Chapter 29: Starting-Up A Charity
(This is chapter 29 of "Up and Out," a book condensing my long experience about how to best help poor people. I pledged earlier to get it up online as soon as possible, so it would be available for free to everyone trying to cope with helping the Katrina evacuees.)
(These are not things that need to be done during the first part of this emergency. Rather, this is for the time after that, when Katrina evacuees will be moving from getting immediate emergency assistance to trying to normalize their lives. That is when good programs to help them "up and out" of their situation need to kick in. The following is for that time.)
(For other chapters, look under "Categories" and click on the chapter you want.)
UP AND OUT: A GUIDE TO TRUE COMPASSION FOR THE POOR"
PART II: MOVING UP AND BREAKING OUT OF POVERTY
Section 3: Getting Into Action
Chapter 29: Starting-Up a Charity
Getting started is usually the hardest part of all. It can seem impossible at first. It can even to continue to seem impossible, time after time, until the charity is well established and rolling along. Hopefully, this chapter will help in the start-up.
Charities are typically started by existing organizations, by groups or by individuals. An existing organization such as a church or another charity may decide to start a new charity. Or a group may be pulled together to start a charity more or less as a committee (usually, however, with one person initiating the effort.) Finally, an individual may start a charity, usually becoming the first Executive Director (ED), or perhaps Chair of the Board, of that charity.
If it is a faith-based charity, these people often feel God has called them to the task. These are often the best people to follow, since they are likely to be dedicated, persistent workers who seldom give up.
Step One: The Board
The first step for organizations, groups or individuals is to recruit the first, founding Board of the new charity. That is, the first step is to provide accountability.
a. Incorporation
First, a name should be chosen for the charity. A check should be made to make sure no other organization in the state has the same name. There will be a state agency to call for this service.
Then the Board should incorporate the organization as a charitable non-profit. Hopefully, there will be an attorney on the first Board who will take care of drawing up the application. Attorneys are likely to have a template of such an application. These will be different in every state.
Usually all the paragraphs of the Articles of Incorporation will be the same for every organization, with one exception. That will be the paragraph that states the purpose of the new organization.
That key paragraph is more or less a mission statement for the charity. It should be very carefully worded. Short is better than long. The mission statement should be in broad terms, rather than narrowly focused on details and particular tasks. That will keep the charity from being too limited in what it does in the future. It will also allow for changes in the mission of the organization as the future develops in unpredictable ways.
That paragraph should also be specific enough that the IRS will see some point in having a new charitable organization, when the incorporation documents eventually reach the IRS.
If it is to be a faith-based charity, its religious nature needs to be established definitely and clearly in that paragraph. If not, it may not be accepted legally as a religious non-profit later.
b. Choosing an Executive Director (ED)
That Board should also select an ED for the charity, except in the case where the future ED is also the initiator of the charity. In that case, the new Board has been recruited by the future ED, and already agrees that the founder should become the ED.
In other cases, the Board will have to raise the funds to pay an ED, then search for the right person. Finding an appropriate ED can be a problem. Good, experienced ED’s are likely to already be employed. Whether or not they are, they may be reluctant to risk employment with a start-up rather than an established charity. They may also shrink from the sacrifice, strain and uncertain future that can be expected from start-ups.
An additional problem is that a successful ED of an established charity may have no experience at all in start-ups. Such an ED may well flop in building a new charity from scratch. Search and selection of the first ED is an unusually difficult task for a Board.
Ideally, however, what the Board should hope to find is an ED who has successfully started at least one other charity. In addition, that charity should have had a good success rate.
If such a person cannot be found, the next best bet may be a good, highly capable person without experience in starting and running a charity to help the poor, but who also seems highly motivated, even driven, to do so. Experience in business, together with great familiarity with the inner workings of churches, would be crucial.
Step 2: The Executive Director (ED) starts work
Once the Board is formed, application for incorporation has started, and there is an ED, there are several steps that need to be taken at the same time.
a. Paying the Executive Director
If the ED is hired by an existing Board, the salary for the ED for at least a year should already be in hand before the hiring. Also, at or before the time of making a concrete job offer, the Board must disclose the exact financial situation of the charity, including the fact that there may be only enough for the first year’s pay and making it clear that further funding must be raised in order for the ED to be paid beyond the first year.
If the ED is the one starting the charity, that may be done in a couple of ways. The best one is to raise enough funds in advance to pay the salary of the ED for at least a year. That year of support should give the ED enough time to raise the other funds needed to keep the charity going, and to begin to hire other employees.
If that is not possible, there is an approach that is harder and takes longer. That is for the ED to work at something else for self-support, and to start the charity in his or her spare time. I have done it both ways.
What the ED of a start-up needs to understand is that the ED personally will perform any and all jobs in the charity, until enough money is raised to hire others, or until volunteers can be recruited and trained to do some of the work.
When others are hired, that will be one at a time as a rule. With each one, the ED can turn over some of the tasks the ED has been doing to someone else, and focus more on the principal tasks an ED should be doing. That is the same way, incidentally, that small businesses usually are started on a shoestring.
Step Three: Fund Raising
There are some basic ways to get started. First, it is hard to raise funds for a program that does not yet exist. But it can be done. There must be a good presentation of:
What the problem is.
What the charity is doing (or will do) about it.
What you are asking others to do to help.
These same three elements should form the basis of any presentation that is designed to cause others to want to help the charity, whether by funds, volunteering, support, word-of-mouth, or good will. It should form the basis of any message in brochures, speeches, fund-raising letters, letters of thanks for donations, newsletters, etc. These three elements should be committed to memory by the ED and everyone else involved in soliciting help for the charity.
a. Using Case Histories
Part of the second element, “what the charity is doing about the problem,” is using stories about individuals helped by the charity. These real stories make it personal for those who hear or read about the charity. They put a face on the problem. They make the problem more real. They show, in the lives of real persons, that there is hope for success in dealing with the problem. They are what will sell your program.
It is very important to see to it that these stories are totally true, not exaggerated in any way. Not only is it unethical to stretch the truth, it can cause tremendous problems as word begins to get around.
It is also necessary to have the written permission of the person being used as an example. That permission should cover the information contained about the person or family, as well as any photos used.
b. The First Fund-Raising Materials
First, the ED needs to rent a P.O. Box for the charity. Even if the charity already has an office, it is better to have a P.O. Box as a permanent business address. In that way, the charity will not have to throw away all its printed material if the office address ever changes. That is why most businesses get their mail at a P.O. Box rather than at their street address.
Second, the ED needs to get a phone number for the charity. If there are no offices yet, the ED may use his or her personal phone number for the time being.
Third, the ED needs to get a minimum order of business cards printed, as well as a minimum order of letterhead stationery and matching envelopes. Small self-addressed envelopes also need to be ordered. The address of the new P.O. Box should be the address on this material. The phone number should be the one already chosen.
c. Personal Notes
The ED needs to hand-write the original of a short note to all the ED’s personal acquaintances, saying briefly that the ED will be doing something new, and what it is. A pen with black ink and a broad point should be used. Copies should be made, then the name of each acquaintance needs to be hand-written at the top of each note. Envelopes should be addressed by hand.
No brochures or other materials should be enclosed. Not enclosing them at first is an excuse for a second mailing a few days later.
Then the ED needs to get a list from each Board Member of their personal acquaintances, get such a note from each of them and send them out in the same way. (The notes can all be gotten at a Board meeting.) The ED should do all the work, not leaving it up to the Board. That way, it will get done, and on time.
Later, brochures should be sent out to the same people who got a note from any Board member.
Some of these notes will bring in funding, even without the need for funds being mentioned.
The reason for giving the personal acquaintances of the ED and the Board an opportunity to give is that many people want to support charities, but prefer to give to people they already know. Some are always on the lookout for charities or ministries they might want to support. They will appreciate knowing about your being involved in a new charity.
The names and addresses from this first mailing will form the basis for the charity’s mailing list.
d. Brochures
The first brochure promoting the charity should be designed and printed. The message should follow the outline above: what is the problem is, what we are doing, what you can do.
This first brochure should not be fancy, and not expensive looking. It is the first one; looking a little amateurish is just fine. Since the new charity will not have much money, the brochure should not look as if it does. That could be counter-productive at this point.
A good way to begin is with an ordinary 8½ X 11 sheet of copy paper. Turn it sideways and fold it into thirds, for typing. Or on a computer, use the horizontal or “landscape” page setting and a three-column set-up.
The introduction goes on the first outside panel. Then the three inside panels can be used for the message. The other facing outside panel should be a blank for the receiver to fill out and send with a contribution, asking for the name, address and phone number of the donor and the amount of the donation. The middle outside panel is the mailing panel, for the return address of the charity and the address of the person to whom it is being mailed.
Once the brochure has been typed and any artwork added, it should be taken to a printer. The printer will re-fit the type to the panels, if asked, and help make it look better.
The printer can also help choose inks and papers. The paper should be heavy. All folding should be done by machine.
Whatever colors are chosen should be the colors the charity will use for other printed material in the future. Perhaps the letterhead and business cards ordered were blue ink on white paper. Those same colors could be used for the brochure, with heavy, shiny white paper. Or black ink on light gray or light beige heavy paper that is somewhat rough will look professional. None of these will cost as much as having anything that is full-color. Also, bright colored paper is not the kind of look you want; it will not look professional.
Not too many brochures should be ordered at first, since the basic brochure may change soon. More can always be ordered as needed.
e. The Second Mailing
When the brochure has been printed, the second mailing can go out to the same names the notes were sent to. A tiny hand-written note saying something like “Here’s what I am doing now” should be enclosed with the brochure. Again, the addresses on these envelopes should be hand-written.
f. Thank-you Letters
These should always go out within 10 days after receiving a donation. An ideal way is to have three parts:
A short message thanking the donor, and saying briefly what the charity is doing currently. This message can be changed at the first of every month.
A receipt stating the amount given and the date.
A section for the recipient to tear off and send with a new donation. That should have the donor’s name and address already printed on it, and a blank to fill out for the amount given.
There should also be blanks to fill out if the donor wants to pledge to send some amount on a regular basis, or wants to be a volunteer.
There should always be a small envelope addressed to the charity enclosed with any thank-you note, for the convenience of the donor. It is not necessary to have a stamp on it. When such an envelope is enclosed, many more people send repeat donations.
g. Apply for a bulk mail permit
The ED may not want to do any bulk mailings, even though they save money on postage, until there is someone else to do them. That is because they are so time-consuming. It would be better to spend the extra money on stamps than to have the ED do them. The ED should be spending time on other things instead.
Even so, these applications can take time to be approved. So the ED may want to go ahead and apply for one about at this point, so that the bulk mail option will be available later when needed.
Step Four: Recruiting Client Churches:
a. Mailings to Churches and Pastors
A large mailing to 100-200 selected churches should be sent. It should consist of a letter to the pastor from the ED. One page letters are almost always best. Some people and pastors never read letters any longer than that. A brochure may or may not be enclosed with this letter.
The letter should do these things: acquaint the pastor briefly with the work of the charity;
invite the pastor to refer poor people to the charity; and ask the pastor to call if he or she
is interested in having the charity assist the church with its task of helping the poor.
A second mailing to 10 or 20 selected pastors should be sent, with a different letter, saying that the ED will contact the pastor soon for an appointment.
b. Personal Contacts with Pastors
After the second mailing to 10-20 selected pastors goes out, the ED should begin to contact them for an appointment.
This contact should not be by phone. It should be in person. Even though the contact is only to set up an appointment, the effort will be largely wasted if it is by phone.
The ED should go personally to the church and ask for the pastor. It is very important to treat the secretary or receptionist in a very friendly way! When the ED sees the pastor, the ED should say that he or she knows the pastor is busy, and just wanted to meet the pastor and see if an appointment could be made for a later time. This personal visit is likely to result in an appointment. A phone call is likely to fail.
If it is hard for the ED to do this during the week, the ED can go to the church on a Sunday morning and approach the pastor immediately after a service. With business card already in hand, and using only about two short sentences, the ED should say something like this: “I’m so-and-so, Executive Director of such-and-such. May I call you this week about an appointment?” The pastor will usually agree. Then the ED should call no later than the following Monday or Tuesday to set up the appointment.
c. The Appointment with the Pastor: Developing Client Churches
The ED should carefully prepare what to say to pastors during this meeting, remembering the basics: what the problem is, what we are doing, and how you can help. The ED’s presentation should not take over about 15 minutes. Then time should be allowed for questions from the pastor.
That entire part of the meeting should not take over 30 minutes. (The ED should watch the time, and make sure that the entire appointment does not last over 45 minutes. That will help assure the full attention of the pastor.)
When it is almost time to leave, the pastor should be offered the option of having the charity help set up a program to help the poor inside that church.
The ED should also acknowledge that the pastor has to consult with others in the church before such a decision can be made, and should ask if it would be possible to be present at any such meetings to answer any questions. Lest the pastor offer to do the presenting, the ED should explain, “We always feel we can explain what we do better than anyone else can.” The pastor will often invite the ED right then to the next scheduled meeting of the appropriate committee.
The ED should realize that it will take about five meetings with various committees and individuals of the church before any decision will be made.
Although that process can take a few months, it is a good process for the ED and the charity. That is because the long process of talking to various committees and groups in that church will help build the church’s ownership in the program. By the time it is approved, the support for the program in that church will be much greater than if approval had happened quickly.
This is how the ED can recruit client churches.
Step Five: Getting the First Client, Then Others:
Very early in the process, even before there are any other employees besides the ED, the ED should work hard to get at least one client.
Everything that needs to be done for a client should be done for that client. Nothing should be left out. (See Chapter 24, “What a Good Program Looks Like,” and Chapter 26 on volunteers. Chapters 25, 27 and 28 are also suggested.)
The ED should see to it that that client, above all clients, succeeds. The client needs the success. The charity also needs a successful client.
Other clients can be taken on, as the new charity is able, once that first client is doing well in the program.
Step Six: The First Annual Dinner
With at least one successful client to point to, plans should be made for the first annual dinner.
A date should be carefully chosen. It should be either in the fall, from the last week in September to the last week of October, or during the early spring, between the last week of February and the last week of April. Tuesdays and Thursdays are the best days of the week. Newspapers and other sources should be checked to avoid choosing a date when other conflicting dinners or other events may be taking place.
The major consideration in choosing a date will be when the chosen speaker is available. The ED needs to arrange for the main speaker. That speaker should be the biggest “draw” who will come without a fee (at least, for this first time.)
Arrangements for the dinner need to start not later than four months before that date.
A dining hall at a restaurant or hotel should be reserved. A deposit will have to be made, and a certain minimum number of people will have to be guaranteed to be paid for, whether that number attend or not. For that reason, it is essential not to commit for more space than is needed. Perhaps about 150 people should be the number used in planning for the first dinner.
Prices for the tickets should be carefully set, first, to be in line with prices for similar events, and second, to make sure the charity not only does not lose money, but actually makes money.
The ED should try to find a volunteer to “do” the dinner. It takes so much work that the ED cannot do it. That volunteer will have to work hard for at least the final six weeks before the dinner. The volunteer should see to ordering the invitations, getting them out on time, tracking the response, handling the arrangements and assisting in selling entire tables of tickets. If possible, the volunteer may arrange for additional fund-raising activities at the dinner, such as a “silent auction”.
To get all these things done on time, the organizing volunteer will need to calculate backward from date of the dinner, seeing when each thing will have to happen for everything to fall into place on time.
It would be helpful to pay this volunteer a minimal amount, say six weeks at 20 hours a week for around the minimum wage. Volunteers usually will not want to take even this, but it is good to insist. The main reason is to give the volunteer some protection against complaints from her family. They are more likely to accept her taking time away from helping them do things, if it is a short-term job for which she is being paid. Such volunteers often give all the money back after the dinner, anyhow.
The ED also needs to pursue the pastors of some of the main “target” churches of the charity to attend. One way is to invite one to give the invocation and another the benediction.
These should be seated at the head table, together with the main speaker, the Board Chair, the ED and the MC. Their spouses may also be seated there if space allows. None of these should have to pay for their tickets.
The ED also needs to recruit a good MC for the dinner. That needs to be an experienced MC who will also be a good person to make a strong plea for donations during the dinner.
The ED should expect to work hard to sell tables-worth of tickets for the dinner. At least half of all tickets should be sold by the table.
The agenda for the dinner night should include acknowledgement of the Board, all volunteers, all donors, any clergy and other dignitaries, such as public officials, who may be present. The Board Chair should speak very briefly, as should the ED. The main speaker gets the major part of the time. Then one or two clients should tell their stories briefly. After that, the MC’s plea for funding should be made. Appropriate music, at the beginning and around the time of the client’s stories, is good.
Guests should be asked to sign in when they arrive, giving their addresses and phone numbers. They should be added to the mailing list.
Step Seven: Applying to the IRS for the 501(c)(3)
This should begin as soon as the incorporation of the charity has been approved by the state. Approval of the 501(c)(3) will take some time, so application should be made promptly after incorporation.
The ED should apply as early as possible for an additional reason. That is that donations to the charity made before the 501(c)(3) is approved will be ruled tax-exempt after the approval, retroactive to the date the application is received by the IRS. So the application should be submitted at the earliest possible date. Tax-exemption may make all the difference in whether certain people give money to the charity.
In addition, no grant monies will be paid to the charity until the grant maker has received a copy of the 501(c)(3) IRS approval letter.
Step Eight: Applying for Grants
One way to raise support for a full-time salary for the ED and additional employees is to apply for grants successfully. The ED should take whatever courses are available in applying for grants. In addition, there are non-profits that exist to give information on grant possibilities to charities. These exist in some localities, and also on the internet.
Targets for grant applications should be chosen carefully. The target foundation should be contacted for a copy of their annual report and also of their procedure for accepting applications. The annual report should be studied carefully to see what kinds of charities receive funding, how much and for what purpose. The guidelines for submitting applications should be followed to the letter, with great care.
Most grant makers have a schedule for considering grants. Applications may be considered once, twice or four times a year. Care should be taken to submit the application before the nearest deadline. If an application wins a grant, it can take some months more before any funds actually arrive. On the average, it takes about a year to a year and a half from the time of application to the time money arrives.
Because it takes so long, getting a grant does not help with the initial plans for funding. Other means must be found before then. In addition, applying for a grant is very competitive, with much more money being requested than is available. Getting a grant is somewhat like winning a lottery. It is not something that can be counted on. All other means of funding possible should also be developed.
When a grant is awarded, the charity must approve and sign a grant agreement before the first check will be sent. If the terms of this agreement are not observed, the grant maker has a right to ask for a refund of funds.
This agreement must be faithfully observed. It usually requires regular reports from the charity, meeting the proper deadlines. The next check usually is not sent unless the report is received and approved. Some grant makers delay a check three months or more if the deadline for the report is missed by even one day. Grants are very serious business!
Step Nine: Recruiting and Training Client Churches
a. Recruiting:
Once a church has made the decision to work with the charity in serving the poor, the next step is to recruit volunteers for that church’s program.
In preparation, the church should have articles in a couple of its newsletter issues about the new program and the need for volunteers. Announcements should also be made for two or three Sundays in the bulletin or during services.
Then the ED should make a 3-4 minute presentation (strictly kept to that time) at that church on a Sunday morning. It should be announced that there will be sign-up sheets for volunteers outside right after the services, for training which will be offered the following weekend. Training should then take place the following Friday evening and Saturday morning, in two three-hour seminars.
Using the material in this book, the volunteers should be trained in: what clients are like, why holding people accountable is important, why work habits are important and what they will be doing in the program. They should be told that there will be weekly volunteer meetings after that, and that they will receive additional training and assistance in their program from the charity.
The first regular volunteer meeting is a time to select the team leader. The leader should be chosen with great care. The pastor may be able to give guidance here. A good leader will make a team and a poor leader will ruin it. The leader is all-important.
That first meeting is also a time to see who will do what tasks. Some volunteers need to be “buddies.” Others need to teach the courses for the client. Some need to be responsible for the supper. Others need to care for, and mentor, the children of the clients who come. Still others need to volunteer to transport the clients to and from the weekly meetings.
All volunteers need to understand that they need to attend all meetings, not just those at which they have a particular task to perform. That is because they are not a team yet. They are just a group. They need to bond as a group in order to become a strong team. Without the weekly meetings, they will not bond. They will try to communicate with the group only through contacts with the leader. So they will miss weekly contacts with each other.
A church team is like a wagon wheel. The leader is the hub and the members are the spokes. The team is the rim. The rim is all of the team communicating directly with each other, united with each other, all through the weekly meetings. Without the spokes, the rim cannot roll. The team will fail. If it does, the program in that church will fail.
As soon as the team is organized, they should receive their first client right away. Do not keep them waiting, or the team may be lost. The client should already have received a week’s initial training from the charity and already be employed before starting with the church team.
The charity, from then on, should always have a trained staff member present at every weekly team meeting at that church. That staff member should keep the ED closely informed about the progress of the program there.
b. Payments to the Charity by Client Churches:
The charity will recruit and train two basic kinds of churches: those who want to eventually have their own in-house charity to run completely themselves; and those who want to have their in-house program permanently run by the charity. In addition, the charity may serve, or help put together, a group of churches too small to have in-house programs, but who want to work together in a unified program. They might choose to have the charity to run that program permanently, or to run it temporarily until they are ready to start their own charity to take it over.
In those cases where a separate, independent charity is anticipated, this charity may also be employed to help get it going and stay with it awhile until it is ready to function on its own. In that case, this charity would probably assist in the hiring and training of the first staff of the new charity.
In either of these situations—permanent or temporary involvement—the charity needs to charge the churches an amount that allows the charity to do the work, and that can be afforded by the churches involved. The charity will not be able to charge less than its complete costs (which should include administrative costs), unless it wants to go broke quickly. But neither should it charge more than it needs to. These charges should be carefully worked out.
The charges, with an explanation of what they are for and why they are the size they are, should be part of the initial discussions with the church before it becomes a client. They should be pointed out in the written material presented to the church initially. There should also be a written statement from the church that it agrees to the charges, and to the monthly payment date.
Step Ten: Hiring Additional Staff
The first staff member hired should be an office secretary.
The second should be a jobs developer, who will help find initial jobs for clients, set up the first job interview, and also do the weekly visits to the client’s job site.
The third may need to be another jobs developer, if too many clients are being served for one person to handle.
The fourth should do the week-long pre-program training of clients.
About here, another office worker will probably be needed.
The ED should always check into out-sourcing before hiring more staff. The cost can be lower and the quality can be higher. Some possible out-sourcing can be using a mailing firm if bulk mail is going to be used; using an outside payroll firm rather than an inside bookkeeper; using an outside janitorial service, and so on.
Step Eleven: Continuation of Recruiting and Fund Raising
The ED should develop around at least fifty to a hundred churches as a base for funding and resources. Many churches that are not willing or perhaps able to have a program of their own may still be willing to help the charity with funding and/or volunteers. The only thing is, the charity will have to recruit them itself from those churches.
That will mean that Sundays will be a working day for the ED. (Some other days will have to be taken off instead.) During the week, the ED should be visiting pastors and speaking to appropriate committees in churches. The ED should ask the committees to put funding for the charity into the church’s budget.
The ED needs to have a lot of familiarity with churches and how they function. The ED needs to know what time of year churches vote on their budgets and what time of year preparations for the next budget begin. These are among the questions an ED needs to ask when talking to pastors.
The ED also needs to speak in churches on Sunday mornings, often and briefly, asking for funds and for volunteers. The ED should be ready to sign up volunteers, and people who want to get the newsletter, immediately after the service.
In this way, the ED can build a large, diverse base of funding. When there are only one or two major suppliers of funds, and then one of those is suddenly lost, that can devastate a charity. A base of hundreds or thousands of smaller donors will result in more stable funding that is less prone to be affected, even by changes in the economy.
In general, individuals and churches are the best sources of funding for a charity focused on the poor. It may help an ED to know that foundation grants amount to only about 12% of all giving in this country. Corporate grants amount to only 5% and bequests to only 8%. Individual giving, on the other hand, amounts to 75%! So time spent on obtaining foundation and corporate grants usually is not nearly so productive as time spent on attracting and keeping many, many individual donors.
The ED also needs to know that charities that focus on social services, including those that focus specifically on the poor, receive less than 9% of all charitable giving! Even then, only a fraction of that 9% is for the poor. So an important part of the ED’s job is to get in there and try to fight for more.
Fund-raising is a never-ending task. The funding base always takes careful maintenance and appreciation. But that is what it takes to be able to help the poor. There is no other way. Someone has to do it.
This is one way to get started. No doubt there are many others. None of them are easy. But helping the poor is not something that is an option: it is a necessity.
Good luck! And may God be with you in your work.
