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June 2022

Jun 20

The Milk Bank expands its footprint through an innovative partnership

By Feature

by Shari Finnell, editor/writer, Not-for-profit News

It’s been 17 years since The Milk Bank opened as a nonprofit that provides families in Indiana and throughout the nation with donated human milk. And for years it has faced an uphill battle in helping the community understand the sometimes life-saving benefits it offers to infants, much in the way blood donations are accepted.

An innovative partnership with Versiti Blood Center of Indiana, another nonprofit focused on tissue donation, and the recent formula crisis could significantly change all that.

Jenna Streit, advancement director for The Milk Bank, is all too familiar with the misconceptions that many people have about an organization that supplies parents of newborns and infants with human donor milk.

“I was not aware of The Milk Bank until I was delivering my daughter,” she recalled. “I was having an unexpected C-section and a nurse turned to me and said, ‘Do you want her to have donor milk of formula when she goes to the NICU (neonatal intensive care unit)?’”

A series of questions and doubts immediately emerged in Streit’s mind, she said. “I didn’t know what she was talking about, who the donors were, or about the safety of the milk. It was just so unfamiliar to me, but I trusted my care team,” she said.

That typically is the journey taken by many of the people who have become aware of The Milk Bank, Streit said. “We have been trying to get upstream in our conversations and really try to educate folks early in pregnancy that it could be an option for them. We’ve made good traction this year.”

Partnership built on innovation

The Milk Bank attributes increased awareness about the organization to a partnership with Versiti, formerly the Indiana Blood Center. Although the two nonprofit organizations have similar missions in that they focus on the donation of human tissue, a collaboration didn’t come to mind until The Milk Bank faced an increased need for drop-off locations for its donor mothers.

Through research, the nonprofits found that 31 percent of stakeholders for The Milk Bank wanted more drop-off locations, and 15 percent of blood donors had difficulty accomplishing required blood work.

In 2018, the two nonprofits came together to allow donor mothers to drop off milk at depot locations at Versiti in Indiana and at Kentucky Blood Centers. In 2021, the Meridian Foundation awarded the team a $10,000 Aragos Honors grant in honor of the innovative partnership.

Meridian Foundation founder Donna Oklak, who interviewed members of the nonprofits during the grant-making process, was particularly impressed with the partnership led by Dr. Dan Waxman, senior medical director for Versiti, and a member of the The Milk Bank’s medical advisory committee.

“There was amazing teamwork at The Milk Bank to bring this idea to fruition,” Oklak said. “One ‘aha’ moment, that seems simple in hindsight, was the realization that the blood drive concept could be applied to milk donation. The Milk Bank was able to benchmark and operationalize this idea.  This was when it became apparent that the partnership was more than just a convenient co-location, but also a powerful opportunity to benchmark and share successful approaches in tissue banking.”

Through the collaboration, both organizations were able to increase visibility for each other, create more opportunities to reach potential donors, and provide Versiti blood screening for potential blood donors to become approved human milk donors — a necessary step in the human milk donation process.

According to the organizations, the new strategic collaborative plan also accomplished the following goals:

  • Diversified revenue for both organizations
  • Expanded each organization’s lab and processing staff
  • Enhanced equitable access for all mothers by removing geography and finances as barriers and, over time, will help them reach more diverse families.

Enhancing visibility during a crisis

The five-year-old partnership with Versiti also helped prepare The Milk Bank to handle an increased demand for donor milk during the pandemic and the current formula shortage, according to Streit. The organization now has 70 locations where donors can drop off their milk. (Donors also have the option of direct shipping the milk to the organization).

The milk donations must come from women who have been prescreened through blood tests. From there, the milk undergoes a nutritional analysis, pasteurization and then a sterile bottling process. Then it tested for safety as a final step, Streit explained.

In addition to its partnership with Versiti, The Milk Bank has implemented numerous strategies to enhance its visibility, including promoting testimonials for families who have been recipients of donor milk, implementing peer-to-peer fundraising campaign that highlights the stories of recipients and milk donors, and launching a program, with the assistance of Meridian United Methodist Church, that includes educational materials for expectant mothers.

“We have been helping quite a few families during this time who are who are unable to find formula,” Streit said. “The families that are coming to us typically are searching for one of the specialty formulas that they can’t find on shelves. While this is not exclusively the case, they most often have a baby with a medical condition.

“We definitely have been an avenue for supporting babies during the formula shortage. We have seen a significant increase — almost 90% — in the number of outpatients that we’ve served,” Streit added. “Our donors have been incredible and have stepped up. We typically hear from about 200 Interested milk donors every month. Last month, we heard from 491 potential donors who are excited about helping out.”

Advocating for continuing awareness

The Milk Bank envisions a future in which the need for human milk donation is as accepted and understood as blood donations, Streit said.

“We want milk donations to be seen as legitimate and as equal to blood donations. We are a tissue bank at our core,” she said. “I’m sure it was strange for many people when they first heard about blood transfusions; taking blood out of one body and put it in another. That’s what milk donation is.”

The organization also has taken on an advocacy role throughout its history, highlighting the benefits of breast milk. That cause must continue, Streit said.

“As a nation we are faced with a reckoning on how we are supporting families in feeding their infants. If we cannot safely offer formula reliably, then we need to return to the basics,” she said. “That means how do we ensure that families have every support possible to be successful at breastfeeding? I think more women would choose to breastfeed if they had paid leave after giving birth, safe comfortable places to pump at work and high-quality pumps made available to them.

“Many Americans have a baby and must go back to work within two to four weeks,” Streit added. “Breastfeeding is not even a reasonable option for them. I’m grateful that we can stand in this gap, but I hope that once we get through the crisis at hand, that we look on all that areas that we need to improve and implement changes to support families better.”

Jun 20

Special event season is here! What’s next?

By Sponsor Insight

by John Mainella and Michael Pettry, principals, Cape Fletcher Associates and consulting partners of CICF

The season of special events is squarely upon us in Central Indiana. Whether springtime galas, summer golfing events or the increasingly popular breakfast fundraiser, most organizations are in the midst of special event season.

But special events are a lot of work. Then again, you already know that no doubt.

Here’s where many not-for-profits leave tremendous opportunities on the table. After all the work that brings a special event to life, they forget that the actual value of the event likely lies in what happens following the event. Which existing donors made a second-mile gift or increased their giving level? (A move up the giving tiers!) Who made a first-time donation to the organization? (A candidate for renewal and increased giving!)

We recently had a conversation with an executive director lamenting about all of the time and energy that went into planning and executing an event but forgot to invest intentionality and strategy into what happens in the days and weeks after the event.

Whether you are a seasoned staffer, just starting your journey in development, or a stalwart board member, here are three suggestions to increase the longer-term benefits of your special events.

Record event attendees into your database and segment this group. Organizations use databases for many reasons, but one is especially important: to grow the base of support. Even though a donor may have given at a special event, they should be added to your database and segmented into their own category.

For the next year or so, use this segmentation strategy when you want to communicate with or solicit the constituency. A good rule of thumb to remember is that the likelihood of retaining a first-time donor increases if you make seven touchpoints with them in the first year.

Impact, impact, impact. The donor likely made a contribution at the event as a result of an extraordinary and emotional appeal to support your mission. In the days and weeks following their gift, make sure that you show the donor the impact of their giving. Consider your first touchpoint be a thank you note sent 24 to 48 hours after they donated their gift.

Next, a month after receiving their gift, text or email them a quick 60-second impact video highlighting the work that their gift made possible. Check out this recent study from the Lilly Family School of Philanthropy about the power of video in donor engagement. That subsequent follow-up is a chance to remind them why they gave at your event and show them that you are already putting their gift to work.

Engage them differently. Don’t assume that you will see the donor at next year’s event. Organizations often see a relatively high turnover rate from year to year for attendance at events. But this doesn’t mean special event donors aren’t interested. When we think of the rule of seven touchpoints to retain a donor, build a strategy using your segmentation to keep your event donors engaged throughout the year.
Add them to your quarterly newsletter mailing list. Consider a personal phone call recognizing the six-month or one-year anniversary of their special event gift. Send an email several weeks before the next event with a “Hope to see you there!” theme. Even though the message isn’t overtly asking for a gift, make sure to include a link for donation for people who aren’t able to attend the event.

At the heart of building your culture of philanthropy is a commitment to establishing meaningful relationships with donors and prospects. Of course, special events play a unique role in building relationships with both constituencies, but it is the wise and artful institution that embraces the fact that special events are only the first chapter of a long and meaningful donor relationship.

Founded by principals John Mainella and Michael Pettry, Cape Fletcher Associates employs sound philanthropy practices and effective communication strategies to grow your base of support.

Jun 13

How to comply to new leasing standards for nonprofits

By Sponsor Insight

by Michael A. Staton, CPA, managing director, Alerding CPA Group

As far back as 2016, the Financial Accounting Standards Board (FASB) began discussions on the implementation of new leasing standards. The new leasing recognition guidelines, which outlined requirements for recording almost all leases on entities’ financial statements, met significant pushback from accounting professionals and businesses alike.

Well, the delays are now over. We must all comply with the new FASB standard ASU 842 in 2022. The new standard, which applies to both non-profit and for-profit organizations, became effective for all fiscal years beginning after Dec. 15, 2021. This means that, if you have leases, you must record under the new guidelines effective Jan. 1, 2022. Financial statements for calendar years ending on Dec. 31, 2022 and fiscal years ending in 2023 must be presented with the new standard.

Under the old standards, nonprofits did not record operating leases on their statements of financial position. They simply recorded “lease expense” on statement of activities while making monthly payments. The new requirements were put in place to provide more clarity about organization’s leasing arrangements and cash flow requirements. Donors will now have more information on the future financial commitments that the organization has undertaken.

Leases will be classified as either a financing lease, an operating lease, or a short-term lease.

A financing lease is the same as what we previously called a “capital lease” under the old standards. The classification criteria are basically the same, as it requires the lease term to cover substantially all of the life of the asset being leased, title to pass at the end of the lease or a below market buy-out.

Consistent with current requirements, the lease will be required to be presented on the statement of financial position as “lease assets” and “lease liabilities,” and depreciation and interest will be reflected on the statement of activities.

Operating leases recognition will be significantly changed under the new standards. Instead of simply recording the expenditure on the statement of activities when a lease payment is made, the value of the asset will be recorded just like that of the financing leases. The statement of financial position will reflect the entities “right to use” the asset and the lease liability for remainder of the term. There is no requirement to restate prior years financials for the recognition of operating leases. FASB allows for the assets to be recorded prospectively.

Short term leases of less than 12 months in duration do not need to be recorded on the financial statements. However, if the lease is expected to be renewed annually then the lease should be recorded as an operating lease or financing lease.

There are additional concerns for your non-profit beyond just recording the lease itself. The new leases that you are recording will change the face of your statement of financial position. You will now have more assets, but you will also have more debt. This could cause your ratios to change and potentially make you out of compliance with your bank or financial institution. Your debt-to-net-assets ratio could not be out of compliance, and you could also have issues with your debt service coverage ratio. Please review these ratios with your lender in advance of issuing your year-end financial statements.

For more guidance, contact an Alerding CPA Group account representative to discuss these and any other issues you might have.

Jun 06

To apply — or not to apply — for a grant

By Sponsor Insight

by Kate Tewanger, senior consultant, Hedges

Leaders in the nonprofit sector often feel like they are on an endless search to find new grant opportunities to support their work and diversify the funders in their portfolios. When new opportunities become available or the opportunity to approach a new funder presents itself, it can be tempting to make program modifications to align with a funder’s priorities — particularly for ones that offer a significant financial investment in your work.

Nonprofits may consider expanding their geographic focus, changing who they serve, or adjusting how programs are delivered to align with a new funding opportunity. Modifying program delivery in pursuit of a potential revenue stream may seem reasonable. However, if your organization doesn’t have the capacity to make the changes and they aren’t part of your strategic plan or vision, this approach can lead to negative consequences, including the following:

  • Grant rejection: Rejected grants are always disappointing. Submitting a grant proposal can be extremely time-consuming when you factor in the time it takes to create partnerships, develop strategies and tools to measure impact, and collect input from the community and stakeholders when making program modifications. Stretching the organization’s capacity to align with a grant opportunity can take time away from cultivating and pursuing opportunities that are better aligned with your mission
  • Mission drift and poor outcomes: Redesigning or modifying a program to align with a funding opportunity can slowly drive the organization away from its mission. Potential modifications also can impact program outcomes. For example, a program designed to engage middle school students may not easily be adapted to meet the unique needs of high school students and will likely result in undesirable outcomes.
  • Damaged relationships: Adapting your program to fit into a new funder’s priorities may damage your relationship with long-term funders who have supported the program based on the current design and outcomes. Furthermore, funder priorities often change and shift. Chasing an opportunity that puts your program and outcomes in jeopardy may damage a future relationship with the funder.

Every grant opportunity comes with a cost of time and resources to cultivate relationships and write the proposal. Organizations can write the best proposal, but if the proposed program or project does not align with the funder’s mission and goals, it is unlikely to be successful.

Investing time to carefully assess your organization’s mission and alignment with a potential funding opportunity before you even begin writing a grant can save you time in the long run and ensure that funding opportunities do not drive your work but instead support your strategic vision and priorities. Avoid common pitfalls when assessing a new funding opportunity or approaching a new funder by following these steps.

Step 1: Assess alignment with the funder’s mission and priorities. The first step is to assess your organization’s mission and your proposed program’s alignment with the funder’s mission and priorities. The best place to start your research is on the organization’s website if they have one. Most foundations have websites that clearly state their mission and priorities. Some even have detailed guides for potential applicants that outline specific eligibility to apply, fields of interest (for example, education or human services), a description of the population they intend to impact, and/or geographic restrictions. Through this information, you can begin to evaluate whether your organization’s mission and proposed program have shared goals and objectives.

Other funders may issue a formal Request for Proposal (RFP). This is particularly common for government funding or government funding that is passed through to another entity to administer. In this case, the RFP will likely include specific goals, objectives, and eligibility requirements, and will likely outline eligible and non-eligible activities. Carefully reading the RFP will likely provide the information you need to know whether your organization or proposed program is a good fit for the funding opportunity.

Step 2: Grantmaking history. The next step is to research the funder’s grantmaking history. This information is likely published on the funder’s website or in an annual report. If it isn’t, the information can also be found on the organization’s 990 Form filed with the Internal Revenue Service. Learning about the organizations that have received grants in the past will provide another layer of information as you assess your organization’s alignment. You may observe patterns that are helpful in learning more about the funder’s interests or priorities. For example, you may observe that the funder has only made grants to youth-serving organizations or organizations located in a specific neighborhood. In some cases, the foundation or funder may not have information that easily accessible. If that is the case, reviewing the funder’s historical grantmaking data can be particularly helpful if the funder does not have a website or its priorities are not published.

Step 3: Establish a relationship. The single greatest source of information is often the program officer or other key staff within the foundation. Staff at the foundation or organization providing funding can unlock information about the organization’s key funding priorities and strategies. Scheduling a meeting with key staff at the foundation can provide an opportunity for you to seek direct guidance and advice on their priorities and whether your organization or program align with their interests. Although this step can seem intimidating, it is an important step because: 1) the organization’s priorities are likely to evolve alongside the changing needs in the community; and 2) staff often have valuable insight and information that is not available on the website. Building a relationship with the funder can help you avoid spinning your wheels on a proposal that doesn’t align with the funder’s goals. Conversely, it can strengthen your approach and increase the likelihood that you are successful if you are encouraged to submit a proposal.

To develop a relationship with staff at the foundation, identify a primary contact. This information may be found on the website, listed in an RFP, or by contacting the foundation directly to request the name and contact information of the person best qualified to answer your questions. Another approach is to leverage your board, staff, or program partners who may have a relationship with the foundation’s key staff members and can make an introduction. Before meeting with staff, make sure you have done your homework in steps one and two and have specific questions to learn more about the organization’s grantmaking goals and priorities. This also is an opportunity for you to share information about your organization and programs. Through this conversation, you will learn whether your proposed program aligns with the funder’s priorities. And, just because your program doesn’t align now, it doesn’t mean it won’t in the future.

A thoughtful approach to assessing each funding opportunity or potential funder can save your organization time and ensure that you are pursuing an opportunity that will contribute to achieving its mission and goals.

Kate Tewanger is a senior consultant at Hedges, where she partners with nonprofit organizations to identify and pursue mission-aligned grant funding that expands their capacity and increases their impact.