projected expenses and income are equal, then the budget is balanced. If the projected expenses are less than the projected income, there is a budget surplus. This allows for the possibility of expanding or improving the organization or putting money away for when you need it. If your projected expenses are greater than the projected income, there is a budget deficit. In this case, you will need to find more money or cut expenses to run the organization in the coming year. Step 3: For balanced budgets, make sure the money can be used as planned. If you've filled in the numbers in accordance with your funding restrictions, your spreadsheet should immediately let you know whether you have enough in each of your expense categories. If there are discrepancies, there are several ways of addressing them. vvEPA United States Environmental Protection Agency ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Consider negotiating an arrangement with the funder that allows you to use the money in other ways. Consider reassigning expenses from one category to another. If you don't have enough money to pay an assistant director, for example, it may make sense to make them the coordinator of a specific program and pay part of their salary with funds allotted to that program. Consider rethinking your priorities so that the money can be spent in accordance with funding restrictions It's important to remember that the mission, philosophy, and goals of an organization should drive funding, not the other way around. Creating a program or project simply to make use of available funding usually doesn't help you meet organizational goals. Step 4: Be aware that a budget surplus may not show up as cash until the end of the coming fiscal year. A conservative course is sticking to the budget and investing the excess money at the end of the year. This provides something to draw from in emergencies, or money for something the organization really wants or needs in the future. "Invest" doesn't necessarily mean putting money in the stock market. Certificates of deposit give high interest rates in return for keeping money in the bank for a set period (generally from six months to five years). Money market accounts, which give a high interest rate for keeping a large balance, are easy ways for organizations to earn interest while keeping money available for emergencies. A surplus can be used to improve working conditions within the organization by raising salaries or adding benefit packages. It is important to remember that once this type of change has been promised, you're obligated to fulfill it. A surplus can also be used to purchase items that you haven't been able to afford previously. Consider adding positions or starting a program or initiative that has been planned for a long time. When starting a new program, commit to maintaining it for years so it will have enough time to be successful. Consider a long-term capital investment, such as buying a building. You could lock in your rent for the duration of the mortgage, and you might be able to provide the organization with income by renting parts of the building to other organizations. The surplus may not be large enough for the organization to make significant changes, but it may help you collaborate with other organizations to achieve a goal. United States Environmental Protection kl a m Agency 18 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Step 5: For budget deficits, consider combining several or all the following possibilities to make your budget work. If you have enough money in the bank or in investments from prior years, you can use it to fill the gaps in your budget. Try to raise money by writing grants, fundraising, or increasing fees for services. If your organization has a plan for raising money, list it with your estimated income, but be aware that a projection isn't "real" money until you reach the financial goal it represents. Collaborate with another organization to share the costs of services, personnel, materials, or equipment. Try to cut expenses by reducing some costsuse less electricity, use recycled paper, or try to get items you planned to buy for less money. Cut expenses by eliminating some things from your budget. Borrow the money your organization needs, being sure to add loan payments to the projected expenses and figure them into the revised budget. beneficial to put the budget in a form everyone in the organization can understand. A simple budget document lists projected expenses by category and projected income by source, with totals for each. This can help readers see how much the organization intends to spend, how much it intends to take in, and what the difference is, if any. Refer to Appendix F for an example budget. The spreadsheet itself can also be the budget document, for those who want to see exactly how the money is allocated. Many organizations provide their boards with both a simple budget and a spreadsheet. This ensures that board members eager to understand the organization's finances can see the full picture, while others can simply see whether the budget is balanced. Working With Your Budget Most organizations review their budgets regularlyonce a month is usually reasonableand revise them to keep them accurate. If the organization gets unanticipated monies or spending estimates are off, these things should be figured into the budget. The budget becomes the basis for financial documents you might prepare during the year (e.g., balance sheets), which give an up-to-date picture of the organization's financial status. Creating the Budget Document While a spreadsheet will be used to track the organization's finances, it is also United States Environmental Protection kl a m Agency 19 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Your Budget Should: Show you if there are still any gaps in funding, and exactly where they are. Show you exactly what needs to occur to close those gaps. Allow you to carefully track money, adjust to changes, and avoid overspending. 30-Minute Break Objective: You will take a 30-minute break before the activity. Module 6 Day 1: Activity: Budget Outline You will receive a budget spreadsheet, a flip chart, and markers before the brainstorming activity. Think about what elements you need to identify for your budget. An example budget spreadsheet can be found in Appendix C. Brainstorm with others at your table about what should be included in a complete budget. Remember that the goal is not to develop numbers (i.e., costs). Instead, think about what your specific goals are and what you need to achieve them. Module 6 Day 1: Closing Objective: Close out day 1 of module 6 and receive a short introduction to day 2. ~ Introduction to Day 2 A budget process that examines an organization's priorities produces an accurate, balanced budget, helps you control the organization's finances, and helps guide the work. A rational and accurate budget allows organizations to give accurate reports to funders and to spend their money as they have promised. The budget will also provide clear guidelines about what can be spent and when. Discuss the need to develop a list of financial resources, seek funding through grants, and obtain financial sustainability using a financial management plan. United States Environmental Protection kl a m Agency 20 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Module 6 Day 2 More Than a Little Change: Identification of Financial Sources United States Environmental Protection kl a m Agency 21 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Module 6 Day 2: Welcome Back Objective: Welcome back to day 2 of module 6. Sign in and mingle with fellow participants. Module 6 Day 2: Lesson 3: Show Me the Money: Developing a Plan for Obtaining Funds Objectives: You will learn to research and develop a list of financial resources. You should also research non-monetary resources to support community development. n Resources Resources (or assets) can include individuals, organizations, institutions, buildings, landscapes, or equipment. A resource is anything that can be used to improve the quality of life for community members. Community Resources Community resources are the people and places that members of a community or community organization can depend on to fill unmet needs. Community resources can include: People. Every individual is a potential community asset. The stay-at-home parent who organizes a play group, the church member who starts a discussion group on spirituality, and the firefighter who's willing to risk their life to keep the community safe are all community assets. Physical structures or places such as schools, hospitals, churches, libraries, recreation centers, and social clubs. These assets could be a town landmark or symbol, an unused building that could house a community hospice, or a room for community meetings. These assets might be public places that already belong to the community, such as parks, wetlands, or other open spaces. Community services, such as public transportation systems, early childhood education centers, or community recycling facilities. Local businesses that provide jobs and support the local economy. You and everyone else in the community are potential community assets. Everyone has some skill or talent, and everyone can provide knowledge about the community, connections to the people they know, and the kind of support that every effort needsmaking phone calls, stuffing envelopes, giving people United States Environmental Protection kl a m Agency 22 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide information, or moving equipment or supplies. Everyone can be a force for community improvement. Government Resources Government resources include local, state, and federal government programs, staff, and internet tools. These resources provide guidance, answers, and financial help for individuals and organizations. Government resources include schools, colleges, libraries, post offices, and recreational facilities and their staff. Because tax dollars support these structures, these resources tend to be available to all members of the public. Government resources are not merely restricted to grants. Some environmental justice communities have attained congressional appropriation line items for community-based projects by working closely with their elected representatives in Congress. Other public resources are targeted to certain segments of the community, such as mental and physical health services, food and housing assistance, and child and elderly care services. Below are examples of government resources: https://www.usa.gov/ https://www.epa.gov/ https://www.usa.gov/monev Private Resources Private nonprofit organizations also provide a range of services to the community. Unlike public organizations that exclusively employ paid staff, these organizations rely heavily on volunteers to fulfill their missions. Civic organizations and even groups of employees from local businesses who band together to volunteer are community resources. Any individual who volunteers time to help one of these nonprofit groups is a community resource. Grant Resources A grant resource can be a private or government entity that gives based on subject and geographic region. Grant seekers are encouraged to match the funders' interests to their organization's mission, programs, populations, and locations served. We recommend using grants.gov to find and apply for federal grants. Fundraising Resources Fundraising is the process of requesting contributions of money or other resources from individuals, businesses, charitable foundations, or government agencies. Although United States Environmental Protection kl a m Agency 23 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide fundraising typically refers to gathering money for nonprofits, it is sometimes used to solicitat investors or other sources of capital for for-profit enterprises. New forms of fundraising, such as online fundraising, have emerged in recent years. Below are examples of fundraising resources: Association of Fundraising Professionals (AFP): www.afpglobal.org National Council of Nonprofits: https://www.councilofnonprofits.org/ Network for Good: https://www.networkforgood.com/resources/guides- templates/ Foundations. Refer to www.philanthropy.com and https://fconline.foundationcenter.org/ and subscribe to https://philanthropynewsdigest.org/. Be sure to build direct relationships with foundations, know their values, and research what they funded previously. Crowdfunding Crowdfunding is the practice of raising money for a cause by harnessing the power of social networks to drive awareness and donations from all over the world. The crowdfunding model is fueled by three types of actors: The project initiator who proposes the idea and/or project to be funded. Individuals or groups who support the idea. A moderating organization (i.e., the "platform") that brings the parties together to launch the idea. There are two main models of crowdfunding: Donation-based funding. Funders donate via a collaborative, goal-based process in return for products, perks, or rewards. Below are examples of donation-based funding: o GoFundMe: https://www.gofundme.com/ o Kickstarter: https://www.kickstarter.com/ o Indiegogo: https://www.indiegogo.com/ o RocketHub: http://www.rockethub.com/ Investment crowdfunding. Businesses seeking capital sell ownership stakes online in the form of equity or debt. In this model, individuals who fund become owners or shareholders and have a potential for financial return, unlike in the donation model. Below is an example of investment funding: o Crowdfunder: https://www.crowdfunding.com/ United States Environmental Protection kl a m Agency 24 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Identifying and Communicating with Potential Funders Determine appropriate funding sources. o Find out what funding sources exist that might support the project, o Research funders' websites or listings to find more information about them and the grants they provide, o Identify funders with grants that match the organization's needs. Before contacting funders, identify the program administrator or program officer for the specific grant program. Identify potential supporters for your project. o Who are the key players that can help generate support among others? o Who are the individuals and groups that you need to sign on? Create a community map with connection lines among various individuals and groups to identify connections. We also recommend these tips for writing grants and securing funding: If your organization lacks "programmatic capability" (i.e., history to manage a grant), partner with an experienced, eligible entity, such as the local or regional government, a nonprofit, or an academic institution. Research a few recent grant proposals that received funding from the funder to review and reference as a "go-by." This will help you see the techniques of award-winning proposals. Reach out to successful previous grant recipients many of them would be happy to share their proposals. Realize that many grants are highly competitive. Be open to partnering with successful grant writers, such as environmental consultants. Some cities enroll high-quality grant writers to give their communities the highest competitive advantage. Enlist pro bono help from environmental consulting companies or more experienced nonprofits with successful grant writing experience. Be familiar with all proposal guidelines and answer all questions thoroughly, ensuring space dedicated to criteria is proportional to scoring percentages while staying with the maximum page length. Do multiple rounds of proposal editing and solicit both internal and external feedback to create a persuasive proposal. Activity: Identify Potential Funders for Your Project Brainstorm potential funding sources. United States Environmental Protection kl a m Agency 25 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Use the internet and other sources (i.e., networking with similar community- based organizations) to identify possible grant sources and gather relevant information. Communicate directly with potential funders to establish relationships. Be sure to have an "elevator speech" ready (refer to Appendix E ) to succintly describe your organization, your top projects, and your funding needs. Consider factors such as: o Eligibility for funding under the funder's guidelines, o The timing of the application and funding, o The funder's reporting and other requirements, o The restrictions on the funder's grants, o The funder's priorities and examples of past funded projects. Create a chart to compare different opportunities (see Appendix D). Complete the chart by recording details of funders that appear to have grants that match your needs. Discuss What do we mean by resources? o Resources (or assets) can include individuals, organizations, institutions, buildings, landscapes, and equipmentanything that can be used to improve the quality of life. What type of resources are available? o Community, government, private grant, fundraising, and crowdfunding resources are available to your communities. How can resources be identified? o Research websites for funding sources, o Brainstorm with community members. 15-Minute Break Objective: You will take a 15-minute break prior to the next lesson. United States Environmental Protection kl a m Agency 26 ------- More Than a Little Change: Module 6 Identification of Financial Sources Participants' Guide Module 6 Day 2: Lesson 4: Defining the Grant Process Objective: You should have a clear understanding of the grant process and the information you need to begin the process. Grants A grant is a financial award given to an organization to carry out a public purpose through addressing a problem. Grants do not need to be repaid. Grants are used to carry out an authorized purpose or project and are not provided as personal benefits or assistance. Grants are typically awarded to universities, researchers, law enforcement, cities, states, counties, and nonprofit organizations. Grants are not loans. Loans are different than grants because they are awarded to an individual as a personal benefit or assistance. You are required to pay back a loan, often with interest. What Types of Grants Are Available? There are three main sources for grant funding: Governmentsoften federal, sometimes state, and occasionally local. Private businesses and corporations. Foundations, which distribute millions of dollars each year to community organizations like yours. What Is a Request for Proposal (RFP)? An RFP is an invitation by a foundation or funding agency for bidders to submit a proposal for money for projects that reflect the agency's values, interests, or research priorities. When Should You Apply for Grants? You might apply for grants when: B You are invited to apply or are responding to an RFP. You want to start a new project or expand an existing project, and financial costs are involved these costs cannot be covered in the current budget. You know of a specific granting agency that awards money for the types of costs you envision. Your community meets the eligibility standards for such awards. There is time to commit to the grant writing process. United States Environmental Protection kl a m Agency 27 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Note that some grants have prerequisites, such as attending public meetings or participating in public engagement activities well before the grant deadline. You might start anywhere from three to 12 months in advance, using the previous year's grant guidelines, as they often don't change much from year to year. Operating grants can be used to support the general expenses of operating an organization, from a specific program to the heating bill. An operating grant means the funder supports the organization's overall mission and trusts you to make good use of the money. Program or Project Support Grants Most other grants come in the form of program or project support. A project grant supports a specific, connected set of activities with a beginning and an end, explicit objectives, and a predetermined cost. When a funder gives a grant for a specific project, it is generally a restricted grant and must be used for that project. #\ Grant Proposal Application A grant proposal application is the written document submitted by the requesting agency or individual to a funding agency as a means of requesting grant money. Standard Components of a Grant Proposal Common elements in a grant proposal: Cover letter, title page, and abstract. Statement of the problem/needs statement. Project description (e.g., goals, objectives, methods, activities). Evaluation plan. Budget request and budget justification. Applicant qualifications. Future funding plans and plans for sustainability. Appendices, which may include: o A marketing or dissemination plan schematic. o A project staffing flow chart. o A timeline of proposed activities. o An evaluation instrument (e.g., a survey). o Any existing educational or printed materials to be used. United States Environmental Protection kl a m Agency Focus on the Type of Support You Want General Purpose or Operating Support Grants ------- More Than a Little Change: Module 6 Identification of Financial Sources Participants' Guide o Description or resumes of key project personnel, including advisory board members and any consultants already identified, o Letters of support/participation. Features of a strong proposal that enhance the likelihood of funding: Well-organized proposal sections. Well-researched and -documented statement of the problem. Creative or innovative strategies for addressing the need/problem. Feasible and measurable goals and objectives. A sound evaluation plan. 30-Minute Break Objective: Take a 30-minute break. Module 6 Day 2: Lesson 5: Crossing Your T's and Dotting Your Ys Objective: You should have a clear understanding of the necessary components to include in a winning grant application. Guidelines for Submitting a Good Grant Application Before beginning a grant proposal, the organization should identify the problem or goal area for which funds will be sought. Thoroughly search the field for available grants for the problem/goal area. Understand which types of support are available. This allows you to focus on the funding that fits with your goals. Know the grant guidelines and follow them exactly. If you have any questions, consider meeting with the funding source, or have others contact funding sources on the organization's behalf. Form a working group that includes an expert in the field or someone with grant writing experience. Use a successful application as a model when building your application. Once the application is complete and submitted, follow up with your partners, the community, and the funding source. This ensures that all the information has been received and builds a resource network. United States Environmental Protection kl a m Agency 29 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide ^ Common Elements in a Grant Proposal The discussion that follows will give you guidelines for each element in a grant proposal: Cover letter, title page, and abstract. Statement of the problem/needs statement. Project description (e.g., goals, objectives, methods, activities). Evaluation plan. Budget request and budget justification. Applicant qualifications. Future funding plans and plans for sustainability. Appendices. ^ Cover Letter, Title Page, and Abstract Instructions for the cover letter and title page will be included with the RFP. The cover letter should be on your organization's stationery and signed by the appropriate organizational official. The cover letterusually limited to one pageshould: Describe the organization's interest and capacity to successfully implement the proposed project. Have an upbeat tone that makes it stand out in a positive way. Summarize the project. Designate a contact person for any questions about the project. Once again, a well-written letter is likely to get you extra points in the reader's mind. Make certain that all your spelling and grammar is correct. Typical title page contents include: Project title. Name and address of the organization submitting the grant proposal. Name of the prospective funder. Beginning and ending project dates. The total amount requested. Some RFPs require a letter of intent that precedes the submission of a grant proposal. These can be challenging to write, as they are basically an abstract for the proposal. Therefore, it is helpful to have a clear purpose, identified need, and a strategy for addressing that need ahead of time. Have those things in mind as you research RFPs United States Environmental Protection kl a m Agency 30 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide so you can identify agency missions and grant opportunities that match the interests of your program or project. An abstract is related to, but different from, the letter of intent. The abstract includes a summary of the problem/need, overarching goals, and implementation and evaluation methods, as well as a final paragraph describing the organization's capacity for carrying out the proposed project. An RFP may limit the number of pages an abstract can be, but a good rule of thumb is no more than two pages. Statement of the Problem/Needs Statement The needs statement is one of the most powerful components of your grant proposal. This is where you can grab the reviewer's attention and make the case for funding needs. So, do your homework before writing this section. Know the community (e.g., demographic and socioeconomic characteristics), the extent of the problem, and if any previous or existing efforts have targeted the same problem. Your problem or needs statement should: Document the problem you want to address You can use text, statistics, graphs, and charts. Describe the causes of the problem or the circumstances creating the need. Identify approaches or solutions attempted to date, based on a review of literature when possible. Use existing data sources to document the problem, such as city, county, state, and national census data. If the existing local data for your needs/problem statement is not easily available, you may need to conduct qualitative research (e.g., telephone interviews, focus groups, self-administered surveys). Project Description Once you have captured the reviewers' attention by clearly documenting the need for funding, present the details of the program implementation plan. This section of the proposal should guide the reviewer through all the activities needed to accomplish your goal. Furthermore, refer to your project description over the course of program implementation. Even if program staff changes overtime, the project description should provide a road map to follow. The project description should include three main pieces of information: goals, objectives, and methods. United States Environmental Protection kl a m Agency 31 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Goals and Objectives Goals and Objectives are a very important piece of your grant proposal. Goals are broad statements with a long-term, ideal outcome. Most proposals do not have more than three goals. For each goal, develop numerous corresponding objectives. Objectives are specific statements that will show the reviewer exactly how you plan to achieve your goals. The best objectives have several characteristics in common. Well-written objectives are: Specific. They specify what you want to achieve, by how much, and when. Measurable. Information concerning the objective can be collected, detected, or obtained from records. Achievable. Not only should the objectives themselves be possible, but the organization should also be likely to pull them off. Relevant to the mission. The organization should have a clear understanding of how these objectives fit with the overall vision and mission of the group. Timed. The organization should develop a timeline (a portion of which is made clear in the objectives) for achieving goals. Challenging. They encourage the group to set its aims on significant improvements that are important to community members. Once you are comfortable drafting objectives, determine whether they are "process" objectives or "outcome" objectives. A process objective measures the tasks completed as part of the implementation of a program, while an outcome objective measures long- term results or a program's impact. Methods A sense of clarity and specificity will come after you draft the proposal objectives. The next step in the proposal writing process is to break down each objective into a series of activities needed to achieve it. The methods section describes in detail how to carry out your goals and objectives over the course of a project. When writing the methods section, be sure to: Keep the sequential order of tasks in mind. Make sure that the activities described are cohesive, so reviewers see that you know how all pieces of the puzzle fit into the big picture. Include a flow chart of the sequence of events, if applicable to your situation, in addition to a timeline chart, which is usually required. United States Environmental Protection kl a m Agency 32 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide jq Evaluation Plan The purpose of the evaluation plan is to show how you will measure the success of process and outcome objectives. Be sure that the plan includes details about how information will be collected and analyzed. Describe how and when evaluation findings will be shared with the funder. The Need for a Program Evaluation Plan in a Grant Proposal There are two main types of evaluation: process and outcome. Your project will dictate which type of evaluation you use. Use a combination of both approaches depending on the types of objectives you draft. Process evaluation assesses the implementation of a program, emphasizing activities to be completed. Outcome evaluation assesses the short- or long-term impact of a program. Evaluations can be complex and time intensive. Unless you can afford to budget for an evaluation consultant, design the evaluation plan within the strengths and limitations of program and staff resources. S Budget Request and Budget Justification The detailed information for the goals and objectives, methods, and evaluation plan will serve as the foundation for the budget request. You will now need to assign corresponding dollar amounts to staff positions and activities. Common budget line items for budget requests include: Staff salaries Taxes Fringe benefits Indirect costs In-kind items Rent and utilities Equipment and supplies Postage Travel In the budget justification, clearly describe the need for each line item total requested. In one or two sentences per budget line item, show the reviewer exactly how you arrived at the total for an item. Tips to consider when making the budget: Make sure the budget does not exceed the maximum amount stated in the RFP. United States Environmental Protection kl a m Agency 33 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Ensure that the numbers in the proposal narrative and budget justification text match those in the line-item budget. If you are required to submit budget projections for multiple years, include cost of living raises in staff salaries and allow for inflation among supplies and utilities. If you are inexperienced with a proposed activity (e.g., conducting focus groups), talk with someone who has done this to learn how much to budget for. You may learn about costs that you did not anticipate. It is better to discover those before you submit your grant proposal than after you are working within a set budget that could require that you reduce the total number of activities or exclude some altogether. jq Applicant Qualifications Use this section of your proposal to convince the reviewers why this project should be funded. You may be requesting funding for a problem or need that is already well documented. While reviewers may need no convincing that the issue is important or timely, they have a limited amount of funds to award. What makes your qualifications, approach, or strategy better than the competitors'? Include the following information in the applicant qualifications section: Describe the organization's mission, history, and existing experience. Emphasize the organization's strengths and current contributions to the field or community in the relevant topic area. Highlight links to community collaborators and other resources. Obtain letters of support (or letters of participation) for the proposal appendices from the same collaborators you mention in this section. jT) Future Funding Plans/Plans for Sustainability Funders often want to see a long-term plan for the self-sustainability of a project. The reasons for this vary. For example, funding may only be available for a couple of years. Some programs require a match of funding from the beginning. Funders will want to know how grantees' matching funds will be provided and sustained. Some initiatives will need to be in place for years if they are to have a long- term impact on outcomes such as health status indicators. jQ Appendices Appendices are supplemental materials that do not belong in the body of the proposal, but nevertheless are important pieces of information, such as: A marketing or dissemination plan schematic. United States Environmental Protection kl a m Agency 34 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide A project staffing flow chart. A timeline chart of proposed activities (include this in the body of the proposal instead of or in addition to here). An evaluation instrument (e.g., a survey). Any existing educational or printed materials to be used. Bios, resumes, or curricula vitae for key project personnel, including advisory board members and any consultants already identified. Letters of support and/or participation. One-page letters of support/participation should be submitted on official letterhead from each partnering organization that you have proposed as a collaborator. Letters should be signed by an executive director or chief executive officer of the collaborating agency. You may want to draft the letters for each collaborator (in fact, they may request that you do this), but make sure each letter is unique to your working relationship and shared interests. Highlight the significance of the proposed collaborative relationship in the context of proposal goals and objectives. Most grant evaluators will want to know each individual partner's specific commitment and added value towards the grant project, so be sure these are not "chain letters," per se (otherwise, this could hurt instead of help). Make sure to summarize the collaborating agency's capacity and strengths for addressing the problem or need identified in the proposal. Grant Review Process Reviewers provide an analysis and rating of the quality of each grant application based upon the application requirements and selection criteria. When applying for a grant, it is important to follow the funders' specific guidelines exactly. Here's a general checklist you may wish to use: 0 1. Be sure to format and organize the grant headings exactly the way the RFP requests. Answer all the questions in the order listed and use the headings, subheadings, and numbers provided. Be sure to submit the number of copies the funder requests. ~ 2. Include a cover letter to introduce your organization and your request, and to make a strategic link between your proposal and the funder's mission and grantmaking interests. ~ 3. Grant proposals should be typed and look professional. Make sure the grant is easily readable (e.g., the font size is not too small). ~ 4. Keep an electronic copy of the proposal for future reference. This can be adapted or modified for future proposals. United States Environmental Protection kl a m Agency 35 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide ~ 5. Find out if you need to register to apply. Contact the funder to let them know the organization is applying or set up a profile before submitting a grant. For example, federal grants need a Data Universal Numbering System (DUNS) number. If any of these steps are required, make sure you complete them well in advance of the grant's due date. If you contact the funder's agency, be sure to state not only your name, but also the group you are with. Q 6. If the funder conducts pre-assistance calls or webinars on the funding opportunity and the application criteria, attend one or more of those. This will help your organization gain a stronger understanding of the grant/funding opportunity. Being incorrect on one requirement (e.g., page length, one criteria) could cost you, as funding opportunities can be extremely competitive. ~ 7. Find out if the grant needs a letter of intent and submit one by the due date if required. ~ 8. Determine if you need letters of support or if you need potential partners to sign a memorandum of understanding. ~ 9. Pay attention to how reviewers are going to score various aspects of the grant and give higher priority to areas that are more heavily weighted (e.g., proposal length). ~ 10. When writing the grant, use bold or italics to emphasize key points. ~ 11. Note that you may need to include the following in the appendices: proof of nonprofit status, a staffing overview or organizational chart (including board, staff, and volunteer involvement), and an audited income or expense statement. ~ 12. Once the grant is written, review it for clarity and consistency. Although grant applications are often a team effort, the final grant application should have one voice. It should read as if it were written by one writer. ~ 13. Make a strong case for the overall significance of the proposal and prospects for success. State why this project should be done 1) at all, 2) in this community, 3) at this time, and 4) by this organization. ~ 14. Ask the funder questions, if neededbut read the application thoroughly and think before asking. United States Environmental Protection kl a m Agency 36 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide ~ 15. Be very thorough and careful when uploading your grant package to the funder's website. Submit it well before the deadline to allow for unexpected problems (i.e., internet is down). We suggest never submitting your package at the last minute (i.e., 11:59 p.m. the day the grant is due). If you catch a mistake after the deadline, then all the hard work of writing the grant is lost. Most foundations and federal agencies will not allow you to resubmit if pages or grant elements are missing or uploaded incorrectly. Depending upon when the next grant cycle is, you may have to wait up to one to two years to apply for it again. ~ 16. If your organization is granted funding, there will likely be periodic reporting requirements to the funding agency. Module 6 Day 2: Activity: The Good, Bad, and Ugly of Grant Applications Objective: Review different applications to determine whether they meet the grant requirements. Activity You will see several grant applications that have been reviewed and processed. For each grant application, you will identify what is correct and incorrect in the application. ^ Criteria for a Good Grant Proposal Most funding agencies apply similar criteria to evaluating proposals. We discuss these below. It is important to address these criteria directly in the case for support. A proposal that fails to meet them will be rejected regardless of the quality of its source. Otherwise, there is a danger of unfairly favoring well-known applicants. Major Criteria Here are the major criteria against which many proposals are judged. Read through your case for support repeatedly and ask whether the answers to the questions below are clear, even to non-experts. Does the proposal address a well-formulated problem? Is it a research problem, or is it just a routine application of known techniques? Is it an important problem? Will its solution have useful effects? United States Environmental Protection kl a m Agency 37 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Is special funding necessary to solve the problem, or to solve it quickly enough? o Could it be solved using normal laboratory resources? Do the proposers have a good idea on which to base their work? o The proposal must explain the idea in sufficient detail to convince the reader that the idea has substance, o It is not enough to merely identify a wish list of desirable goals (a very common fault). o There must be significant technical substance to the proposal. Does the proposal clearly explain what work will be done? o Does it explain what results are expected and how they will be evaluated? o How will one judge whether the work was successful? Is there evidence that the proposers know about the work others have done on the problem? o This evidence may take the form of a short review or representative references. Do the proposers have a good track record of doing research and publishing it? o Cite a representative selection of relevant publications by the proposers. o Absence of a track record is not a disqualifying characteristic, especially in the case of young researchers, but a consistent failure to publish raises question marks. Module 6 Day 2: Lesson 6: Financial Sustainability Objective: You will develop a financial sustainability plan for continuing your community or organization's goals. ^ Financial Sustainability A financial sustainability plan is a tool used to help an organization or initiative reach its goals and thrive. It will also assist in creating a sustainable community initiative. A plan allows for easier transitions, makes you more competitive in your field, and provides increased focus on your "real" work. Have the team that developed the budget develop the sustainability plan. Let supporters, funding agencies, and members know what is being done. This allows for a more transparent process, and partners may provide good suggestions for your plan. Conduct an internal audit to determine the amount of money needed and current projects. United States Environmental Protection kl a m Agency 38 ------- More Than a Little Change: Module 6 Identification of Financial Sources Participants' Guide Set objectives, review available possibilities, and follow up on the most promising options. Develop a draft to give to the partners initially notified of the sustainability plan. Review and incorporate comments into the plan. Remember that implementation, review, and evaluation are continuous, as planning never stops. Who should plan for financial sustainability? Individuals Businesses Governments Communities Organizations Churches Why should you complete a plan for financial sustainability? To ensure finances are secure. To increase focus on the real work. You organization can do more of what it set out to do because it can focus on the mission, not just on finances. To become more competitive in the field. More money allows you to hire more and better staff, which allows you to do more work towards your mission. To ease transitions. A plan can assist the organization in successful transition when current funding is depleted. To follow guidelines. Some funders require a plan for financial sustainability as a condition of their grants. By having a plan already developed, you will be one step ahead. When should you plan for financial sustainability? The earlier the better! Start from the beginning. If your organization has been around for a while, a complete overhaul may be needed. Periodically look over the plan and revise it to fit your current needs. How should you plan for financial sustainability? Think about what the organizayion really needs and wants, o Set goals. United States Environmental Protection kl a m Agency 39 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide o Think about what taking or earning money in different ways will say about your organization. For example, will a high membership fee deter lower income people from joining? Decide who will develop the plan. o Designate a sustainability committee, board members, or a temporary working group. Be transparent to members about activities, o Build trust. o Receive suggestions. Conduct an internal audit. o How much money is currently available? o How much money do you expect to have in the coming year, two years, etc.? o Where is the money coming from? o What will you do with it? How much money goes to programs, staff, etc.? o How much debt do you have? o Note that some funders or grants require an independent financial audit. Determine how much money you need, o Look at what the orgnization is doing. o Think about what the organizations hopes to do in the future, o Make a list of essential things your organization should be doing, o Determine a bottom dollar amount of the things that must be done for the organization to be successful. Decide how much money the organization wants, o Dream about the future of the organization. o Talk with others about the goals they want to accomplish through the organization, o Make a wish list. o Write down a list of what the organization will need over what period to make the vision happen. What will it take (in terms of resources) to accomplish these goals? Does the organization need more staff and/or better trained staff? A new building? Next to each item, write down an estimate of what that would cost. Break the list down into first year costs, second year costs, etc. Write this down over a five-year period of time, or even longer. United States Environmental Protection kl a m Agency 40 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Tips for Continuing Financial Sustainability Network to stay informed about what's going on and develop connections with others. Designate someone in your organization to take on the task of scouting and tracking opportunities that might be available. Consider hiring someone to write grants for the organization. This can be worth the expense if your grant writer is good, especially if they are willing to work at least partly on commission. You might also find a sympathetic local professional with background both in grant writing and in the content area to review your proposal for form and content. This being said, ensure you have numerous internal and external editors to supplement the grant writer to help with the quality, clarity, and obedience to the grant criteria. If tax exemption is needed and you are not tax-exempt yourself, find another like-minded, tax-exempt organization to make a formal grant application for the organization. That same group, often called a lead agency, may also manage grant funds received. Make everyone's roles and responsibilities very clear. Get to know your local politicians well enough that they return your calls and understand your issue and its importance. Diversify your funding so you aren't completely dependent on any one form of support. Ensure continuity. Stick to the mission and keep doing what has been done. It's helpful to have consistent people, consistently going out doing the same things. Consistency helps create a local base of support. Successful fundraising often depends upon being in the right place at the right time, over and above the actual merits of the proposal. Funding deadlines are often short. Stay connected with possible funding sources, and develop ideas and action plans so that you can be ready to move quickly when the right opportunity comes your way. Module 6 Day 2: Summary: Synopsis of Day 1 and 2 Objective: Review key topics and learning objectives. ^ The goal of module 6 was to provide you with a clear understanding of what to include in a budget and the need for financial management. After module 6, you should be able to: United States Environmental Protection kl a m Agency ------- More Than a Little Change: Module 6 Identification of Financial Sources Participants' Guide Describe a plan for financial management. Create a budget for the upcoming year that takes into consideration the community dreams identified in module 2. Collaborate and communicate with other community organizations to enhance your organization's resources. Identify ways to develop financial resources for your organization. Sustain your organization by ensuring effective leadership during transitions, managing your funds wisely, staying organized, communicating with stakeholders, and retaining committee members Homework Assignment Objectives: Complete the appropriate columns in the action plan. Prepare for the piranha bowl presentations Background There is a reality television show that has aspiring entrepreneur contestants make business presentations to a panel of investors. The show features a panel of potential investors who consider offers from aspiring entrepreneurs seeking investments for their business or product. The entrepreneur can make a deal on the show if a panel member is interested. However, if all the panel members opt out, the entrepreneur leaves empty-handed. The investors often find weaknesses and faults in an entrepreneur's concept, product, or business model. Many deals made on the show are never enacted due to the investor's vetting process, which includes product testing and reviewing the contestants' finances. Applying the Concept to the Piranha Bowl Like the show, EJ Academy participants will be placed in front of potential investors. Instead of participants pitching their next business venture or product, they will be persuading these stakeholders to invest in their plan for their community. This exercise will prepare the participants to pitch their action plan to actual investors and stakeholders in the future. Participants will prepare for this activity in the module 6 homework. Participants will complete a budget for their project plan and search for potential grants to apply for investors. They will imagine that the panel consists of the grant reviewers or investors they identified for homework. Furthermore, they will work with their accountability United States Environmental Protection kl a m Agency 42 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide partner to develop their 2-minute pitches for their community's environmental justice challenge. The piranha bowl will be a 90-minute activity in which each participant will present their pitch for 2 minutes and the panel of "piranhas" will have 2 minutes to ask questions and make comments. This activity will be held in two sessions and participants will have time beforehand to prepare their presentations or set up necessary materials. The presentation may also be recorded to provide better feedback if necessary later. Module 6 Homework The instructions for the homework can be found in Appendix E. Bonus Activity Objective: Attend a grant writing workshop or training. H Find and attend a grant writing workshop in the regional area. United States Environmental Protection kl a m Agency 43 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Appendices United States Environmental Protection kl a m Agency 44 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Appendix A: Additional Resources University of Kansas Community Tool Box. Generating, Managing, Sustaining Financial Resources, Chapter 42, Section 1: Developing a Plan for Financial Sustainability: https://ctb.ku.edu/en/table-of-contents/finances/grants-and- financial-resources/financial-sustainabilitv/main University of Kansas Community Tool Box. Generating, Managing, Sustaining Financial Resources, Chapter 42, Section 5: Writing a Grant: http://ctb.ku.edu/en/table-of-contents/finances/qrants-and-financial- resources/writinq-a-qrant/main University of Kansas Community Tool Box. Generating, Managing, Sustaining Financial Resources, Chapter 43, Section 1: Planning and Writing an Annual Budget: http://ctb.ku.edu/en/table-of-contents/finances/manaqinq- finances/annual-budqet/main University of Kansas Community Tool Box, Module 14: Applying for Grants: https://ctb.ku.edu/en/applvinq-for-qrants University of Kansas Community Tool Box. Managing Your Money: http://ctb.ku.edu/en/table-of-contents/finances/manaqinq-finances/manaqe- monev/main University of Kansas Community Tool Box. Developing a Plan for Financial Sustainability: http://ctb.ku.edu/en/table-of-contents/finances/qrants-and- financial-resources/financial-sustainabilitv/main University of Kansas Community Tool Box. Planning and Writing an Annual Budget: http://ctb.ku.edu/en/table-of-contents/finances/manaqinq- finances/annual-budqet/main Dictionary of History and Ideas, edited by Philip P. Wiener. Published by Charles Scribner's Sons, 1968-73. Definition of financial management: http://manaqementstudyquide.com/financial- manaqement.htm Capital requirement definition: http://www.investopedia.eom/terms/c/capitalrequirement.asp#ixzz3pnAEcPnA Sample organizational budget: https://eiusa.org/wp-content/uploads/Sample- Orqanizational-Budqet.xls Federal Sources Circulars on grant management for nonprofit organizations: https://www.wh itehouse.qov/omb/information-for-aqencies/circulars/#educational EPA resources for businesses and nonprofits: https://www.epa.gov/resources- small-businesses United States Environmental Protection kl a m Agency 45 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Information for grant seekers: https://candid.org/improve-vour-nonprofit7fcrefHr Tax exemption information for registered nonprofits: http://www.irs.gov/pub/irs- pdfZp557.pdf Common types of grants: https://mcf.org/common-types-grants Health Grantmakers in Health (GIH) is a nonprofit, educational organization dedicated to helping foundations and corporate giving programs improve the health of all people. You must become a member to get full access to information: https://www.gih.org/ Global Fund to Fight AIDS, Tuberculosis and Malaria: https://www.theglobalfund.org/en/ Poverty Worldwide Initiatives for Grantmaker Support (WINGS). Dedicated to philanthropy and a culture of giving, they provide mutual learning, support, and knowledge sharing: https://wingsweb.org/ Administration for Children and Families. Responsible for federal programs that promote the economic and social well-being of families, children, individuals, and communities: https://www.acf.hhs.gov/ Women's Health and Development Women in International Development. A compilation of web pages with funding opportunities for women in international development: https://womenindev.com/ Global Fund for Women. International network committed to equality and social justice for women by awarding grants to women's groups around the world: https://www.globalfundforwomen.org/ Regional Funding Sources: United States and North America Candid. Maintains a comprehensive database on U.S. grantmakers and their grants. Provides access to free resources through five regional libraries and a network of over 400 funding information centers: https://candid.org/ Grants.gov. This website, run by the U.S. government, is a central storehouse for information on over 1,000 grant programs. It provides access to approximately $500 billion in annual awards. Agriculture United States Department of Agriculture. Contains information on research, as well as tips on grant writing and updated information on requests for applicants: https://www.usda.gov/ United States Environmental Protection kl a m Agency 46 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Environmental Environmental Grantmakers Association. Helps member organizations become effective environmental grantmakers through information sharing, collaboration, and networking: https://eaa.ora/ Grantmakers Without Borders. Dedicated to increasing funding for international social justice and environmental sustainability initiatives: http://www.internationaldonors.org/ Environmental Protection Agency (EPA). Contains research and information related to the environment that can aid in the grantmaking process: https://www.epa.gov/ Echoing Green. Provides seed money to social entrepreneurs who want to make a positive social change: https://echoinggreen.org/ Grant Writing/Grant Seeking Foundations: Refer to www.Philanthropy.com Fundsnet. A compilation of grant writing and fundraising services at no cost; includes various categories of interest: https://fundsnetservices.com/ The Grantsmanship Center. Offers grantsmanship trainings and earned income strategies for nonprofits: https://www.tgci.com/ National Service Resources. Provides general grant resources as well as grant opportunities by category: https://egrants.cns.gov/espan/main/login.isp United States Environmental Protection kl a m Agency 47 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Appendix B: Glossary Accounting The method by which one keeps track of and manages money. There are various accounting systems that an organization can use, but the goals of all of them are to assure accurate records and help organizations know exactly how its money is being spent and how its financial position compares to its budget. Audit A certified public accountant (CPA) checks organizations' financial records to make sure they are accurate and works with organizations to correct errors and solve problems. The CPA then prepares financial statements using the organization's books, and either certifies that the organization follows acceptable accounting practices and that its financial records are in order or explains any problems with the financial records and suggests corrective measures. Balanced budget Projected expenses and projected income are approximately equal. Budget deficit Projected expenses are significantly greater than projected income. Budget surplus Projected income is significantly greater than projected expenses. Budget An amount of money available for spending that is based on a plan for how it will be spent; a plan used to decide the amount of money that can be spent and how it will be spent; or an official statement from a government about how much it plans to spend during a particular period and how it will pay for expenses. Capital requirement The standardized requirements in place for banks and other depository institutions. These requirements determine how much liquidity is required to be held for a certain level of assets through regulatory agencies such as the Bank for International Settlements, the Federal Deposit Insurance Corporation, or the Federal Reserve Board. These requirements ensure that these institutions are not holding investments that increase the risk of default and that they have enough capital to sustain operating losses while still honoring withdrawals. Conservative estimation Using the highest reasonable figures when estimating expenses and the lowest reasonable figures when estimating income, so you will be more likely to create a budget that will keep you from overspending. Financial manager A financial manager provides financial advice and support to clients and colleagues to help them make sound business decisions. Financial management Planning, organizing, directing, and controlling financial activities, such as procurement and use of funds in an enterprise. It means applying general management principles to the financial resources of an enterprise. Fiscal year This term means financial year. It is the calendar you use to figure your yearly budget (e.g., July 1 to June 30) and which determines when you file tax forms, get audited, and close your books. United States Environmental Protection kl a m Agency 48 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Fund accounting The practice of keeping a separate record of the expenditures for each separate grant or contract administered by an organization. For example, a grassroots AIDS prevention initiative might keep separate records for funds they receive from the Department of Health, the Department of Social Services, the Department of Welfare, a local community foundation, and the AIDS Action Committee. Grants Monetary awards to a group or organization to carry out a community project they have proposed. In real life, grant awards are sometimes given in resources other than cash (e.g., travel expenses, time off). Occasionally, especially for research, grants are made to individuals as well as groups. Line item An expense category (e.g., salaries, phone bills, office supplies). Line-item budget Generally, a budget that specifies how much of the funder's money will be spent on each line item. It could also refer to any budget that is broken out by line item. Projected expenses The amount of money you expect to spend in the coming fiscal year, broken down into the categories you expect to spend it in (e.g., salaries, office expenses). Projected income The amount of money you expect to take in for the coming fiscal year, broken down by sources. In other words, the amount you expect from each funding source, including grants, contracts, fundraising efforts, memberships, and sales of goods or services. Procurement The act of getting possession of something; the act of obtaining or buying goods and services. The process includes the preparation and processing of a demand as well as the end receipt and approval of payment. Spreadsheet A grid format for creating a budget to see expenses, income, and the ways they interact all in one place. In a budget spreadsheet, each vertical column represents a funding source, and each horizontal row represents an expense category. In the space where a column and row meet (called a cell), a number represents the amount of money from that column's funding source spent on that row's expense category. Sustainability Involving methods that do not completely use up or destroy resources, including financial resources; able to last or continue for a long time. United States Environmental Protection kl a m Agency 49 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Appendix C: Activity: Budget Outline Budget Outline Activity Sample Spreadsheet M-J M f\ f \ y~i f~v » J-jO /lL UUt /lly | START | 1/1/2M6 | PERIOD LENGTH {IN DAYS] | a | END DATE | JfaS/ZDB oi-J AN 31-JAN cz-MAR oi-APR oi-MAl" 31-MAY 30-JUN 30-JUL 29-AUG 28-SEP 28-OCT 27-NOV 27-DEC 26-JAN 25-FEB 2-MAR 26-APR 26-MAY TOTAL TREND NET INCOME $ - $ $ - $ - $ - $ - $ ¦ $ - $ $ - $ - $ - $ ¦ $ - $ - $ $ s - $ income $ $ s 000 000 TOTAl INCOME $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ $ - $ - $ - $ expenses % 000 000 000 000 000 000 000 000 000 000 000 000 000 000 000 000 000 TOTAl EXPOSES $ - $ - $ - $ - $ - $ - $ - $ -$ - $ - $ - $ - $ - $ - $ - $ - S - $ - 5 A United States Environmental Protection ^1 l m Agency 50 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Appendix D: Activity: Identify Potential Funding Sources Potential Financial and Community Resources Resource Purpose/Grant Program Amount Eligibility Deadline Contact Information Website A United States Environmental Protection ^1 l m Agency 51 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Appendix E: Homework: Piranha Bowl This exercise will prepare you to pitch your action plan, program, or project to actual stakeholders or potential investors during the graduation and networking reception. You are encouraged to work with your accountability partner to develop your 2-minute pitches for your respective community environmental justice challenges. Although you may collaborate in preparing your presentations, each person will present separately unless you are working together in the same organization, project, or program for which you are seeking a potential partner. Each person will have 2 minutes to present their pitch, followed by constructive feedback from the panel of piranhas. Participant Instructions It is important that you stick to your 2 minutes to allow all participants time to present their pitch and forjudges to provide constructive feedback. You should include the following in your pitch to the panel: Mission or vision * - Reference module 2 Highlight current project/plan - Goals - Action steps - Reference module 2 Why is it important? Time: 1 minute - Why is your project important to you and your community? - Reference module 2 * Current partners (optional) * - Mention at least one potential partner - Describe how they will assist with goal - Build credibility - Reference module 5 Budget/financial investment - Create a budget for your project - Research actual costs - Determine three potential grant or financial investors (do not mention in presentation) - Reference module 6 Time: 1 minute United States Environmental Protection kl a m Agency 52 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide We recommend using visual aids such as diagrams, posters, or short PowerPoint presentations. You should bring a one- to two-page document that includes the required points for your community to give to the panel and review before the presentation. You should have your pitch memorized; however, you can have note cards as a reminder of your talking points. Piranha Bowl Evaluation Criteria Comments (If you need more space, please attach a separate sheet of paper noting the participant presentation number, date, and your name) Score Persuasive presentation Well-developed plan Clear, concise explanation Inclusion of required elements (mission/vision, project plan, importance, and budget/financial investment) Volume Eye contact Confidence/poise Total United States Environmental Protection kl a m Agency 53 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Closing: Lessons Learned and Tips Here are some example pitches: Bad (because it requires translation for those people outside the nonprofit community): I'm the executive director for the Stop Homelessness Coalition of the greater District of Columbia metropolitan area, which maintains facilities that provide shelter for homeless constituents. Our client-focused educational process creates an environment that fosters dignity and provides value for not only our clients, but also stakeholders and the community at large. Application of these principles... [continuing for 30 seconds]. Worse: Anything that goes over a minuteeven if it isn't using lofty "nonprofit-ese" wording. Good: I'm the executive director for a nonprofit that runs homeless shelters. [Pause.] We help about 1,300 people per night get out of the cold during the winter months and team up with other nonprofits to provide food for them. [Collect a thought.] What makes us different is that we have a successful job training program that helps many homeless families get back on their feet. Here's my card. If you'd like to see what we do, check out our website. Handing off the card is also vital, especially if you have a great website that really tells your organization's story in words, pictures, and videos. The keys to a good elevator pitch are brevity, plain language, and repetition. Write it down. Rehearse it. Practice it on the other staff members or volunteers. Get feedback. Ask to hear their elevator pitches. Make it fun. United States Environmental Protection kl a m Agency 54 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Appendix F: Sample Organizational Budget See this link for another copy of the sample budget: https://eiusa.org/wp- content/uploads/Sample-Orqanizational-Budqet.xIs Organization Name: Fiscal Year (FY) Period: Current Current Previous Previous Org. YTD FY FY Budget Actuals Budget Actuals Revenue Government grants and contracts Foundations Corporations Religious institutions United Way, combined federal, and other federated campaigns Individual contributions Fundraising events and products Membership and program income Other Total cash revenue Total in-kind revenue Total Revenue Expenses Personnel Salaries Director Victim advocate Clerical support Personnel total United States Environmental Protection kl a m Agency 55 ------- More Than a Little Change: Identification of Financial Sources Module 6 Participants' Guide Organization Name: Fiscal Year (FY) Period: Current Current Previous Previous Org. YTD FY FY Budget Actuals Budget Actuals Benefits Federal Insurance Contributions Act (FICA) tax Worker compensation Insurance Benefits total T ravel Travel total Office supplies General office supplies Office supplies total Equipment Computers Vehicle maintenance Equipment total Other Rent/lease Meeting space Internet and phone service Website hosting Other total Total Expenses United States Environmental Protection kl a m Agency 56 ------- |