Last time, we discussed a few grant writing reminders from my recent peer review panel experience with the Wisconsin Arts Board. I have a few more, but I also thank those who commented with other grant pet peeves and ideas. Here we go, round two:
1. Anticipate the reviewers’ questions.
I know that the letter of the law may ask you to just submit your financial statement or Form 990, but if there are issues that may cause questions on review, don’t be afraid to answer them, even if you think it may not look good. As your mother always told you, what you imagine is much worse than the truth. If your donations went way down one year because you lost a major funder who moved on to someone else, say so. If you had to fire someone and you experienced some disarray because of this, it’s better to be honest about it. You can answer questions truthfully without airing dirty laundry, and how you solve problems like these shows a lot about your organization.
2. Get your financial information from someone who knows something about the arts and not-for-profit accounting.
A common mistake, especially for smaller organizations who often can’t afford to pay for financial services, is that accounting is accounting and anyone who has had any accounting training will know how to organize a not-for-profit bookkeeping system.
This. Is. Not. True.
Make sure whoever is putting together your financial statements understands that you need to properly segregate contributed income from program service/earned income (ticket sales, tuition, gift shop) and that you have your restricted funds segregated on your balance sheet (don’t know what restricted funds are? If your accountant doesn’t either, find one who does). It’s also essential to use proper accounting terminology to avoid misunderstandings. Many use the term “fund-raising” (incorrectly) to mean revenue generating activities outside of your mission activities (for example, a gala special event or candy sales) but these activities should be separate from donations, grants and other contributed income. And, FYI, when the form 990 mentions “fund-raising expenses,” it means your expenses raising contributed income – not the expenses of executing a special event or the wholesale candy expense.
If you use accounting software, use a nonprofit module or program. Quickbooks doesn’t allow for categorizing of contributed income, so unless you know how to program a chart of accounts, it won’t give you what you need.
3. Give reviewers the tools to assess your organizational health.
Here’s what reviewers look for in determining organizational health:
- The ratio of earned to contributed income. A high amount of contributed income vs. earned may mean that donors support your mission and want to help make your work accessible, but it may also mean that audiences just aren’t interested and true believers are propping up the organization.
- Wide variances between budget and actual, and year to year. ‘Splain, please.
- An appropriate mix of artistic and administrative expenses. Many organizations, particularly small ones, put all of their eggs in the artistic basket, spending their entire budget on artistic directors, guest artists and performing spaces. But if there is no money in the budget for marketing or otherwise supporting the art, the organization struggles.
- A board that understands what its role is. A board is not a collection of super volunteers. It is a governing body. We need to see evidence that the board is not just slave labor for an artistic director — we need to see that there is a strong collaborative effort to make the big decisions, plan for the future and evaluate current programming.
4. Understand where the money is coming from and speak to that.
If you are applying for government funds, that money comes from taxpayers. Therefore, the grantor needs to know that you are spending those funds to serve taxpayers. All of those questions about your community engagement are not just political correct-speak – it is just a simple fact that what you do must serve your community in order for you to successfully get this particular grant. And no, despite the rhetoric about the benefits of art to communities, you do not serve the community simply by existing. Let me repeat that for the back row. You do not serve the community simply by existing. And I hate to be harsh, but you also do not serve the community by occasionally giving tickets (that will probably go unused) to at-risk schools. Serving the community, in fact, does not mean “reaching out” to people who are different than you are. Serving the community just means that you are minimizing barriers to participation, you are engaging your community in your art, and you are responding in some way to what your community needs, rather than expecting the community to support you so you can do exactly what you want to do without accountability.
This one is so important that I may write more about it later. In the meantime…hope you all are able to have a few Thanksgiving-y days off to indulge in rest, family and feasting!