“I just don’t know how to answer that question,” he said. The speaker was one of 110 nonprofit executives attending a leadership summit in Westchester County, NY at which I was a presenter. He was stumped by a question that had appeared on a grant application. One hundred and nine of his colleagues nodded their head knowingly as he spoke, signifying that in one form or another they too had been queried along the same lines and were also having trouble finding an answer.The question? “Can you demonstrate that the program for which you seek funding is sustainable?”
It is, of course, almost laughably ironic. Several years ago when General Motors, AIG, Lehman Brothers, and other icons of American industry and finance toppled, and the country spiraled into a serious recession. As a result, some of the richest private foundations in New York City started to ask nonprofits to demonstrate their sustainability! It’s still a legitimate question, and failing to provide a satisfactory answer may cost you a grant, which is no laughing matter. Whether in a proposal or at a site visit or meeting, the question has to be seriously addressed.
Let me suggest a few things to consider.
First, there is a certain mythology around the concept of sustainability that is at the root of the anxiety the question triggers. An organization cannot be expected to demonstrate that it is sustainable in perpetuity. It is neither realistic nor appropriate to demand an open-ended projection of program or organizational viability extending to the fuzzy horizons of the indefinite future. If you examine your assumptions about the meaning of sustainability, you will reduce the stress associated with this concept. You will also realize that the funder could not have shared those assumptions!
General Motors was the global sales leader in cars and trucks for 77 consecutive years. One year prior to its collapse, Enron was praised for its forward thinking and projections of future growth. AIG, with assets of $800 billion, was the 18th largest public company in the world and was held as a model of sustainability. Merrill Lynch, a trillion-dollar colossus, was 6 years short of its centennial when it was forced to sell itself to the Bank of America for $50 billion-the same day Lehman Brothers filed for bankruptcy. Executive directors cannot be expected to issue guarantees against an unforeseeable future.
Second, if sustainability is not forever, it is at best a forecast limited to a finite, manageable period of time. What is manageable? Generally, three years is about as far ahead as you should reasonably project. The beginning of your answer to the sustainability question is to give the funder a precise definition of the period for which the forecast is expected to be valid. If you can only forecast sustainability for 18 months, then let them know that. You can project a longer time by outlining the conditions required to be successful: “Beyond the 18-month period,we are striving for an additional 18 months assuming that we have your support for the 2nd and 3rd year, plus we are successful with the challenge gift being presented by our Board of Directors.”
Third, sustainability is not a tangible asset like a building or a vehicle. It is not something you ever have at a fixed moment in time. It is intrinsically an aspiration, like “peace,” “justice,” “prosperity.” In the absence of a crystal ball, what you can demonstrate to a funder is that your organization has the capacity to approach the objective of sustaining itself across the immediate future. By the way, the nonprofit executive who initially raised the subject of sustainability represented an organization that was 91 years old! Surely they have done something right to be around that long. I encouraged him to reference their longevity as a strong indicator that they can sustain their work: past performance is a solid indicator of future success.
With these considerations in mind, here is how I would answer the question:
“We at Community Human Services (CHS) define sustainability as a forecast covering the three years that lie ahead of us. If awarded funding, we are committed to sustaining our programs through this period of time.”
“Our capacity to sustain CHS is multi-faceted and based on a neighborhood and programmatic commitment, a diversified development plan, a strategic fundraising plan, and a vibrant organizational culture.
“CHS has a programmatic presence in our local community and a network of loyal donors who value the work we are doing. Because of this neighborhood commitment, we are certain that individual giving will continue at a steady pace. We appeal twice a year to our donor base, and remain in touch with our donors through mails, newsletters and our annual phone bank.
“We have a contract with the New York City Department of Education running through 2012, to operate a Get Ahead Program, at nearby Bright Prospect High School, for 125 at-risk, disconnected youth. However, CHS’s approach to development is well thought-out, consisting of revenue diversification by introducing new sources of government funds to the agency, funds that are consistent with our program expansion and quality enhancement goals. Our development plan is revisited annually and updated accordingly. We enjoy immediate enhanced capacity for applying for new government funds through our contractual association with LAPA Fundraising. This association allows us to be vigilant about finding new sources of funding and applying for them.”
“In addition, in recent years CHS has greatly increased its private fundraising efforts. We have accelerated our research and proposal submissions to the private and corporate foundation community. We have also upgraded the sponsorships for our annual events and increased the revenue realized from this source. Through these and other efforts, we are continuing to diversify our funding base and enhance our ability to sustain programs after the period of government support comes to an end.”
“In the past year, CHS has approached several new grantmakers for support, and we are pleased to report that we have received grants from the A Foundation (for $25,000), the B Foundation ($20,000), the C Foundation ($15,000), and D Corporation ($10,000). CHS currently has 26 grant proposals pending,requesting a total of $625,000.”
“Working with our Board of Directors, we have developed and implemented a strategic fundraising plan that will include an expanded annual giving program. Building a larger individual donor base will complement CHS’s successful grantseeking program and help ensure our financial future.”
“Our past record is a superb indicator of future performance as it demonstrates that this agency is nimble and in-touch with current community needs. But we know that at the end of the day it is the vibrant organizational culture of CHS that sustains our ability to forecast for the future and work toward implementing our dreams for the civil society we seek. At CHS, sustainability overall means that we pay attention to our ongoing cash flow needs, and make sure that we are not dependent upon grants or any other single source of funds. We plan ways to grow our endowment, and we also continue to go deeper within the funding sources that make the most sense for us.”
“Should you approve our grant request, we will issue a press release and an email alert stating that you have funded us and calling for others to contribute to match your grant. We will especially let our local legislators know as well and ask them to work with us to submit city council applications for additional years’ funding.”
I hope these suggestions on answering the sustainability question prove helpful to your organization. I would be curious to hear of some ways you have responded to the sustainability question, please leave your comments below.