 Today's one of our favorite days, Julia. I'm excited. Me too. Let me get us started by saying welcome and thanks for joining us for another Friday of the non-profit show, brought to you by these amazing presenting sponsors that you can see in front of you on the screen. These companies exist for you, for your greater good and to help you move your mission forward in, around and throughout your community. So if you have not checked out these presenting sponsors, do yourself a favor and do that. Not now, but a little bit later. So I know, don't get sidetracked right now. And if you don't know us by now, you absolutely should, but we welcome you back to the non-profit show. Julia Patrick is the CEO of the American Non-profit Academy. Thanks to you, Julia. We have these episodes going strong. And I'm Jarrett Ransom, your non-profit nerd CEO of the Raven Group. And a little insight is, Julie and I are having a team meeting later today to in fact talk about next year. So we hope that you will continue with us on this journey. We're all in this journey together. And maybe we'll find our crystal ball or if you find yours, Julia, bring that to today's meeting. But so thrilled and honored to continue these conversations. Ask and Answered is underwritten by our fundraising academy partner. So thank you, Fundraising Academy for bringing our Fun Friday conversation. And these are questions that come in from you, our viewers in many ways. And we compile these questions and have dedicated one day a week to Ask and Answered. So maybe one of your questions that you've sent in is on our deck today, our show deck. So we'll find out. Well, you know, every day is different and especially our Ask and Answer episode. If you come to us on Monday through Thursday, you're gonna see different things. Friday is really a completely different show setup day. So let's start with Samantha from Huntsville, Alabama. I've been tasked to create a budget for our newish nonprofit. I'm at a loss of how to go about this, help. Help. This is like a week long show answer. It is. And my question is with the newish, right? Because when you file your paperwork, your 1023 application, it actually asks for your budget at that time. So Samantha, if you have not received the budget that was actually submitted with your 1023 application, there's a short form and a long form on these applications. So the difference is $50,000. If you intend to bring in 50,000 or more, then you want to go with the long form. And again, that's a 1023 IRS application. So there should be a budget already forecasted and that's essentially what it is. It's a forecasted budget. Now, I also say build a budget based off of the ideal scenario. So it may not be what you're currently working with. For instance, if you are so newish that the staff is all volunteer run and led, you may not have salaries. You may not have workman's comp. You may not have benefits. But the goal is to have that. And so I always advise any newish nonprofits to create a more realistic budget. What would be a competitive salary if you were to pay your entire team? What would be your ideal expenses, include marketing and printing and networking and professional fees? Cybersecurity. Cybersecurity, which as we learned could be up to maybe more, 20% of your IT budget. So there's a lot to think in there. And what I, again, Samantha, just to recap, what I say is to create a budget that you intend to build not based off of what's in your current checking account. Right. And I would say, Samantha, all too often I see budgets that have been created by a committee or someone like you, that's great. But then they don't dovetail to the chart of accounts or to the actual controller or part-time bookkeeper or CPA and any of that. And so I would suggest, if you're trying to figure out how to do this, find out who that provider is and they should have some templates for you and then make sure that that chart of accounts that you're looking at makes sense. Because if you don't do that, if you don't start outright, you're gonna be in conflict with your accounting provider and then you're gonna be spending a lot more money on trying to get speaking the same language. And so that's just my, my two cents, because, you know, that's good. Yeah. You know. I think that's good luck. It's not an easy thing. And that's why, if nothing else, that's why you need to talk to your accounting provider or bookkeeper or whatever, so that you start out addressing the things, cause they're gonna know, you know, like, well, wait, you forgot about rent or you forgot about, you know, whatever. So yeah. Or a loan or anything that might be out there, other assets. And I think another good point to make to this, Julia, is what we've heard so often throughout these last 18, you know, 24 months is to create a forecasted budget and then visit and review that. Quarterly. So Samantha, you're really creating, you know, a draft and this is meant to be a working document. So don't feel like it has to be, you know, sign sealed and delivered on concrete. It really is something that you should be looking at quarterly, if not monthly. I love that you said that because I think that I'm old school in that. I would have been like, okay, this is a task, get it done, and then it goes on the bookshelf. And that is so not helpful. I mean, it needs, I love that you said that, thank you. You know what? I'm the nerd. You are the nonprofit nerd. There you are calling me names again that I love to be called. Oh, Lord. Okay, let's see what we've got here. All right, Mallory from what? I see you're making me dizzy. I know, I'm sorry, I'm sorry. Mallory from Reno, Nevada. Someone on our team watched a previous episode and your guest said that we should focus on our top 30 donors when thinking about the end of the year. Does this sound right? I think that was Sherry Kwam Taylor. Yeah. Was it? Who said? It was. Said, you know, take your top 30 donors and look at the strategies that should be working for them and they are not gonna be the strategies for everybody else. I remember it was kind of like, whoa, you know what I mean? Yeah. You know, don't try and make it one size fit all, that's all. Well, and I think that's important, especially now if you joined us on the Chitty Chat Chat, we were talking about the end of year and how literally January is days away and talking about that and cannot believe that 2022 is literally around the corner. So during the remainder of this year, if you were to pull your top 30 and then if you find, you know what, there's a couple more there that are really close to that top 30 at those end, maybe an additional five, additional 10, I cannot hurt. And I would definitely make these your high touch constituents that you want to reach out to personal phone call, handwritten note, go back to your donor database, see how you have engaged and interacted with these top donors. So Mallory, if you can pull that from your system, be it Bloomerang or another donor database, you would be able to see if they've given so far this year, and then see how that compares to the previous couple of years, I typically say three years, so go back three years, see how they're giving this year compares to the previous and maybe with that personal high touch, you might be able to get these donors to come in again at a higher level before the end of the year. So top 30, that would be ideal. And I do agree, I think it was Sherry Quam-Taylor. So as a fundraising professional and somebody that's in the ecosystem of looking at a lot of nonprofits, do you think that this is a common practice that nonprofits are looking at that top and pick a number, top 20, top 30, top 50, I mean, that they have segmented enough or is this more of a newer approach? You know, I'm going to say it's a newer approach. I wish that it was something that was top of mind. You know, it's kind of that whole 80, 20 role that 20% of your donor database will actually give 80% of your funding. So you really should know your top donors, but the other report that I like to pull Julia and the one that I coach my clients is your libut. So that is an acronym that states last year, but unfortunately not this. So you know, that's a lot of words to say. So we call it a libut. So if you pull the libut Mallory, you will see all of those individuals that gave last year but have not given this year, right? So last year, but unfortunately not this, that is your lowest hanging fruit. And it could be a dollar, it could be a million dollars, but right now you want to pull that libut through, to compare 12 months to 12 months and see when did they give last year, has that time already passed this year? And if it has, definitely reach out to them if you have year in giving appeals going out and you know that that's how they gave last year, I would recommend making a touch to these individuals an email, a phone call, a handwritten note so that again, they are kind of like, friendly tapped that, oh yeah, I did give to them last year and I do need to give to them again this year. So two things, I love that you, I remember you talking about libut, you had Cybut? Yeah, good job. Okay, Cybut, but I can remember the word but I can't remember what it meant. Some year, so it's some year, at some point they have given to your organization but not this year. So it's the same S-Y-B-U-N-T, so some year, but unfortunately not this. So it's some year, they were a donor and they did make a contribution, a financial contribution to your organization but not this year. So you could pull that for any year you want, Julia. You could pull it, I always recommend three, again, those three years, wanna go back five, that's totally fine too. You could do historical data all the way back to whatever your donor database shows but I would really focus in between three and five years. Okay, so then number two, since we're gonna be meeting and I'm just a little bit about guests for 2022, I think I'm going to put on the list to get Sherry Quam-Taylor back to talk about actions just for your top 30 donors. 30, yeah, I love it. It's really an interesting concept that I think a lot of our fundraisers or development directors, development teams, no kind of, oh yeah, they're a strong supporter but maybe really looking at this with a different lens I'm fascinated by it. And have your board engaged with these top 30, is there a connection there? Do you go out of your way and provide a gift? That is up in the air. I know there's a lot of organizations that will say, I don't wanna receive anything because I want my money to go specifically towards the bottom line, but there are so many organizations that do send something. In fact, I know Azu will send free tickets. So I was working with my local zoo here and they did that, which was really nice. And so there's a lot of things that are still mission relevant that you might want to consider for your top 30. Super cool. Mallory, thank you for connecting with us because... Great question. Yeah, you've got us thinking of some other things. Okay, well now you know how I feel about these questions. Name withheld from Rochester. Your favorite. Okay, let's see what it says. Can you please explain the process of a consent agenda? I'm supposed to be setting up our board meetings in 2021. Oh, I bet it's 2022. As the newly elected board secretary, and I am not sure what this means. You get the start in. Yeah, consent agenda's actually started more on the municipal side of American government governments because you'd be looking at small town councils or county boards, maybe even school systems where they just have so much to vote on. And so what they do is they kind of put it all into what they call a consent agenda. And so it's all voted on at one time. So what this does is that it frees up the board or the governing body to have more time to be strategic and to discuss things of importance rather than just rubber stamping reports and the like. The deal is this, two things. Just because something gets put on a consent agenda doesn't mean it has to stay there. Your board members can vote to remove it. And that's a very simple task. But more importantly, your board members have to be mature enough and wise enough to understand that their role is a fiduciary and they have legal governance issues to abide by and that they are going to read these agenda, consent agenda items. So to give you an idea, it might be the approval of a contract. It might be the approval of a report. It might be the approval of a certain expense for a certain expense that is moving towards a goal that maybe is a higher amount. Like, so I've seen some groups where any check that was drafted over a certain cash drawer amount, say $10,000, that goes onto the consent agenda. And this is to help avoid the opportunity for fraud. So I mean, there are a lot of different things. What I don't like seeing, Jared, and I don't know what you think, I think the CEO dashboard should not be on the consent agenda. I know a lot of people want to put it there, but my sense of it is, is it should be more front-centered. Yeah, well, I think the other big piece of this is when you use the consent agenda model, it's really important if you are preparing and setting up these board meetings, that you are setting a realistic date to send out your board packet. Because that is where I see misalignment happen too often is that it's literally the day of the meeting or the day before the meeting. We're all busy, right? And so to make sure that you give your board members ample time and the respect that they have time to set aside for this is really important. And I see that all too often in a meeting where they'll say, I didn't get a chance to read prior to the meeting. And so therefore the consent agenda is more or less null and void. And then you spend your time going through the documents then and there, which again, is just not... No, thank you for bringing that. Consent agendas we recommend at the American Nonprofit Academy seven days before the meeting starts, it's a hard deadline. Of course, all your meetings should be already out for 2022. Exactly. If you be working 16 months out dates, 16 months forward, all board meeting dates are listed. Can they be modified yet? But they need to be really, that five needs to be in the ground. And then the hard deadline is seven days. And if something doesn't get into the packet, and again, hopefully you're using portals, digital portals, we still use the word packet. A digital packet. A digital packet, perfect. If it doesn't get on there before that seven days, then two things can happen. It goes onto the regular agenda or it goes onto the next consent agenda. And it will take some training, but that means everybody that is providing data or materials needs to back it up seven days because you're right. Technically, if you're a board member or trustee and you have not read that consent agenda, technically you should not be allowed to vote. Right. And that means that you probably won't have a quorum. I mean, that's a big issue. So, okay. Off my soapbox and onto Marnie from San Antonio, Texas. What do I always say about the ladies in Texas? Oh, the higher the hair, the higher to heaven. The higher the hair, the closer to heaven. That's my, you know, mode here. Hello. Oh, Marnie, we hope you have big hair. If not, I have some great product I can help you with, Marnie. Okay, we're looking at our fund development goals for 2022 and I'm wondering what we should do on the budget spreadsheet. Oh, this is interesting. Is there a standard increase like five or 10% that we should work towards? I want to set a goal that we can achieve. Great question. So actually, when I coach my clients, Marnie, I ask them to set three goals. A good, a better, a best. Your best is your stretch goal. Your good is kind of your break-even. This is where we want to be. So perhaps your good goal could be 5%. 7%, 10% is your stretch. So good, better, and best, right? Five, seven, 10. So that's what I like to coach. And I think it makes it attainable to, you know, achieve celebration. Now we can celebrate at the good goal. Once we've met that, when we exceed that, we of course go to the next level. So I typically set internally, and also when I do strategic planning, three layers of success. And I would say let's start at that 5% at the lowest, and then go up from there. I would also say you really need to analyze your previous data, your historical data. What are your trends saying based off of your previous reports and your financials? And then also what is going on in the economy and, you know, the world at large? So even during the global health pandemic, donations and philanthropy has been on a rise. And we hope that that will continue. Market value is high. We hope that that continues as well. So people have continued their generosity. And again, you know, really looking at, okay, what has your past numbers told you? And then where are you looking to go? And I like to say grow at the same time. But I also have heard Marnie organizations truly doubling their goals, which to me is scary because I don't think that it's truly realistic. And the other thing we want to be very mindful of is our workforce, right? Our people and is it sustainable? So are the processes, practices and procedures that we need to continue and put into place to achieve these greater goals? Do we have the capacity and the resources to do that without burning out and losing our talent? Right. And I think that, you know, I think on Wall Street, the number, like a 5% increase is considered a winner. Right. So, you know, we think, oh my God, okay, we're gonna, you know, double it or we're gonna get 50% more or whatever. That sounds good. And it might seem like how hard can that be? That's only one major gift or whatever. But the reality is I agree with you. I think that can become really tough because we are still in flux. The other thing too, I'm wondering before we move on and maybe Marnie has thought of this or not but in the very first question, I think you mentioned the budget is a living breathing thing. You should be reviewing every month. You should be reevaluating. Would you say the same thing about your fund development goals? I would. And I also coach to say, okay, let's have a 12 year goal. And let's also forecast when funding will be coming in. So for instance, if you- For 12 months? For 12 months, you can go out further if you can but at least 12 months. So for instance, if you're writing a grant and let's say you submit the grant in January and the, you know, the document state that they make the award and the funds will come to you in April, then you can see by way of probability in previous history, you know, okay, we have a really good chance at bringing in this award. Therefore, we are going to, you know, forecast that these dollars, let's say $50,000 will actually come to us in April. So you can start to see a cashflow forecast. And that will also really help. And then of course, if anything else comes up, you know, a lot of funders were very generous during COVID and they said, use the money, however you need it unrestricted as well as we have additional money to give you. So, you know, Marnie, you might be surprised but I would go back and review this regularly, quarterly, monthly, but yeah. So I think, before we move on, I think what I really liked, what I heard you saying is that really don't just like pick a number but do the deeper dive and heavier lift and write out what you anticipate that revenue to be moving forward. That's going to help your finance, you know, your accounting department, you know, the bookkeeping board loves it. Yeah. And it should be, I think a practice because otherwise you get to December and you're like, well, we had a crappy year, right? You know, versus saying, okay, this is, you know, this is the journey. Where do we need to shake things up or pivot or, you know, look for new opportunities? So. Like some organizations, Julia, you know, they may have pledges on the books and so that is something else to consider is, you know, are we still in a pledge cycle? How many monthly donors do we have? And so I really want to coach you and ask you to identify where will this 5%, 10% increase come from specifically? Maybe your event revenue is decreasing, right? But your major donors are increasing, your monthly donors are increasing. Maybe you have a plan gift in the way. So there's, you know, I really think you should look at this increase and identify where from your revenue streams do you anticipate that money coming from? Okay. So we have time for one more question and we're going to have to go quickly because our... Okay, so name withheld Seattle, Washington. We have an opportunity from an amazing donor to give our small staff holiday bonuses. I am Anna Quandre. Our donor wants to go out and purchase Amazon gift cards. What do you suggest? Very interesting. I know. What do you say, Julia? You know, my first thought is, and I'm probably, I know you're going to say something different, but if I am not mistaken, you need to be thinking about the tax issue because technically, and I don't know the number, I'm not a CPA, shock. But you know, when you do this, this can become taxable income, correct? So you need to be thoughtful about this. And you know, I'm all about living local, but I also think the Amazon piece, it's probably easy to do. I don't know, Jarrett. I do recall that we've talked about these gift cards being taxable and that's definitely something to consider. I always advocate for polling your staff. What would they appreciate? In the past, I've received grocery gift cards. It's nice, but I don't know if it was, again, an accounting nightmare or if those eyes and tees were dotted and crossed. I'm really not sure. So there's a lot to think about here. I think, again, going back to your team, maybe they just wanna have something festive, maybe they wanna a day off, maybe they want an extra 40 holiday. Think about that. Interesting. Well, you know, it's, I love that a donor wants to do this. I mean, I really do. And there's a part of me that says, and this is probably old school, but if a donor comes up and wants to do that, then let that happen. If you can cultivate them in other ways. And so I don't know, I'm kind of in a quandary over this, but I'm thrilled for you and Seattle, Washington. Yeah, because, you know, that's awesome. Hey, before we go, I wanna plug the nonprofit show viewer survey 2021. Look at the sexy QR code. Love it. Please take it. Take out your phone right now, hold it over in the photo mode and camera mode, and then it'll take you right to the survey. No more than three minutes, but we really need to get your feedback. I would love it. Again, Julie and I are meeting today, team meeting to discuss next year, 2022, and would love to build the episodes based off of your interest and your needs. And so yes, please do participate in the survey. It's really fun. We will talk about what we found once we get it done and all the data is analyzed, but literally no more than three minutes. You can do it on your phone. It's super easy. It helps Jared and I so much, along with our producer, Kevin Pace, to figure out, are we delivering a product that really helps you and your nonprofit? So we definitely wanna know how we can serve you. I mean, it's so hard to believe that we're moving forward. Hey, again, I'm Julia Patrick, CEO of the American Nonprofit Academy, been joined today by the nonprofit manager herself, Jared Ransom, CEO of the Raven Group. Again, we wanna thank all of our presenting sponsors. We are gonna be debuting some new sponsors, I think, in November. Exciting, very exciting. Yeah, we're really excited about that. So look for that. And wow, it's been a great week. I really loved the iBailey mini series on cybersecurity. Freak me out, but in a good way. Yeah, I know. I learned a lot. Michael Nugier was fantastic with iBailey, director of cybersecurity. If you have not checked out iBailey's website, please do that. A lot of information. And if you missed any of the episodes, they are recorded and on our archive channels plural. So you can find those and it's worth a listen and it's actually worth a replay. Absolutely, it really, really is. Wow, well, Jared, another great week. I'm so, so pleased that we could be together. And as we like to end every episode, what do we like to say? We hope that you will stay well so you can do well. Have a wonderful restful weekend. We'll see you here on Monday. And happy Halloween. Yeah, happy Halloween. Thanks, everybody.