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    7 Replies Latest reply on Mar 19, 2010 4:52 PM by bpfinance

    Non profit investor advice

    kakell Newbie
      Hello I am new to this site. I've read some interesting threads on here and also recognizes solid advice and response to threads. I am an ED of a nonprofit service agency. The services we offer are located in a specific high needs neighborhood in Davenport, Iowa. We have modeled some of our programming on Harlem Children's Zone, on experience related to working in our community for nearly 20 years and trips to Uganda, Africa. Noticing certain similar factors in various impoverished communities sparked the formation of the Family Enrichment Center (FEC). We have formed a business plan, logic models for programming and our Board of Directors have been meeting for over a year. I am looking for several investors to provide funding for a community center building in the neighborhood as there are no facilities within the neighborhood. There are approximately 1600 residents within this neighborhood.
      My question is about finding and appealing to potential investors. I have very little experience pursuing investors at this level. Any help/input is appreciated.
        • Re: Non profit investor advice
          LUCKIEST Guide
          Non profit investor advice

          Kevin, I am the Treasurer of a Independent Living Center in N Y.

          Start by developing a Business and Marketing Plan. Let me know if I can help.

          Good luck, LUCKIEST
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          1 of 1 people found this helpful
            • Re: Non profit investor advice
              kakell Newbie
              Luckiest,
              Thanks for the input. I worked with the local SCORE to develop a business plan and marketing strategy. Looking for direction in finding investors to approach with the plan. I feel very confident this model will make an impact in the community in regard to eradicating poverty.
                • Re: Non profit investor advice
                  bpfinance Adventurer
                  Kakell, the problem is that a non-profit organization cannot have investors. Investors will put money in in exchange for a portion of the company, but due to the way the non profit is set up, there can not be shareholders. Your best bet for funding will be from grants or other individuals that feel strongly for your cause. Some non-profit startups are also able to secure funding from foundations, but that can be more difficult.

                  Have you looked into getting 501(c)(3) designation from the IRS? That would make it a lot easier to secure funding from individuals as their contributions would be tax deductible.

                  If you need any assistance in setting this up or assistance in finding donors, feel free to contact me.
                  1 of 1 people found this helpful
                    • Re: Non profit investor advice
                      kakell Newbie
                      bp thanks. We received our 501c3 in April '09. I understand what you are saying regarding investment, and offering no return (monetary) for investors. I've been looking into grants and we have received a few. The typical rule of thumb from what I understand is most organizations receive 25% of grants applied for. That has rang true with us as well. Since we live in the Midwest, and not in a major metropolitan area and we are new within the last year, it seems more difficult to receive national grants. Most people don't think of poverty when they hear Iowa. However, there are places that are just as impoverished as large cities. Unfortunately with Obama's attention to Promise Neighborhoods the mid-sized areas will get overlooked. Our Mayor has petitioned for funds for this and other causes to no avail. At any rate, in my view this is an excellent investment, although there is no financial return in the immediate future imagine the financial impact if 200-300 children grow up and become contributors to our tax system. From there the numbers will only increase and the program replicates. It is a great investment and the proof for right now is in the impact that Harlem Children's Zone is having doing a similar strategy. Thanks for all the input!
                        • Re: Non profit investor advice
                          Vince Adventurer
                          Don't forget the mark your question as answered and provide credit to those who best helped you.

                          Vince
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                          • Re: Non profit investor advice
                            bpfinance Adventurer
                            Often times the best way to obtain funding is by talking to other non-profits in the area. They are usually very happy to share advice with you to help you get everything set up. Additionally, since they are in your region, they would know the right people for you to talk to in order to obtain donations from individuals and companies. Generally, there are companies in an area that are known for donating to certain causes. An NGO in your area would likely be able to stear you toward the right companies.

                            More often than not, obtaining funding is about who you know and your network of individuals and companies. That's one of the major reasons that people hire companies and management consulting firms like us to assist them in obtaining funding. However, with an NGO, you are in a unique situation in that you can work your way into the "network" by getting in contact with other established NGOs.

                            Good luck, and if you need any more assistance, feel free to ask.
                    • Re: Non profit investor advice
                      bpfinance Adventurer
                      Technically, you are not looking for investors. Investors are given a share of the company and for that to happen, you need to have profits, which is obviously not the case with your company.

                      For funding, generally, non-profits look for grants or money from individuals who are committed to the cause. Sometimes you can even get foundations to provide you with startup funding. Have you looked into obtaining 501(c)(3) certification from the IRS? This would definitely assist you in obtaining money from individuals.

                      If you need any help with any funding issues, or any other issues, feel free to let me know,
                      Jeremy Barfield
                      Chief Forum Response Correspondent
                      Brien Private Finance LLC