Nonprofit – The Step Child of Business – Interview with Nonprofit Expert, Sherita Herring
Nonprofit – The Step Child of Business – Interview with Nonprofit Expert, Sherita Herring
Nonprofit – The Step Child of Business
Interview with Nonprofit Expert, Sherita Herring
Operating by her motto “You Are Your Only Limitation (YAYOL)”, Sherita Herring is a motivating speaker, radio personality and best-selling author.
She has successfully raised over $30 million and formed more than 600 businesses operating globally, including in more than 17 countries. She’s a sought-after speaker, motivator, best-selling author, radio personality and business strategist.
For more than 27 years she has tirelessly worked behind the scenes coaching, facilitating and/or strategizing with some of the top social entrepreneurs, celebrities and organizations in the world: Former President of Mexico, Vicente Fox; U.N. Ambassador Byron Blake; Parliament representatives of Trinidad; legendary actress Tippi Hedren; Oscar Winner Hilary Swank; NFL Great Jim Brown; NBA Star Jalen Rose; Hall of Famer Bootsy Collins; Producer/Actor Bill Duke; Actor Anthony Anderson; Comedians Michael Colyar, Kim Coles, and Eddie Griffin; Motivational Speakers Les Brown and Lisa.
Points for the interview:
What motivated you to work in the nonprofit industry, coming out of corporate America?
Most people are unaware of the impact of the Nonprofit area, why is that?
For nonprofits that have not been successful in their pursuits for grants, what strategies can you suggest?
Can a nonprofit make a profit?
Watch the Interview
Read the Interview
Hugh Ballou: Greetings, welcome to this session of The Nonprofit Exchange. Our guest today is a longtime dear friend. We call each other brother and sister. A friend Sherita Herring and I are so aligned in philosophies and mechanisms and systems. Sherita has got a whole lot more experience in the nonprofit realm. When I talk about you, I say this is the queen of nonprofits. She has got it covered. There is no way I can talk about the vast experience that you have and the knowledge base you have and your passion for working with people and helping them get launched. Sherita, would you talk a little bit about yourself? Give people a little background. Who is Sherita Herring? Why are you talking about nonprofits? Then we will kick into the topic for today.
Sherita Herring: I didn’t know that I was going to step into this arena, but Hugh, all my life—and I always tell people this as I am teaching now—I have been that person, even as a kid, I wanted to go and help Mr. Brown as he was raking, or if there was a kid at school who was bullied, I was the one who had lunch with them. Whoever we are and whatever we do shows up early in life. When I relocated, I actually took my young sons and moved to Los Angeles back in July 1988. I had the opportunity in November ’88 to start working at a YMCA, and I came alive. I was loving life anyway. I was working for Sprint, teaching and speaking actually, a trainer for Sprint. But I didn’t know, you know how you don’t realize that you don’t really have it great yet until you step into greatness? It is like the YMCA brought Sherita Herring out. From there, I started there in ’88 and quit in ’94, starting the KI Foundation.
Hugh: What does KI mean?
Sherita: It stands for Kreative with a K. Kreative Images Foundation. We are actually working on our name change. After being in business almost 30 years, the same way that when I work with my clients, you don’t want to lock yourself into something. When a lot of people hear Kreative Images, they think I’m a graphic design company or something like that. I was a computer trainer also. I’ve done graphic design. But the reason why I named it that is I help people with creative strategies and how to work in their passion creatively through grants and nonprofits. I thought I would do something cute and call it Kreative with a K. When you’re naming something, you have to watch how you’re branding. When I initially started, I kept having to say Kreative with a K. If they can spell, they won’t find me spelling it correctly with a C. That is the story of Kreative Images.
Hugh: We have an interesting topic today. It’s Nonprofits: The Stepchild of Business. What is that about?
Sherita: I call it “stepchild” because think of the redhead stepchild on television, or you think of Cinderella. Cinderella was doing a whole lot of work behind the scenes that nobody else saw, but she received less attention. People don’t realize the impact that the nonprofit arena has, not only in the United States, but across the globe. Something as simple as we recently were in a down economy from 2007-2009. Tactical Philanthropy and Johns Hopkins University did a study over 21 states. While the for-profit arena was laying off by 3.3%, the nonprofit arena was increasing by 2.5%.
Hugh: Say that again.
Sherita: As the for-profit arena was laying off 3.3%, the nonprofit arena was increasing by 2.5%. The crazy thing is I don’t see why our economists don’t talk about that.
Hugh: They’re too busy talking about the minor things they think they are going to drive traffic to their website. This is stuff of substance. My word. Sorry to get you off track there, but you threw that statistic out. That is crazy. When was that point in history?
Sherita: That was 2007-2009 when they did that study over 21 states. The nonprofit arena is a trillion-dollar industry. I think it’s the third-largest business sector in the United States.
Hugh: You are throwing out some awesome statistics. You came out of the business arena to purposely move into the nonprofit arena, right?
Sherita: Yes. Like I said, I was working for Sprint. I loved it, but it just wasn’t- I don’t know. My soul wasn’t coming alive. I didn’t see myself being there for the next 20 years. I relocated to Los Angeles and just happened to- I was working for a temp agency. They sent me to the YMCA. I started out at the headquarters, which was perfect because I worked for the CFO, the Chief Financial Officer. I saw how the YMCA handled endowments and grants by working for the CFO at the headquarters. When I moved then to one of the branches because as a single mom, I realized that if I worked for a branch, my sons could take more advantage of the programs and services. As an employee, it was free. That worked out for me, and for them, too. I became a grant writer and fundraiser for the organization. doing fundraising campaigns. It truly immersed me into this arena. That is when I came alive. Oh my God, I found my home.
Hugh: Ever since I’ve known you, you’ve had this exuberance and passion for the work that you do. You want to help people. You have a nose for figuring out where the money is. Let’s talk a little bit about that piece. You worked with YMCA and did grant-writing. Right now, you are teaching people how to launch and grow their nonprofit and make themselves fundable. You and I are on several projects together. I very much appreciate being on projects together because I know that if you’re in there, you’re taking care of some of the substantive parts that people sometimes do wrong. I’m working on the people part: How do you integrate the strategy and performance? That is where a lot of businesses, nonprofits, churches have their downfall. You don’t write grants now, but you help people be fundable. You’ve got this business expertise, so you’re not just blowing smoke when you’re talking about how we install some of those principles into a nonprofit. Where are some of the gaps in the nonprofits where they don’t really understand some of those systems that businesses use to make money?
Sherita: There are so many gaps. One of the first things that comes to mind is a lot of times, people put the cart before the horse. They are saying, Sherita, I need a grant. When I look at their structure, they are not ready. Some of them have even been in business for 10-15 years, and they have never gone after a grant. But they have never prepared their documents for a grant. It’s important to be clear about your projects. Project development in narrative form is very important. You are doing it every day, but a lot of people don’t know how to put their programs into narrative form and also show what the outcomes are. They want to hear those hard numbers. Hugh, the same way I gave you those hard numbers and facts about the nonprofit arena and jobs and layoffs, grant funders are reading the documents of programs. No matter how effective you’ve been and you know that you’ve been, you have to be clear with the funder. If you’ve been in business for 10 years, you might say something like, “For the past ten years, our comprehensive programs have affected more than 6,000 youth, 900 families, with 80% of them being African-American, 15% being white, and 5% other.” You have to have those statistics about your programs and services, or you won’t be effective in the grants arena.
Hugh: You and I meet a lot of people when we go to conferences and other places. I want to see if you see the same thing. A lot of people think, if I just had money, I would be successful. When in fact what you just pointed out, they are not ready for money. If they had money, they wouldn’t use it wisely. They don’t have the structure or programs in place. They don’t have the plan and the team. Besides having those things in place to be able to attract the money, even if they got the money, it wouldn’t help them. What is your read on that?
Sherita: Well, it’s like any business. First of all, that’s why I call it stepchild of business. It is a business. It is actually a corporation. With any business, you have to know how to operate that business. You have to have good management. You have to know how to brand your business. You have to know how to operate. When you write a grant proposal, most don’t realize it, but it is a business plan. It’s just to those other investors. Grant funders are investors. When you are submitting to them, the same way you would do for a nonprofit business, you have to be on your P’s and Q’s, and they have to be able to see that through narrative format, which is your presented business plan or grant proposal.
For instance, I pulled up at a restaurant I used to love in LA. I hadn’t been there for a while. I had been telling a girlfriend of mine who came into town, her husband was coming in the next day, and I was telling them about this restaurant. When we pulled up, the restaurant was closed. I came to find out that it had been closed due to poor management. Even in this stepchild of business, you have to be able to know how to manage your business.
Hugh: That is so crucial. Russell and I have been on a journey together. He has come on as a WayFinder in SynerVision. Let’s let people know that SynerVision Leadership Foundation, you helped me set that up initially and create the 501(c)3 and launch this thing. That was 2010, I believe. Since then, we have published a magazine for three years, we have had this interview series for three years, we have tens of thousands of listeners to this at this point, and we have a community for community builders, which we are rebuilding. And I don’t know if you know this, but I have done 25 live events in the last two years, impacting 22,000 people live and virtually.
Sherita: Those hard numbers.
Hugh: We are in a place that we could start moving into the grant space. We primarily have generated revenue from business dreams, event registrations, sponsor dollars, and donor dollars. We have done that kind of bootstrapping. As you know, I am a recovering Scottish Presbyterian, so frugal is part of my DNA. We are turning the corner in that it’s just a joy to work with such enthusiastic, competent people, as my friend Sherita Herring and my brother Russell David Dennis who have hogged the whole conversation. Say hello to Russell. Do you have some thoughts as to what we’re talking about? Do you have some thoughts to interject, but also questions?
Russell Dennis: Things are getting very exciting in this sector. It’s something I had a heart for, but I didn’t know it until I met Sherita at CEO Space. I started dipping back into that experience I had at the tribe. All of the struggles by not having a diverse funding source. When I took that job, Sherita, I didn’t know what I didn’t know. If I had known how much I didn’t know, I might have run for the exits screaming, thinking, I am getting over my head. When you are in the middle of it, you have to do it. This is passion. Passion is really important. You really have to know why you’re doing this because there are going to be some days that are just a challenge. That why is the only fuel. That said, knowing what you know and what you don’t know is critical so you can go out and ask questions. That is what we’re talking about here as far as being able to communicate what your passion is about and what you’re doing and systematically going to look for all sorts of resources.
One thing I don’t think people think about when it comes to grants is did they actually invite me to apply, or did I talk to somebody on the ground before I wrote the application and stuck it in the mail? I think we are starting to understand how important relationships are. It’s best to take the time to look for people who are in alignment with us and write a few applications than to throw a bunch out and burn a lot of time. That is really important. But this work of laying that foundation for explaining who you are, I have watched you try and do that with some small organizations. You ran into some difficulties trying to help people. What do you find are some of the biggest struggles that people have when they are trying to get something off the ground? What is it that you find stops people in their tracks more often than not?
Sherita: That’s another reason I call it stepchild of the business. People expect in the nonprofit arena that when they submit one grant, they should get that money. Even if it’s a great proposal, maybe that funder had already dispersed all their funds. With Hugh and helping him form SynerVision, we formed over 600 organizations operating globally. Nothing hurts me more than when I run into someone after a year or so and ask them how they’re going, and people say, “I’ve got this little nonprofit,” like it’s a hobby, instead of seeing it as a business. They say, “I let that go. I submitted a grant, and I’ve been told not to step into that arena. After I didn’t get that grant, I just let it go.” But they have been operating in their for-profit business and looking for investors for 15 years, and they don’t give up. That is what I mean: treat it like a stepchild of business. When you asked what are the main things I run into, again, they expect more from this industry without putting as much in. You cannot have a business that is going to thrive and survive if you’re not putting the equity into it. So many people step into this arena expecting it to be like magic. With grant writers, they expect magic from grant writers. But a grant writer is just like someone writing your business plan. They can only make that plan as good as the information received. That is why when I am teaching grant writing now, I mostly teach to managers and executives of nonprofits because they need to know how to initially get their own money before you can expect someone else to go and get your money.
The three of us met at CEO Space. I am going to say this, and then I will shut up and let you ask another question. I still today think CEO Space is the premier business conference in the world. I met you guys there. Most of the individuals that I interact with now, and even if I vacation, I am going somewhere where there is a CEO Space grad. Like the three of us, it brings individuals that are the thought leaders of the world together. I just wanted people to know that probably did not know about CEO Space: When we say that, that’s a business forum. I wanted to explain that really quickly.
The other thing is had it not been for CEO Space, I’m a grad from 299, February 1999, and I have been faculty there since 2008/2009. I went global in 1999 within three days of being at CEO Space. It was CEO Space that launched me further into the stratosphere because they bring entrepreneurs together from all over the world. Once I started working with those individuals from either Paris or Canada or Nigeria, you don’t have to actually go somewhere for your footprint to show up there. I have pretty big feet, literally. But I have a footprint now all over the globe. I just want to personally and across social media thank CEO Space for that.
Hugh: It’s a global network. You’re right. You meet influencers there who have a wide footprint. Every time I see you there, it’s like you’re giving away free money. People are all over you. You’re just Sherita the Magnet.
You were talking about- We are using business terms. People who give money to the charity are investors. In a business, they are looking for return on investment, which means they get growth of their money. In charity, it’s a different form of results. The ROI is a result of impact. They are investing in the impact. I’ll ask Russell to talk about how he talks to people about donating and being on the board. He interviews people about what they’re interested in.
There are a couple of Rs here. You get to have a conversation. Russell alluded to it earlier. I want you to talk about relationships inside of these foundations. I call this ROR. Return on Relationships. To me, people donate to you because you have a relationship, and they see value. They won’t do it without the relationship. Creating a relationship with a company for a sponsorship or foundation for grant. There is a relationship piece there. Ultimately, what people are funding is ROL, Return on Life. What these social benefit organizations do is they add value of life to communities where they work, locally or globally. I was with one that is in the early stages yesterday. We did their strategy where they could start looking at what kind of competencies they need and where their revenue is coming from. I read the brilliant narrative you wrote for their 1023. Looking at all of the pieces to the puzzle is fascinating. Our job as resources for these entrepreneurs, or people who look at shiny objects, our work is to help them stay focused and in sequence and help them locate resources that will let them be successful.
Go back to my return on relationship and cultivating relationships, assuming you have the data that says, “This is how we’re organized. This is our team. This is the impact we are going to create.” Talk about creating relationships in the different sectors where funds come into our business charity.
Sherita: There is a few things. First, when we are talking about ROI in the nonprofit arena, that return on investment is the write-off. People say, “What is the benefit of an investor if they are not going to get some money back?” A great write-off is money back. That is the return on investment. Those funders, because they must give the money away, to get that ROI, they are like the kid in the back of the room, “Ooh, choose me!” Then you have someone else reading a book hiding behind their book because they don’t want to answer the question. To me, that is almost like where the investors are. Most people don’t even know where they are. But the teacher, just like those that are trying to do business that are afraid of the nonprofit arena, they are always choosing the one with the book. They are always choosing the one who is hiding because they think that is the better bet. That is how people are looking at grants and investors who are saying, “Choose me,” because that is the only ROI I am going to have, and they are ignoring them. It’s too good to be true.
I also want to talk about relationships. I always advise to be careful about relationships because when you are submitting for grants- For donors, those people who know you and you have cultivated relationships with them, yes, people give to people. When you are raising dollars, that is what happens. When you step into the grants arena, or when you go into sponsorships and are going after a sponsor from Kellogg or Target, it really is supposed to be dependent upon the document that you created. If I can get a sponsorship from the California Community Foundation because of my relationship with someone who works there, that is conflict of interest. An organization is doing wrong by that. Yes, they are supposed to know who you are. You can call to them and talk to them about your program or project. Do not call every grant funder with all kinds of questions. But you can easily call them and say, “I have been reading your guidelines, and my organization is doing this. I am wondering if I am a fit,” and you can speak to their community liaison. You can call with those kinds of questions, but they don’t want you calling as you are going down the guidelines, calling back, “On section six, it says this,” and after they answer that, calling back again, “On section 8…” That is not going to fly.
With relationships, yes, they are important for sponsorships and donations from those who are giving with their own dollar. When it comes from a company, it is supposed to be dependent on how well your document was written and how it fits their guidelines as opposed to a relationship. An organization can be pretty much shut down. That is going against their IRS guidelines and the way they are supposed to be operating as a giver of funds. It is supposed to be no conflicts of interest and solely based off of what was presented.
Hugh: Russ, do you have a question in this arena?
Russell: I love that. Part of that relationship building is what they’re like when you approach these folks that you have done your homework. You ask for ten minutes, and the first question right out of your mouth is something at the top of their website, that is not great. It’s metrics. That sounds like a dirty scientific word, but you’ve got two types of metrics. You’ve got the return as some sort of value that you’re placing in terms of monetary return and a social return. We have this convergence going on with the private sector doing cause marketing with the non-government foundations, nonprofits. You have a convergence of different things. I’ve seen in some articles they actually call it the fourth sector. You have enterprises that come under the umbrella of a group of different types of entities that come together and make things happen. We are looking at value. You have to demonstrate some kind of value.
When you are putting your information together in this wonderful framework, you have probably seen the framework that Hugh and David Gruder built, as part of my WayFinding duties, I like using that because it gives me a baseline to start asking questions. When I sit in front of somebody and talk about these things and start asking these questions, they think, Oh, what is all of this paperwork you got here? A lot of this stuff looks tedious. Some of it looks touchy-feely. But if you don’t take the time to do that stuff, you’re not clear on what it is you offer people. I tell them, By the time we take time to sit down and work through these handouts I have and then we start plugging stuff into this framework, it’s not a full strategic plan, but it’s a framework. Once I walk you through that process, then you have some clarity. You can go out and build these proposals. I think people are under the illusion that if you get some fundraising whiz in, you get a grant writer, all your problems are solved. You can sit back, cut them a check, and watch the money roll in. That’s not quite how it is. Nobody knows your organization like you know your organization.
Sherita: That is right.
Russell: People help you get there. I think part of that appeal, and I love watching you at CEO Space, I don’t get a lot of my Sherita time because the mob is there. But it’s marvelous to watch you there because people flock to you. It’s not just because you’re so wonderful; you’re a wonderful person to spend time around. But people start thinking, I really want to do something. I have a heart for doing something, and it just looks absolutely impossible.
How many of these folks that come here, and I know you’re mobbed all the time, but how many folks that you talk to spend a lot of time talking about that passion but then talking about how impossible it is? What are the first things you say to them to get them over that hurdle?
Sherita: I’m so glad that you ended with passion. What I do, and I’ve learned to do this very well, and I say it is just a God-given talent, which is why I say I came alive in this arena. Sometimes, after I get off a call, and I’m a preacher’s daughter, I’m not ashamed of that, I love that I give praise. When I get off the phone, sometimes I can’t wait, and I get up and pace and say, “Lord, thank you for giving me this avenue because what I do is I help people see the impossible is possible for their passions. Even if you are a dog walker, you’re walking past individuals who need you, but that dog walker isn’t aware there are grants for them to walk seniors’ dogs and the disabled and individuals whose homes they are walking past that need their service.
I talk to Harry Lay all the time about grants for fishing. Harry, as much as you love bass fishing, you could take a few seniors, and that is a senior program. Grants will cover that cost, get you a few more bass boats, pay you a salary while you’re out with those seniors. I show the impossible is possible. My business has taken a total turn. I had no idea I would be working with individuals and truly be helping them find profit for their passion. Sometimes someone at CEO Space is dragging someone down the hallway saying, “Tell her. Tell her what you do!” I haven’t been stumped yet.
I had a guy who wrote on one of my evaluations, “Though I thought the class was wonderful, I didn’t come here to go to church.” I’m not trying to step on anyone’s toes, but whether you call it God or the Universe or Mother Nature or whatever, there is no way that something is in you that you passionately love, it’s been trying to creep up in you since you were a child, you’d eat, sleep, and drink it if you could, there is no way, I feel, that God would put that in you and you can’t survive off of it. I honestly know, and this arena has shown me, how I can help people with this. With faith comes finance. If you find out who you are and live and start to operate from your true inner core, there is funding for you. You will see it thrive, and your life will change.
For instance, there is a CPA when I was teaching for the Learning Annex in San Diego. I ask the room, “Why are you here? What do you do?” He said, “I am a CPA. I make good money.” But he had this wrinkle on his face, as if he was mad about being a CPA. I asked him if he was mad about it. He said, “I make good money. I like to make good money.” But his eyes didn’t dance. I said, “You know what? If you had three days to do absolutely nothing,“ and I wasn’t able to finish my sentence before he got on the edge of his seat and said, “Ms. Herring, when the tide is high, even if it was a work day, I got my wetsuit on!” His mannerisms changed. His eyes danced. His body language, he sat up on the edge of his chair, and he forgot there were other businesspeople around. That is what I am looking for. That is what I want to help people do. When I can reach your soul, I guarantee you there is funding for you, and you will not regret stepping into this arena.
I have been doing this for almost 30 years. I still get chillbumps. We are in a time right now when people are more unhappy than any other time. We are at a time where men spend an average of 11 hours more a week than women in leisure time, but even myself, I want to work. I want to fry the bacon, put it in a pan. But what we don’t realize is when we get home, we are still doing a lot more at home than men. Women are stressing more. 85% of people across the globe spend 8-9 hours a day in jobs that they despise. This arena that I’m in is helping people to love what they do every day. It’s changing lives. You guys, the excitement I know will never die for me in this.
Hugh: I love it. I was working with our friend Philip yesterday on his-
Sherita: Oh, Mr. Auerbach.
Hugh: On his foundation. A friend of mine called us and said, “Why don’t you come over?” He founded Stop Hunger Now, a worldwide nonprofit. You may have heard of it. They are going to pack 88 million meals this year. Their vision is to eliminate hunger. Period. The UN has come on saying they can eliminate hunger by 2030. Organizations that do that have high impact. As we were talking about the vision and the mission and the unique value proposition and solving the problems, he said, “We need to define the impact of your work.” Most people aren’t aware of the impact of nonprofits globally or even in their area. We are not very good at describing it. Talk a little bit about how do we as leaders focus on the impact that we have, how do we define that, and how do we share that?
Sherita: Are you talking about leaders in general, or are you talking about as far as the information in their documents?
Hugh: Leaders in nonprofits. I see a lot of documents that don’t have it. But generally, when they talk to their board, they speak at rotaries, they send out newsletters. How do they get their head around having to talk about their impact to people? How do we help people get their heads around defining that impact that really is part of attracting the funding they need?
Sherita: In the nonprofit arena, they call it deliverables. How do you define your deliverables? If I am talking about KI, and someone asks, “Sherita, how do you define your deliverables? What impact have you had?” I may say, “Since 1994, we have formed over 600 organizations. I have aided in raising over $30 million, coaching global leaders like Vicente Fox to those who are working in the trenches in Skid Row in Los Angeles, California.” That is a snapshot of the impact. Can I put that in writing with more information and showing deliverables? Absolutely. We are often caught up in the day to day, and we are not tracking our deliverables. Most people aren’t used to doing that. They say, “Sherita, I don’t like paperwork. That is not what I do.” You can set up a simple spreadsheet in Excel that can track your deliverables.
For instance, one lady with child care. People will brag about what their organizations are doing, but they don’t know how to put it on paper. She said, “Sherita, I have been in business for 27 years. I have had over 7,000 children that have gone on to college.” I asked, “How do you know?” She said, “I talk to the parents, and some of them come back and work with me.” I asked, “Are you tracking that? Do you have something that shows those 7,000?” “How would you track that?” “Everything you do, there is a way to track.” That is why, when I am forming an organization, I am showing them how to develop their tracking mechanisms. She added, “They all end up being leaders.”
I said, “Let me break it down to something really simple. Let’s say we start from today. How are you going to track, if you are working with five-year-olds, if they already have a leadership mentality?” She said, “How would I do that?” I said, “Start out with an initial questionnaire. You could ask something simple as five questions, one of them being, ‘If your mom pulls up at a birthday party, do you 1) sit in the car and wait for your mom to get out and take you to the party, 2) go out and up to the porch but don’t go in until someone comes up that you know and goes with them, or 3) get out of the car with hardly saying goodbye to your mom and run straight into the party?’ What do those three options answer? If the child says they sit in the car and wait for their mom, the child either has low self-esteem or he needs improved communication skills. The one who stands on the porch, he has good leadership, but maybe his communication skills are lacking, so he doesn’t want to go in and talk by himself. He waits on a buddy. But that third option is a leader. He is going to charge straight into whatever he is going to do.”
We can identify our deliverables in so many ways, but organizations don’t know how to do that. That is one thing I do in helping individuals with grants: showing them how to track their deliverables.
Hugh: Russell and I embed that in their culture from the beginning. In our planning meetings, we don’t use the word “agenda;” we use “deliverables.” What are our deliverables for this hour, this day? What are we going to accomplish? We define the outcomes.
We talked about this earlier, but I want to see if we can put it in capsule form. Go back to why nonprofits don’t get funded. You talked about that. I want to isolate it here because there is so many people who say, “I tried this, and it didn’t work.” I want to say, “I wanted to lose weight, so I tried running one day last year, and it didn’t work.” Let’s get our heads around that. What keeps us from getting funded? Let’s isolate grants.
Sherita: Well, again, the deliverables are very important. Just like when we go to CEO Space, what are individuals learning all week? How to raise what? Capital. They are learning the strategies, how to develop their business plan, language, requirements, how to talk to investors. But the moment someone steps into the nonprofit arena, they say, “I don’t want to learn that. A grant writer will learn that.” Why is it that people will learn all the steps they need to get funding for their for-profit business, but they don’t want to learn that in the nonprofit arena? By not learning what is required in a grant proposal, what is the language of the nonprofit arena, they won’t even recognize if a grant writer is qualified. I had people say, “Sherita, I brought in nine grant writers, and none of them were successful.” I said, “What do you know about grant writing?” “I don’t want to know that.” “Have you ever looked at a grant application?” “I don’t want to know that.” Then how do you know what they wrote was effective, was really who you are, was showing your deliverables?
Also, when someone goes to a meeting, Hugh, when you go to CEO Space or another conference, you come back with cards that you’ve made notes on as to how those individuals can work in your strategy or whatever. If someone is constantly at meetings where the grant writer is not, they are networking, they don’t know to bring that information back to the grant writer. That is planning and development funding. Those who are listening, if you go to Google and type in “grants, planning and development,” look at the grant funders that come up. “Grants, strategic planning.” “Grants, management training.” There is grants for all of that. If you don’t know how to put that on paper, you are expecting a miracle worker of the grant writer, but they are not at all those places where you are networking, so they don’t know to bring that information back and resources of who you’ve met. If you as the executive understands this process, you will know that this is a great possible collaboration. Grant writer, I want to possibly collaborate on them for this, this, and this. You are steadily funneling information in to your grant writer.
Let me say something about grant writing. People have said, “Well, I want to hire a grant writer, but I want to pay them after the grant is received.” Again, misunderstanding about the industry. A grant writer is a business plan writer. How many individuals would write a business plan for you in the for-profit arena and get paid on the contingency of when you are going to get an investor? No. Grant writers are paid for the work they are doing at that time. To expect a grant writer- They are running a business also. You might not get that particular grant. People expect grant writers to guarantee the grant. Who writes a business plan and guarantees that? You have to have the same expectation. This is a corporation. This is a corporation business. All nonprofits must be a corporation before they submit that form 1023 to become a tax-exempt corporation. Again, it’s about individuals learning the industry.
The other thing as far as grant writers. Russell, you said something a while back: you didn’t know what you didn’t know. I also train grant writers because many of them have worked for a company- Let’s say one of them worked for Children’s Hospital. She was very successful in getting them millions of dollars. She decided to start her own business. She was recycling grants that others had already written. She didn’t realize what she didn’t know until she started her own grant-writing firm. She didn’t understand project development. That hospital was already developed. It already had relationships. It had already been funded. She is going out and trying to work with someone who had never received a grant before, didn’t know about collaboration or strategic planning. That grant writer didn’t know what she didn’t know.
If you got someone who is hiring this grant writer, and they don’t know that she doesn’t know what she doesn’t know, what kind of success are you going to have? She is not trying to mislead you; there are just things she didn’t know that she doesn’t know she doesn’t know. But if that executive understands grant writing and the kinds of questions a qualified grant writer should be asking, that person would not hire that grant writer because they would hear it, the same way if you are hiring someone for a position, you can tell who is qualified for that position and who is not. When an executive is ignoring the fact that they need to know about grants, they are hurting their business, and they will not see success.
They also need to learn the language of the nonprofit arena. In the for-profit arena, the individuals you sell to and work with are called your customers and clients, and in the nonprofit arena, they are called target population or program participants. When you are raising dollars in the for-profit arena, you say you are raising capital. In the nonprofit arena, if you say you are raising capital, a nonprofit investor might be hearing you, but you don’t realize that most of the time when you say capital in the nonprofit arena, it’s for bricks and mortar. It’s for a building or to rehab a building. Maybe that investor who is listening to you only gives dollars for salaries and programs. Now you have missed that investor because you are not using the right language.
Hugh: That makes sense. Russell, what are you thinking?
Russell: Language is everything. Out of those four steps to building a high-performance nonprofit, that fourth step is communicating the value. This is where people miss the boat. If you are not clear on value, there is a sense that we are walking in here, “Oh God, please give us some money because we are helping some really sick children. We really need this money.” What you’re doing as you are walking in is offering value or a service that either a business or other government entity- Nobody is positioned to do the things that you can do. You have something that you need. You are filling something that is not out there. People don’t understand that. They will teach that in business school.
How do you differ from other people in the market? Differing is not a bad thing. Who else is doing the same type of work? Are you duplicating this? If it is similar to somebody else, are you benchmarking on somebody who has been doing this very successfully? Who are your partners? Nowadays, they expect you to play nice and collaborate. Sherita remembers a time back in the old days, when you did a collaboration, we did a manufacturing collaborative with all five of the tribal communities up in Maine about 20 years ago, everybody was really excited because that was unusual. It is expected now. You have to know how to play nice with others.
Sherita: Even for-profits are collaborating. In the nonprofit arena, we say collaborate. I am starting to hear it more in other industries, but it’s always-
Collaborations. Those are collaborations. They are collaborating because it brings more customers in the door. You are serving a broader range of people than you would have been on your own. This is why grant funders want to see collaboration. They want to see a bigger bang for their buck.
The nonprofit arena operates so similarly to the for-profit arena, but people think it’s different. It’s not. Just because people think the term “nonprofit” is not about making profits, people say, “Sherita, I need to make a profit.” If you have multi-million-dollar organizations, they must be making a profit. Nonprofit doesn’t mean you can’t make a profit. It is a non-stock corporation. There is no stock because the return on the investment is the write-off. They are not waiting on money back. That is why the conflict of interest in relationships should not exist. That is very important.
The other thing is that just like Philip Auerbach, who we were just talking about, Philip didn’t know he could have a nonprofit. He transcribes information in more than 80 countries so that people can communicate across languages. He did not realize there were small nonprofits and schools and other organizations that need that service that cannot afford the service. People think when you step into the nonprofit arena, you have to start another business and do something totally different. No! You have customers here or clients who can pay for your service or receive whatever you do, and you have individuals here who cannot. All grants do is even the playing field. The charity is not you working for free; it is the individuals able to receive your service at no cost or a lower cost because the grants are paying you to do that exact same service. You are just broadening your client base with grants and making a difference at the same time. I love that. No matter what you are doing in this arena, you are making a difference. How cool is that?
Hugh: That is exciting. We are almost at the top of the hour. Sherita, what do you want to leave people with as we close out this amazing interview?
Sherita: I want them to pay attention in order to have impact. See, for instance, if you have someone that teaches a computer class or programming, and he has excellent programmers who are now ready to go out into the workforce. He has a class of ten, and eight of them are excellent programmers, but they don’t even communicate with each other in the class. Are you really preparing them for the work force? To have an impact, watch who you are serving. If they are not communicators, then collaborate with an organization that teaches improved communication skills, leadership development, job readiness or career readiness so that now you stay in your lane, and you collaborate with the others. Now you have well-rounded individuals you are touching. In order to have impact, you have to pay attention to whom you serve.
Hugh: Sherita Herring, you have given us a lot to think about. Thank you so much for sharing the wealth of information with The Nonprofit Exchange listeners.
Sherita: Thank you so much for having me. I am very honored.
Hugh: If you want more information about the KI Foundation, go to kifoundation.org. Thank you, Sherita.