board-blog
22
Apr

DFW Implements Best Practices in Program Funding

2015 was a big year for Dining for Women! Significant changes took place that have strengthened the vision, management, and operations of our organization. In her first full year at the helm, our Executive Director, Beth Ellen Holimon, realigned the duties and reporting structure of staff, led the Board of Directors through an extensive visioning process, and successfully created and executed DFW’s first, formalized fund development plan.


 

During that same period of time, the Board strengthened its focus on governance, as opposed to hands-on management. The changes made in 2015 ensure that DFW has an effective Board, a focused vision, and top-notch staff. These are pieces that are necessary for DFW to grow and flourish in the years to come and, most importantly, to help even more women and girls!

 

As part of our work to become a professional, high-impact nonprofit, we engaged the services of A. T. Locke, a respected financial management company, to assess, refine, and manage our financial reporting. We have always followed industry best practices in reporting our finances and, in fact, we go beyond standard practice in a number of ways. For example, we hire an independent, third-party CPA to conduct an annual audit of our finances – not all nonprofits do an annual audit. Our IRS Form 990, which is like an annual tax return (though DFW does not pay taxes), is also prepared by our auditors. Not all nonprofits use a third-party to prepare their 990. We have done this because we are committed to financial accountability and transparency to you, our members, and to the public. Both our annual audit and 990 are made available every year on our website for anyone to review.

 

While we have always followed industry best practices in reporting our finances, DFW’s way of managing our program funding has been uncommon, compared to the rest of the nonprofit industry. We have known this for some time, and A.T. Locke confirmed this early on in our discussions.

 

What does this mean? As you know, DFW has been operating with an 85/15 model: 85% of monthly chapter donations have been designated for DFW grants while only 15% went to DFW’s expenses as an organization. This way of restricting donations is not how most nonprofits operate and is not considered best practice for ensuring the long-term sustainability of a nonprofit. It has also had some negative consequences for our organization.

 

As we attracted new chapters and members in recent years, our monthly program donations have soared. At the same time, we have been starving for the resources we need to run a professional, high-impact organization because the majority of our donations are restricted and could only be used for grants.

 

DFW is not the only nonprofit to experience what has been called The Nonprofit Starvation Cycle — a vicious cycle that is “leaving nonprofits so hungry for decent infrastructure that they can barely function as organizations—let alone serve their beneficiaries.”[1]

 

DFW has restricted its donations so much that we are hampering our ability to grow, adapt, innovate, and effectively fulfill our mission.

 

Fulfilling our mission – to ensure gender equity and improve the lives of women and girls in the developing world – requires more than just awarding grants. While our grants will continue to be our primary focus, we must address the significant challenges facing women and girls around the world from all angles. This means educating and engaging our members to become global citizens; recruiting and supporting new chapters and members on an ongoing basis; advocating on behalf of women and girls through collective, grassroots advocacy; and proactively investing in partnerships that create broad, lasting change.

 

As Beth Ellen discussed in The Dish last year (“DFW’s Four Programs Add Up to Big Impact”), DFW is much more than just a pass-through for donations. We have four distinct programs: we have always had a Grants Program and a Member Education and Engagement Program; as part of our 2020 Vision, we are now launching an Advocacy Program and a Partnership Program.

 

All of these programs are vitally important to fulfilling DFW’s mission, but the 85/15 program funding model has been starving our ability to grow all our programs. We are also negatively impacting the future sustainability of our organization because we cannot invest in a strong infrastructure.

 

So what exactly is changing? DFW does have a unique and highly successful model, and this will not change. Our monthly featured grant will continue to be the core of our model, as will the small, intimate nature of our chapters. These are the unique aspects of DFW that have made us successful. As we maintain the intimate, unique chapter format and grassroots funding that we all love, we need to ensure the organizational vibrancy of DFW.

 

To do so, your monthly chapter donations will now be used to further DFW’s mission, including all four of its programs: Grants, Member Education and Engagement, Grassroots Advocacy, and Partnerships. All donations will fund both direct program costs (such as our grants) as well as program support (the costs to implement and manage our four programs) and administrative expenses. This is exactly how other nonprofits in the U.S. use their donations.

 

While DFW takes these steps, our accountability and transparency to you, our donors, will continue to be paramount. Board and staff will closely monitor all our expenses in order to ensure that we are using your donations to make the biggest impact possible, in the most cost-effective way. And, we will continue to report and share our expenses with you by making our annual audit, Form 990 and Annual Report available to everyone.

 

The Nonprofit Starvation Cycle is a proven concept that many nonprofits experience, and DFW has been no exception. Sadly, there are many nonprofits that have ultimately failed because of this starvation cycle. Your Board and staff are committed to ensuring that this does NOT happen to DFW! That is why we are implementing steps that will ensure our long-term sustainability and allow us to make an even greater impact on the lives of women and girls. We want DFW to be here for the long haul!

 

We know that this is a complex subject and you may have many questions. Please review the FAQs we have prepared for your use. We are also preparing a video that can be shown at your chapter meetings.

 

Your Board and staff are optimistic about the future of DFW and very excited about our plans for growth. We look forward to having your support as we move forward this year and beyond.

 

Your DFW Board of Directors,

Barb Collins                                            Susan Garrity                                       Colleen Murphy

Susan Negrin                                         Cynthia Radford                                   Susan Stall

Barbara Wagner                                    Marsha Wallace                                    Sandy Ward

 

Watch Video

FAQs

Glossary of Terms

Beth Ellen’s Blog on DFW’s 4 Programs

 

 

[1]The Nonprofit Starvation Cycle by Ann Goggins Gregory & Don Howard, Standford Social Innovation Review, Fall 2009.