pic by grassroots international

Private sector philanthropic giving with a focus toward nonprofits who are grassroots is a means for knowing the donation will have local geographic reach.

The initial investment in the grassroots approach should be viewed like the planting of tree seedling.  The donor plants the seed of their idea.  The donor provides ongoing giving for a set number of years.  It should be the intent of the donor’s reasoning behind giving to be willing to be involved in the effort long enough to build strong roots for the grassroots nonprofit idea to have a foundation and the strength to grow branches.

The direction of the branches will be pruned in the direction of strengths.  The nonprofit should be open to being provided direction on prioritization and direction the donor wishes the support should grow.  The nonprofit should accept this direction especially if it falls within the mission of the organization.

Grassroots nonprofits have as a catalyst the strength of passion and volunteers.  The nonprofit with appropriate planning should be able to know strategically how their organization is to cover fixed costs, including staffing.  It should be the goal of the nonprofit to have each year an understanding of how they are going to have the funds to cover the approved budget for the year.  After five years it should be expected that the nonprofit knows how their financial support is being covered.  A nonprofit should include in its planning whether there is an opportunity to have members, user fees, a reserve or endowment to cover 75% of the expenses and fund-raise for the rest.  If there is a persistent 10-25% shortfall in spending it is usually attributed to providing raises each year to administrative staffing.  Is is with this in mind that outsourcing for nonprofits below three and a half million dollars that a donor should request the nonprofit do.

The use of the word “grassroots nonprofits” is to bring about a more powerful impact quickly to the cause at hand.  Nonprofits are created to address a cause.  The main weight for deciding a budget should be what the nonprofit can afford to do with its two main assets of cash and volunteers.

Throughout all of the nonprofit’s activities there has to be accountability.  A regulatory perspective of the nonprofits interaction with governing bodies, government agencies and financial intermediaries that require administrative forms, records sent or financial records distributed to others will fall to the designee or default to the Board officers.  The interaction requires time to contract with auditors for the annual audit of the nonprofit, and to ensure compliance with all respective laws, statutes and regulations.  The outsourcing of the service can provide an ad-hoc basis throughout the year when the Board and/or designated individual need the assistance.  A scheduling of the compliance work can be planned in order to be timely with the compliance.

Incorporating is the easy part for a nonprofit.  The hard part is annually keeping the donations from donors coming and expanding the donor base for giving.