Proposal Review

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Proposal Review Analysis A Workshop for
Better Grantmaking
Presented by Louis J. Beccaria, Ph.D. President/
CEO Phoenixville Community Health Foundation
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Guidelines You Get What You Ask For!
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Guidelines You Get What You Ask For!
Why Have Guidelines?

• Improves the foundations stewardship
• Enables more efficient proposal evaluation
• Promotes more fairness in proposal evaluation
• Allows for exceptions, when required
• Promotes grantmaking impact and effectiveness
• Protects trustee/directors and staff from
  inappropriate requests
• Projects an image of professionalism and
  organization

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Guidelines You Get What You Ask For!

• Components For Guidelines
• Geography
• Primary area
• Secondary area
• Whats IN Whats OUT You decide
• Founding principles of your foundation
• Changing needs of the community
• Foundations asset size
• Fields of interest of the foundation

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Guidelines You Get What You Ask For!

• Components For Guidelines (cont.)
• Whats IN Whats OUT You decide
• Types of grants awarded/not entertained
• multi-year
• matching/challenges
• capital
• program specific
• general operations
• capacity building
• other

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Guidelines You Get What You Ask For!

• Components For Guidelines (cont.)
• Grantmaking Process
• frequency of distribution meetings determines
  deadlines
• by invitation or open-access
• letter of intent or full proposal
• common application form or not
• phone calls/office visits/site visits
• frequency of grant request submissions
• turndowns
• decision making process
• grant agreements

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Analyzing the Proposal
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Components of a Good Cover Letter

• Should be properly addressed
• Can serve as transmittal letter or proposal
  summary
• Summary should include brief statement of
• identifying organization and its credibility
• problem(s) to be addressed
• goal(s) and objective(s)
• program approach/length
• amount requested
• number of people served

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Components of a Good Cover Letter (cont.)

• Should be asking for something within the realm
  of possibility from your foundation
• type of grant
• size of grant
• area of interest
• Should be signed by the top authority the
  Executive Director, President, or Chairman of the
  Board
• Should be brief (1 page)

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Components of a Good Introduction Section

• Should contain the organizations brief mission
  statement
• Should have a brief history of the organization
• how, why, and when it was started
• Should contain information that enhances the
  organizations credibility
• activities
• accomplishments
• credible people associated with the organization
• Should point out the organizations niche or
  special place in the service delivery network
• Should point out briefly how clients/community
  benefit from the organizations work

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Components of a Good Need or Problem Statement

• Should make a connection to the previously
  explained organizational history
• Should define the problem locally as well as
  nationally, if relevant
• Should support the existence of the problem
  with evidence both statistical and anecdotal
• why the funds are needed
• Should note the community assets upon which
  solutions to the problem(s) can be built
• Should be capable of being addressed within the
  resource constraints (time, money, staffing,
  available expertise) of the organization and the
  funder

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Components of a Good Program Goals and Objectives
Section

• Should answer the questions
• What is the solution to the problem you have
  just explained (goal)?
• Is the problem, as outlined, being addressed in
  full?
• How will we know if you have addressed the
  problem (objective)?
• Goals should be broad (e.g., promote physical,
  emotional, social, and spiritual wholeness for
  homeless families)
• Objectives should be specific, measurable and
  time-limited (by June 30, 2008 provide services
  to 12 homeless mothers with 3 to 6
  childrenincluding case management, rental
  assistance and a parenting program for 12 to 18
  months)
• what you are going to do
• Both goals and objectives should be realistic,
  attainable, and worthy of your money

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Components of a Good Strategy/Methodology
Approach Section

• Should describe the specific activities taking
  place
• Should give you a clear idea of how the
  activities will produce the desired result
• Should be specific about what staff or
  volunteers are doing with clients and when
• Should be realistic
• show how this approach can be less time
  consuming, less costly, and more effective

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Components of a Good Strategy/Methodology
Approach Section (cont.)

• Should be within your guidelines
• Should be directly related to all aspects of
  the need/problem statement
• Should directly address the goals and
  objectives developed in the proposal
• Should be practical/reasonable/doable
• Should be based upon sound and accepted service
  delivery principles or model

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Components of a Good Evaluation Section

• Assessment measures should be built into the
  program at the program design stage
• Evaluation measures should be directly related
  to each objective noted in the proposal
• Evaluation measures should be
  outcome/results/product-oriented not just
  process-oriented
• Ideally, evaluation should address qualitative
  as well as quantitative aspects of the program
• General concepts being evaluated (e.g.,
  self-esteem, independence, respect for authority,
  cleaner environment) should be addressed via
  specific social indicators of the concept
• Should demonstrate some prospect for meaningful
  practical impact on the problem(s) being
  addressed
• Should indicate how the results will be
  disseminated in some way

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Components of a Good Budget Section

• Should contain two major sections
• salaries/benefits
• operating expenses
• Should be as specific as possible
• Should include any in-kind contributions
  involved in the program
• Should contain an allocation of expenses across
  the line item
• total cost
• amount requested of funder
• in-kind contributions from other sources
• amount of dollars from other sources
• in-kind contribution from requesting
  organization

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Components of a Good Budget Section (cont.)

• Questions the funder should be able to answer
  in the affirmative
• Will this be a good social investment?
• Is there a leveraging opportunity here?
• Is a match or challenge grant appropriate for
  this grant request?
• Reasons for a match/challenge
  requirement
• broaden funding base
• encourage funding stream diversity
• encourage community support
• save fdn./corp. funding dollars
• test organizations fund development capability
• Is this a good opportunity for financial
  partnership with other public or private funders?
  

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Components of a Good Budget Section (cont.)

• Should include a budget narrative as an
  attachment to explain difficult-to-understand or
  red-flag items
• Should reflect reasonable costs in your market
  area
• Should be realistic in addressing the stated
  problems and objectives
• Should contain a reasonable amount (e.g.,
  10-15) for administrative overhead expense

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Components of a Good Future Funding Section

• Should demonstrate some strategic and creative
  thinking for the programs future financial
  sustainability
• Should include, if possible, mention of
  self-generated income e.g., fees, special event
  income, annual fund allocation
• Should include, if practical, mention of
  contract-related future income from public sector
  or third-party groups
• Should include some thought about efficiencies
  that have been realized after the start-up cost
  are no longer a factor

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Components of Attachments Section
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Components of Attachments Section

• Statement that the IRS public charity
  tax-exemption is still in effect (IRS letter)
• Should expand upon issues mentioned in other
  sections (studies supporting claims made,
  additional statistics, previous reports produced
  by agency, critical reviews on organizations
  productions, samples of publications
• Should include support letters from other
  agencies indicating plans to cooperate (if
  applicable)
• List of board of directors and their community
  function

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Components of Attachments Section (cont.)

• Copy of organizational budget
• Copy of project budget (if applicable)
• Articles of incorporation and by-laws
• Copy of most recent independent audit and 990
  form
• List of public/private funding sources in past
  fiscal year
• Copy of strategic plan (if available)
• Copy of PA Charitable organizations
  registration certificate (if applicable)

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Looking at the Whole Organization
Governance
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Components of a Good Board Governance Structure

• Should demonstrate indicators of organizational
  strength (choose those with which you are
  comfortable)
• e.g., diverse, active, structured/organized
• Diversity indicators of board strength
• age
• race
• gender
• available professional expertise
• appropriate board size

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Components of a Good Board Governance Structure
(cont.)

• Indicators of having an active board
• have standing committees
• each board person serves on at least one
  committee
• frequency with which board meets
• frequency with which committees meet
• support by board members
• donating money
• cultivating fundraising contacts
• providing in-kind gifts/services

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Components of a Good Board Governance Structure
(cont.)

• Indicators of having an organized board
• written mission statement
• written vision statement
• written values statement
• written conflict of interest policy
• written strategic plan for organization
• written whistle blower policy

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Looking at the Whole Organization
Fiscal Health
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Indicators of Strong Organizational Fiscal Health
Structure

• Should have diversified funding streams, e.g.,

federal annual giving
state endowment income
local investment income
corporate fees
foundation contracts
special events other

• Should demonstrate efficiency in the use of
  financial resources (i.e., program expense ratio
  percentage of 70-75 or more)
• Should demonstrate a good degree of asset
  liquidity
• current ratio (current assets current
  liabilities) ( gt/ 1)
• investment ratio (long term investments total
  assets) ( gt/ 25)

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Indicators of Strong Organizational Fiscal Health
Structure (cont.)

• Should demonstrate long-term financial
  viability
• equity ratio (net assets total assets) (
  gt/ 2.0)
• long-term debt ratio (long term debt total
  net assets) ( lt/ 50)
• fixed asset ratio (property, plant equipment
  total assets)
• ( lt/ 50)
• Should show indication of financial
  sustainability via
• operating reserve fund of at least six months
  (goal)
• operating surplus at year-end
• net margin ratio (net surplus total revenue)
  ( gt/ annual cpi)
• Should demonstrate manageable debt service that
  is not a financial drain on operating budget

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Indicators of Strong Organizational Fiscal Health
Structure (cont.)

• Should demonstrate an increase in net assets
  from previous year
• net asset growth ratio
• Should not have significant litigation as a
  financial drain on the operating budget
• Should have an independent audit that is recent
  and clean
• Should have an auditors management letter
  included with audit
• Should not have an inordinate amount of
  financial dependence on any one funding source or
  source category
• overall source dependence ratio
• (largest revenue source total revenues) (
  lt/ 65 of total
• revenues)

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Indicators of Strong Organizational Fiscal Health
Structure (cont.)

• Ideally, should not have an inordinate reliance
  on charitable giving
• contributions ratio (contributions grants
  total revenues)
• ( lt/ 70)
• Should have reasonable expenditures for
  administration
• administration ratio (e.g., up to 25)
• (administrative expenses total expenses)
  ( lt/ 25)
• Should have a reasonable amount of dollars
  devoted to salaries, benefits and taxes
• not too little/not too much reflect the local
  non-profit market
• compensation ratio (salaries, benefits taxes
  total expenses)
• ( lt/ 70)

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Red Flags in Financial Statements

• Decrease in annual revenue
• Rising expenses
• Operating deficit
• Cash flow problems on a regular basis
• Lack of diversity in revenue large and
  dependent on one funder
• Late audits no more than 6 months after the
  close of the fiscal year
• Recent changes in management no ED for a period
  of time
• Decrease client demand for services
• Gaps in financial reporting
• Unusual delays in providing requested information

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Red Flags in Financial Statements (cont.)

• Unwillingness of management to allow an
• independent review of financial data
• Inadequate information regarding financial
  performance
• Key ratio deterioration
• Unexplained variances from the budget
• Resignation of key staff or directors
• Low employee morale and high turnover
• Donor complaints, vendor complaints, member
  complaints

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Looking at the Whole Organization
Site Visits
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Components for Conducting a Good Site Visit

• Say how much time youll have when you set up
  the visit
• Come prepared with questions
• Move around as you talk, see as much as
  possible beyond the directors office
• Check out seemingly unrelated physical
  aspects
• is the place clean, well lit, graffiti free?
  (this indicates, attention to detail, pride in
  work)
• does there seem to be an underlying
  organization to the physical plant?
• does the space function appropriately? (this
  indicates thoroughness in planning)

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Components for Conducting a Good Site Visit
(cont.)

• Check out relationships between and among staff
  and clients
• does the boss pass the ball and encourage staff
  to speak? (this indicates appropriate delegation
  of duties as well as trust)
• do the staff know each other and clients? (this
  indicates good morale and, probably, good working
  relations)
• look for body language messages
• Check out connections between what people wrote
  to you in the proposal and what they say
• are the staff who will carry out the work
  described in the proposal familiar with it?
• does the written description match what you are
  seeing and hearing?

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Components for Conducting a Good Site Visit
(cont.)

• Do you detect the presence of plants, i.e.
  people placed in your path specifically to say
  wonderful things?
• Is your visit overly scripted or under planned?
• Be prepared to give credit to the FEELING you
  get on the visit. Such feelings are often more
  reliable than the statistics or words in the
  written materials.
• At the end of the visit, after leaving,
  immediately take notes. Come to a conclusion did
  the visit inspire more confidence or did it
  diminish confidence and raise more questions?

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