Meeting the demand: bring in the reinforcements for grants, contributions and other revenues

Exploring reinforcements to increase grants, contributions and revenues is a good case for collaboration with another organization. Whether it is through a merger or acquisition (M&A) or a joint venture to seek grant funding, the following are some benefits of partnering with other organizations:

• Grant writing collaboration – present a stronger grant proposal when you work with another organization to meet various community needs and/or demonstrate greater impact to an underserved project with combined resources and infrastructure
• Broadens and deepens donor base – as mentioned above, the newer generation of givers are drawn to impact and want to see how their donations are making a difference. Connecting with another organization can create a more impactful story, influencing and/or increasing donor contributions
• Increases grant potential – foundations and grant organizations are looking for maximum impact when distributing their funds. If two organizations combine to meet a greater need in the community, then their innovation can create an edge on qualifying for funds. This collaboration creates momentum and a synergy for opportunities to connect services to an underserved need
• Improving cash reserves – by sharing services or combining with another organization, there is potential to decrease overhead costs and streamline practices to reduce expenses and build reserves

Key considerations when deciding on a collaboration

NFP organizations interested in a collaboration, partnership, or even a possible merger with another organization should consider the following elements of the potential partner’s organization and revenue:

Giving trends

• Concentration of a few large donors
• Volume of multiple small donors
• Average age and average dollar amount of givers (look for data trends over last five to seven years)
• Is there reliance on annual fundraising campaigns?
• Are there legacy giving programs and education for donors on leaving assets in their will and estates?
• Composition of donor giving practices and their restricted giving collections

Cash flow trends

• Are there steady inflows throughout the year or a large percentage of giving in the last quarter?
• Are there multiple streams of revenue (investment, activity-based, rental income, etc.) or largely contributions?
• What cash reserves are available and what is their policy to transfer the use of the funds?

Restrictions on donations and/or grants

• Review donor and grant agreements to see what types of restrictions there may be on dollars coming into the organization
• Review multi-year agreements for renewal requirements

Review giving of the board

• Boards play a large role in fundraising through their own giving and their ability to network and tell the organization’s story to raise funds. What is their role in fundraising campaigns?
• If an organization is merging with another, then understanding how much financial contribution is made by the board is essential

Baker Tilly can help

There are alternative revenue resources available for not-for-profit organizations, but it could be beneficial to consider how collaborating with another organization could help drive your mission’s impact and create a sustainable future. Baker Tilly is here for you. We have a dedicated practice group committed to working with thousands of not-for-profit organizations, some of whom are asking these same questions. Connect with a Baker Tilly Value Architect™ to explore ways we can assist on your collaboration journey.