Being a Nonprofit’s Friend, Part 3

Updates galore! This post is a continuation of the previous two posts, How to Befriend a Nonprofit, and Befriending Nonprofits, Part 2. You should read both of those if you’re new to this process, because I’m going to jump right in.

So! At the end of the last post about nonprofits, I was severely confused about calculating organizational capacity, and also very wrong about Salem Animal Rescue League’s organizational efficiency Charity Navigator rating. But there’s good news on both parts — I’ve fixed my mistakes. Salem Animal Rescue League earned 3 stars for their organizational efficiency, and not 1 star like I stated. I miscalculated because I forgot to include the 7.9 points they receive for spending 79% of their expenses budget on programs, bringing their points total up to 32.9. Hurray for SARL! Three stars is a good amount of stars. (Again, I’m getting my information from this Charity Navigator page.)

Why did I make such a careless mistake? It could have something to do with the vacation fever I was getting the night before my birthday, OR the 100+ degree fever I was developing when I wrote the post — cut me a little slack, okay? Not only did I correct myself, I figured out what I was doing wrong when calculating organizational capacity, which we’re going to go over next.

Okay, we went over the formula for computing an organization’s annual growth in my last post. I wrote everything out and calculated it this time instead of trying to do it on the computer — much better! Here’s a picture of what I came up with, complete with squiggly red lines to point out the important stuff:

I know the picture’s a little small, but you can click on it to see it in a bigger size. On the left side of the paper, I calculated the Annual Revenue growth, using the formula and information from the last post. As it turns out, SARL’s revenue grew by 18.929% over two years, which gives them 10 points. Their expenses grew by 38.212% over the same time period, which gives them another ten points. Then, across the bottom of the sheet of paper, I calculated SARL’s working capital ratio, or how long it could sustain its level of spending using only its net assets (which come out to be $509,033 and are reported on line 21 of the 990 form). SARL could live on its net assets for just under 4.5 years, which is excellent for a general type of nonprofit, so they get 10 points for that.

SARL’s total score for their organizational capacity comes out to be 30 points out of 30, which gives them 4 stars in that category. That’s really good! To find out their total Charity Navigator rating, we add the 30 organizational capacity points with the 32.9 points from their organizational efficiency. This gives them 62.9 points overall, and projects them into the 4 star total rating. Hurray for SARL!

What does this mean for you? It means you’d want to call SARL and give them your money because they manage money really well over the long run, and have a pretty decent way of spending their day-to-day dollars too.

You can be a nonprofit friend in more ways besides giving your hard-earned cash. Let’s recap what we talked about already, and then add more:

• Chat with someone at the office. Nonprofits like to know about their supporters — mainly so they can call on you in their times of need. This can work to your advantage, though; you’ll be one of the first to know about new developments once they realize you’re genuinely interested, and you’ll get neat opportunities to express yourself in their literature and on their website.

• Volunteer. Offer your skills if you think the nonprofit’s lacking in a certain area. Are they’re people always confusing there theirs? Let them know you’ll proofread their newsletter and website. If you can’t think of anything else, offer to sell raffle tickets at their next event. Or better yet…

• Offer to ask for donations from local businesses for the raffle at their next event. You can’t go wrong with soliciting on behalf of your nonprofit — and it’s really not as awkward as you’d think. Chances are, you’re a regular at some store or restaurant or hair salon in your town. Write a quick letter to the people at your store explaining what the next event is, what you’re looking for, and where the money’s going. Then, the next time you go into your place, hand the letter to the person you know and ask if they can give it to the owner. You might even have a chance to chat with the owner. Local businesses love to give back to their regulars, so you’ll probably score a gift certificate or some other goodie for your nonprofit — and even if you don’t, the worst they can say is no.

• Network a little, will ya? Talk to people about your nonprofit of choice, and then maybe they’ll be interested. This is especially easy if you’ve done your homework and you get super excited about nonprofit financials like me. Unless your friends are already committed to a nonprofit, they’ll be happy to hear about your newest interest, and the two (or more!) of you can sell raffle tickets at the next event together. And then they’ll network and solicit donations on behalf of the nonprofit, and the next thing you know, you look good for recommending a friend, and your nonprofit is happy because they’re gaining more supporters.

• Hold a really great fundraiser. This is probably the best thing you can do for your nonprofit, although it’s the most labor-intensive. Really great fundraisers are events in which you hand the nonprofit a stack of cash and a list of everyone who donated — they don’t have to do a thing to help organize. You’ve done all the work, you raised all the money, you got all the donor names together; now all they have to do is send thank you notes. It can be a little bit daunting to put together an event all by yourself (but if you’ve been networking, you can do it with friends). It really is worth it, raising money for a cause you believe in.