Behind the Foundation Curtain Part 2 cover image

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1 Lesson / 27 Minutes / FREE

In Part 2 this exclusive four part Nonprofit.Courses interview, Lorrie Hartley, Executive Director of the TKD Foundation, a family foundation in Missouri, gives interesting and helpful insights on her interactions with foundation applicants.


Here’s a Transcript of our Conversation

Behind the Foundation Curtain Part 2

Matt Hugg: Hi, this is Matt Hugg with Nonprofit.Courses, and I’m pleased to bring you part two of a four-part series with Lorrie Hartley of the TK D foundation. TKD is a closed application foundation based in Missouri, and it’s a Family Foundation. And the purpose of the video is to talk about what funding is like from the funders point of view. And in particular, this video this number two of four in the series is focusing on the process and mechanics of a grant application. Of course, since they are a closed funder, and because they are very local and have very specific interest, this is not an invitation to make application to them, but just to get some insight on, like I said, what it’s like from the funder’s point of view. So with that in mind, check out the video and enjoy.

[Music]

We are back with Lorrie Hartley of the TKD Foundation in Missouri, and we’re talking now about proposals and what the process is and some of the mechanics of it and all that, and I think that this will really be helpful. The first question I have for you is, is it about process or is it about judgment when you fund somebody or look at proposal?

Lorrie Hartley: For us, it’s process. We’re very process-driven.

Matt Hugg: Okay.

Lorrie Hartley: And there’s certain judgments that you have to make based on what people present, but I would say we are process data-driven to make decisions.

Matt Hugg: Okay, you come from fundraising background so you have a sense of this, right, that people respond to stories really well, that, you know, if you can show an example of how somebody moved from point A to point Z and did whatever they did and accomplish something with a story, that’s really positive, especially in like a major gift kind of relationship. Where does that sit in working with foundations or an organization like yours?

Lorrie Hartley: So I believe when you’re putting a proposal together, you need to try to speak to every different type of audience you could have looking at your proposal. So the story is very important. And that speaks to the people that are your feelers. And then it’s important to have your financials, because then you get into your data, and then you need your goals and objectives. But really, that story, you could mold your whole proposal around the story and add the data, the facts and figures and how that’s going to make a difference.

Matt Hugg: And I guess to be, yes, to be an example of you know, here’s one data point out of that whole field of data that you’re looking at, and here’s how it carried forward.

Lorrie Hartley: Absolutely.

Matt Hugg: Okay, that’s great. How many people are on your board?

Lorrie Hartley: There are three people on our board, and that are the founders and myself.

Matt Hugg: Oh, okay. Do you ever disagree about what should be funded?

Lorrie Hartley: I believe that we did a very good job vetting out when we did the mission and vision. And we did the gap analysis from where Ted was at, where Kim was at, and bringing that together. So we don’t really disagree, because we’ve already vetted out the organization’s before we’ve ever asked them.

Matt Hugg: Okay.

Lorrie Hartley: Yeah, so I think that works already been done, and we have good communication. Can there be disagreements?  Sure, but it is a conversation and it’s never a confrontation.

Matt Hugg: What if, you know, an old loss best buddy comes up and grabs Ted by the arm and says, “Hey, I got this really cool project, I’d like you to be a part of.” How’s that work?

Lorrie Hartley: We have lots of best buddies. [Laughs] We do. It works. We just had a lady that works for and nursing home and Ted and Kim previously had made donations there. And so she is–

Matt Hugg: Before the foundation?

Lorrie Hartley: Before the foundation, through their private philanthropy, they made a gift. But she had sent me just through our information email box, asking for money, and I gave the standard reply, “Thank you for applying, but all our funds have been allocated.” And then she waited like two weeks and then she just emailed Ted, and what happened there, that was just forwarded back to me. And at that time, she got the same reply that she got the first time, “Thank you for applying, but all our funds have been allocated. In the future, this is the process you will go through if you’re interested in receiving funds.”

Matt Hugg: So, in the previous video, we talked about black eyes, is that a black eye?

Lorrie Hartley: No, if it’s a black eye, it’s just a disrespect.

Matt Hugg: Okay. All right.

Lorrie Hartley: Because we didn’t set ourselves there, and we’re honoring the founders. We’re there because they’ve asked us to be the gatekeepers. And every process, every procedure, everything that we do has been approved by them, so that’s important to remember. So when you are dishonouring, the process, you’re dishonouring them.

Matt Hugg: I know a local community foundation here. The executive director told me that if any—now they have a board, a bigger board, it’s a community. But if somebody goes to a board member and says, “Hey, you know, can you do this?” Boom, there, that board member is out of any decision making, anything they don’t even—they’re not in the room that, you know, they’re now toxic when it comes to anything about that application coming through.

Lorrie Hartley: Well, that gets into that conflict of interest.

Matt Hugg: Yeah.

Lorrie Hartley: And then you’re not going to…And it puts that person, the board member in a very difficult spot, and you never want to do that.

Matt Hugg:  Yeah, no, that’s right. And getting back to your point about respect for people and having –that there is a process and you want to go through this and make sure that it’s, you know, you’re doing it the right way. Can you talk about –because it’s happened so many times, I’m sure you’ve heard it too, that somebody say, “Well, you have to give out money.” And so they’re, like, “You know, it doesn’t matter whatever they might say, they have to give out money, so I’m going to apply because, you know, it’s like, that’s what they do. They have to do this.”

Lorrie Hartley: It’s true, foundations have to give out money, they have to give out 5% annually of what’s given. However, they can also decide to give out more than 5% in one year, say, they give out 20%, the IRS allows them to carry that over for five years.

Matt Hugg: Oh, okay.

Lorrie Hartley: And they don’t have to give to your nonprofit, they get to choose where they make their philanthropic gifts.

Matt Hugg: Right.

Lorrie Hartley:  And if you don’t have that relationship, which is very important, that’s not the best way to start to receive funding.

Matt Hugg: Exactly, right. And they should know, I didn’t coach you.

Lorrie Hartley: It must have been a good answer.

Matt Hugg:  Yeah, really is. I mean, that’s exactly what I would have…It’s the same thing, you know, like, yeah, they have to give out money, but there’s a, you know, I’m of an age, I remember the Exxon Valdez spill in Alaska and how folks would all sorts of people would be hitting them for money. It’s like, “Well, they have to give out money and they need to make up the reputational.” Yeah, but they still have their thing they need to, you know, they have already decided to do.

Lorrie Hartley: I like what you said, “they’ve already decided to do.” So our funds for 2020 to 2021 in the summer have been allocated. We’re already looking at the next funding year. And another thing about the funding, we have multiple funders who have multiyear grants. So we already know where that funding is going to go.

Matt Hugg: Recipients who have multiyear grants?

Lorrie Hartley: Yes.

Matt Hugg: Right. So take that into consideration. And just like I love what you said, “telling a organization what they need to do,” that would be like us, assuming that we knew what a nonprofit that was applying for funding needed to do.

Matt Hugg: Oh, that’s interesting point, because so many times people, at least I’ve heard, you know, whether a foundation person like yourself…And I have to say, you’re better educated because I think you’re rounded. You have a good grounding of your education that’s having been on both sides. Right. But I think there’s an intimidation factor that folks—and you realize this, right— that people say, “Oh, well, but the funder says we need to do this.” But it doesn’t sound like, you know, that’s not necessarily what you’re saying, is it?

Lorrie Hartley: No, so we’re very flexible. We’re very much, and we’re not…It’s different being a private family foundation versus a federal grant.

Matt Hugg: Oh, yes. Right.

Lorrie Hartley:  I mean, we have so much more flexibility. There’s a lot of leeway that we have, and we know we are mindful that we are not the experts of your organization ever, nor do we want to be or we don’t put stipulations in place to try to tell you how to run your program. We’re looking to move the needle. We’re looking to make a difference. We’re looking to be an extension of you. We want to be your partner.

Matt Hugg: Right. Well, we’ve had a conversation, I think at one point about, you know, they’re your arms and legs.

Lorrie Hartley: That is correct.

Matt Hugg: Yeah. Right.

Lorrie Hartley: Very much so.

Matt Hugg: So, how many proposals do you see every month?

Lorrie Hartley: We see quite a few just in our information box, but since we are a closed application process, we keep things pretty close to the vest.

Matt Hugg: Okay.

Lorrie Hartley: Yeah, we’re not out there soliciting, we don’t have RFPs. Just being open RFP. That’s not who we are. That’s not who the founders want to be.

Matt Hugg: But, obviously, more than you would normally handle for anything? I mean, obviously, you can fund, but also just more than you want.

Lorrie Hartley: Sure. There’s a lot they come in. And I think what…Because we read them all.

Matt Hugg: Oh, okay. Oh, that’s fascinating. All right.

Lorrie Hartley: We read them all. And actually, we save all of them.

Matt Hugg: Hmm.

Lorrie Hartley: And it gives us a good pulse of what’s going on. And again, if there could be something that I—for me personally, because my personal mission is to help nonprofits succeed—if I know somebody that could help somebody, I would just pass that on to somebody and say, “Take it for what it’s worth. I haven’t vetted out the organization. I just received this and it’s outside our wheelhouse. It’s outside our mission. “

Matt Hugg: So if you could fund like, all the ones in your mission, what proportion are you getting that are focused in your mission versus ones they’re just not with you, not where you want to be, whether you had the money or not.

Lorrie Hartley: I would say 20%.

Matt Hugg: Are just not, or they’re not on target?

Lorrie Hartley: They’re not on target.

Matt Hugg: Okay.

Lorrie Hartley: They’re not on target. And what’s great is when you know that they’ve just taken an organization’s name off one proposal and then slapped yours on there, and then failed to—

Matt Hugg: They do that?

Lorrie Hartley: Yeah, and then failed to read it. There’s always a slip within there that it will mention the other organization or mentioned the wrong town or community.

Matt Hugg: They didn’t use that global search and replace very well, did they?

Lorrie Hartley: They did not.

Matt Hugg: All right, and that must get pretty frustrating on your part. I mean, I imagine you get down so far.

Lorrie Hartley: It’s just disrespectful. And you’re wasting my time. I took the time to read your proposal and you disrespected that. You really wanted funding, maybe there’s a shot? Well, there’s not anymore.

Matt Hugg: Right. Right. So now, you maintain some sort of grant management system, I imagine, right?

Lorrie Hartley: Yeah. So we use WizeHive Database and that works for—that’s where all our LLIs come through, the grants, the reporting, how we disperse funds, that ties in with QuickBooks, email, all the communications are held within WizeHize.

Matt Hugg: And just so people know, that is— just like there’s different fundraising software like Blackbaud, Little Green Light, Donor Perfect, there is a whole genre of grant management software, as well.

Lorrie Hartley: Absolutely. We went through months of vetting out the right system to use.

Matt Hugg:  Okay. And I imagine that also enables direct applications through a website or something or kind of, you know?

Lorrie Hartley: Absolutely. So, everything’s cloud based, so they get a link, and it allows them to apply. But it since we’re closed, that’s just not out there for anybody. You have to be invited.

Matt Hugg: Yep. Yeah, that makes sense. But then that comes down where I’m hitting with this is that, you know, a box only if it says 250 characters, you’re not giving them 300 characters, you’re locked in there, they’ve got to do within that amount.

Lorrie Hartley: They do. Now my recommendation for people filling out that is to write and type and read what they’ve written in Word. And then copy and paste that in there. Because there are so many mistakes that we see.

Matt Hugg: Right, right. And imagine that the boxes don’t…. I mean, maybe there’s a little bit of text editing capability, but it’s not like a full blown—

Lorrie Hartley: It is not.

Matt Hugg: Yeah. So it’s going to catch more things that way.

Lorrie Hartley: That’s correct. And read, read, read your applications, because we do and we read them out loud and we read them together…Everyone.

Matt Hugg: Wow, wow, yeah, I have a couple horror stories back in the day when application we did went through my hands, my boss, the president, got to the dean, he found three mistakes – really?

Lorrie Hartley: It’s so important, and get our name right.

Matt Hugg: Oh, what a concept?

Lorrie Hartley: Yeah, because we’re reading it out loud, with the founders present hearing their name said wrong and spelt wrong.

Matt Hugg: Well, but spelling…I mean, it’s almost like a resume, you know, spelling counts, you want to make sure that you got everything right.

Lorrie Hartley: You do want to have everything right. Now, if there’s a typo, like there was—instead of strep kits, they said strip kits. I knew what they meant.

Matt Hugg: Okay.

Lorrie Hartley: So that’s normal. That’s okay. But really, the organization’s name? Get it right.

Matt Hugg: Yeah, that’s true. That’s true. Well, I try to tell folks, you know, you don’t have to write a sonnet, right? It’s not Shakespeare.

Lorrie Hartley: Right. Less is more, less is more. Be precise, to the point.

Matt Hugg: Yep. Yeah. And it has to be a language that you can understand. What areas of interest do you have, is your organization about?

Lorrie Hartley:  So we do community health care education and nonprofit startups.

Matt Hugg: Okay, great. Wow, that last one is huge.

Lorrie Hartley: Yeah.

Matt Hugg: Yeah. Within your community bounds, just so everybody knows.

Lorrie Hartley: Yes, the funds have been allocated.

Matt Hugg: Good. There you go. Yeah. But do you consider yourself a health care expert, or are your benefactors healthcare experts?

Lorrie Hartley: I consider myself as a nonprofit expert.

Matt Hugg: Okay.

Lorrie Hartley:  But not an expert in anybody else’s nonprofit.

Matt Hugg:  So if somebody… so we’re I’m going with this is jargon and being able to make it… so you’re an intelligent lay person reading this, not an oncologist reading this.

Lorrie Hartley:  Absolutely not. The buzzwords, take those out. Anything that doesn’t…Any acronyms. make sure that you spell those out at least once so we know what that is. Because treat us like we don’t know what’s going on in your organization, because we really don’t and we don’t pretend like we do. We’re looking for the story. We’re looking for proposal, we’re looking for the impact, how is this going to move the needle? What does that look like? Goals, objectives?

Matt Hugg: Right, but to help you understand what they’re doing, not necessarily to wow them with their language and their… I mean, I tell folks, you know, there’s well intended, right. And I know it’s…My impression at least, is that you want to look at people who have expertise who are more than well intended, but they need to be able to talk to you in a way that you can understand.

Lorrie Hartley: Yeah, talk to me like you would anybody else if you’re trying to sell your services to them, or trying to talk to a client. That’s what we are. Just keep it simple. And one of my favorite things is we had a grant application come in and there were 10 words that I did not know what they meant, because I wrote them down because I needed to know on my own curiosity. And like, that was just overkill. And again, we’re reading them out loud. I’m the reader always, and then trying to pronounce these words, thank you for that.

Matt Hugg: Have you ever thought about putting a little videotape on you while you’re doing that?

Lorrie Hartley: I should, I’m sure everybody at the organization would just get a kick out of that.

Matt Hugg: Yeah, you know, I mean, we listen, we’ll talk about Nonprofit.Courses, we’ll put on a humor page.

Lorrie Hartley: Okay. I got stories.

Matt Hugg: I talked to people about looking at the process from the funders point of view. Is this something that, you know, I mean, you obviously, you have a boss, right?

Lorrie Hartley: Yes.

Matt Hugg: Now, your decision-making process is pretty tight. But if you come in and recommend something that becomes a failure, or you recommend five things that become failure, is that reflecting on you?

Lorrie Hartley: Well, sure it is. I mean, we’re making recommendations and there’s a responsibility on my part and the trust on, I report to the president, Kim’s part that I’ve done due diligence. And I’ve done everything to make sure it’s a good decision. You can’t control everything. And certainly, things happen.

Matt Hugg: Right.

Lorrie Hartley: But it needs to be. It needs to be a good balance there.

Matt Hugg: Okay. Right. So what else should a funder consider when they’re considering your point of view when looking at their application?

Lorrie Hartley: Making sure that you share your financials, your budget, and not just the budget for the project, the budget for your organization, that’s important, and how that fits in. Budget’, very important. And if there’s any line items that need to be explained, explain that because I’m looking at that.

Matt Hugg: So will you ever funded organization that had an operating loss?

Lorrie Hartley: If it could be explained, okay. I mean, there’s things that happen. Absolutely, there’s sometimes the ends are can be rough years. And then a lot of times—

Matt Hugg: Like the one now.

Lorrie Hartley: We are getting one. A lot of times, an organization finished a capital campaign the prior year, so of course their funds are going to be down.

Matt Hugg: Sure.

Lorrie Hartley: And now they’re just doing regular annual events and annual donors; a few major gifts, but that’s a natural reduction in revenue.

Matt Hugg: But how about like, when I say from your…And what you said was important stuff, but when I’m looking at from your point of view, like what’s going to make your job easier when it comes to you working with a funder?

Lorrie Hartley: Clarity, transparency, honesty, and apprise, don’t surprise.

Matt Hugg: No limits.

Lorrie Hartley: Exactly. Be clear of what you want to do with those funding dollars and follow directions. And always have a conversation. Since we’re a closed application process, you’ve already been vetted out, we’ve already met with you. We’ve already made a decision to invite you to apply. There should be that relationships there. So make sure to utilize that.

Matt Hugg:  Okay. Yeah. And I love that you mean being transparent and being…so that they’re…so that’s making your life easier so that you can judge whether they’re the appropriate organization to fund.

Lorrie Hartley: Absolutely.

Matt Hugg: That makes a big difference. Do you prefer proven solutions or novel ideas?

Lorrie Hartley:  Oh, we like both, because we do both, because we do nonprofit startups, and we funded a startup program, and last year and this year, so it was a novel idea, but it was also a backed by a business plan, solid research and success of another organization that had done the same thing in a different area.

Matt Hugg: Ah, okay, so you’re not necessarily looking. I mean, some foundations, or at least the reputation some foundations have is that well, they want to be the novel idea starter. And if somebody has already done it, they’re not interested because they feel like they want to invent the wheel all the time.

Lorrie Hartley: We don’t want to invent the wheel, but we’re not against putting a smoke on there.

Matt Hugg:  Okay.

Lorrie Hartley: Because one of the founders, Ted, he’s very innovative. He’s on that side, where Kim would be very much on the process side and supporting what’s there. It’s just, it’s a good mix. It’s a good balance.

Matt Hugg: Now would you come back to a funder, to a grantee and say, “This is good, but you need to change x, y or z.”

Lorrie Hartley: Absolutely. We have done that, in particular with one of our funders. It was for an arts organization that they offered how to become an actor, it was local community. And it said in there—and mind you, we’re funding our community efforts. And it said that they were requesting funding in a nutshell, because community members were just so unintelligent that they didn’t understand what arts could do. Okay, you’re talking about us. You’re telling us that we’re stupid. And you know, by the grace of God, if you get this funding, then we’re going to be all better for it and then we’ll all be smart. I sent that back. And that’s one of our funnies; it’s a funny moment when we’re reading it. I sent it back and said, “Can you correct this and make it sound like you’re doing this for the betterment of the community, and just take out the parts that were unintelligent.” And basically, that were rednecks. He did everything except say that the community is rednecks. And he was a grant writer, not working for the organization, but working on this proposal.

Matt Hugg: Wow. From a more populous portion of the state, no doubt.

Lorrie Hartley: Yes. And more educated portion of the state.

Matt Hugg: Well, education, does it imply stupidity or no?

Lorrie Hartley: No.

Matt Hugg: Wow. Okay, well, with that, maybe we’ll just wrap up this section. Got a good laugh out of this. And we’ll move on to encourage everybody to see the first video in our series and we’re going to…And this is number two, number three is going to come up. We’re going to be talking about, let’s see, number three, things like relationships, so stay tuned.