About Me 0126: personal finance manager

Angel investors and venture capitalists don’t invest in non-profits. The simple reason is that it’s impossible to make money for investors when the goal of the company is to not make money. Yet I still get this question on a regular basis, so I’ll try to outline the considerations in common-sense terms.

A non-profit organization is generally defined as an organization that does not distribute its surplus funds to owners or shareholders, but instead uses them to help pursue its goals. Examples include charitable organizations, trade unions, and public arts organizations. In the US, a non-profit is technically any company who qualifies as tax exempt through IRS Section 501(c).

Obviously, these companies still need money to get started, or finance growth, just like a for-profit company. What options do they have available to them, since they can’t sell a share of the company (no equity investment)?

Individual and institutional donations. For a non-profit, bootstrapping is self-funding from donations and fund-raising. The advantage is no time and effort is spent searching and preparing for the other alternatives, and no repayment terms or collateral are required. There is no discussion of equity, or return on investment.
Loans from a bank or other financial institution. Non-profits can apply for a bank loan or line-of-credit, just like any other individual or company. However, like anyone else, they will first need some collateral, or someone to guarantee the loan, and some evidence of a viable business, like receivables and inventory.
Personal loans from individuals, employees and board members. Personal loans are certainly an option, but should be avoided if possible. As in any company, they can lead to employee problems, or messy legal issues. A non-profit can also issue bonds to board members and members as a way of borrowing funds from those same people.
Government grants. The grant source often gets overlooked, but it should be a major focus these days when relevant due to the Obama administration initiatives on alternative energy and healthcare. The down side here is that real work is required to put in a winning application, and the award may be a long time in coming.
Private endowments. This is a funding source for non-profits that is made up of gifts and bequests subject to a requirement that the principal be maintained intact and invested to create a source of income for an organization. Endowments are usually limited to a specific area of interest by a philanthropist, and have many qualifications, so be careful.
Bartering services. Bartering occurs when you exchange goods or services without exchanging money. An example would be getting free office space by agreeing to be the property manager for the owner. This could work to get you legal or accounting services, but won’t get you cash to pay employee salaries.

Hopefully you can see from this list that the people and processes involved in financing a non-profit have little in common with angel investors, or the venture capital process. You still start the process with a business plan, but then you look for a philanthropist rather than an investor.

Some non-profit entrepreneurs think they can skip the whole plan, rather than just the sections on valuation, equity offered, and exit strategy. All other sections, starting with a definition of the problem and the solution, opportunity sizing, business model, competition, executive team, and financial projections, are just as critical for non-profits as for-profits.

A non-profit is still a business, maybe even tougher than for-profit to run successfully, so the best angel is a great entrepreneur at the helm for fund-raising, as well as operations. In addition, the best non-profits turn out to be the angel, rather than require one. That’s a higher calling.

Marty Zwilling

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Obama will be just as important as M.L.K. to the Black/ minority community when by the end of his presidency. Ever since 9/11 when the planes hit the towers & it was all over the local news stations as well as the cable news shows everything started kinda falling into place as far as politics. I started watching Bill O’reilly, Hannity & Colmes, Hardball w/ Chris Matthews, Countdown w/ Keith Olbermann & recently Glenn Beck & Rachel Maddow. When Barack Obama came on to the scene with his DNC speech I was impressed, but I don’t neccessarily remember thinking alot of it other than that. There might have been a couple of commentators that speculated his run, but i’m really just assuming that. I don’t specifically remember anyone saying that this guy could be president. So I just forgot about it basically. Then he just popped up in 2008, I guess, & started running. Of course I remembered him from the speech, but it was still a surprise as I didn’t know anything of him other than the DNC speech. But as the process went on I became increasingly impressed by Barack Obama & his family. I thought his background was great. Head of The Harvard Lawyer Association. Hey, the guy is black so you can’t beat that. In a white dominated society that is a great academic accomplishment, not just an entertaining one. I was also impressed by his humane & compassionate traits as far as choosing to stay in Chicago & be a community organizer to help less fortunate people instead of easily accepting high paying attorney jobs at giant powerful firms on Wallstreet. Also, he has a great sense of family structure even though his own background was not as successful. That tells me that he is educated & adapted above his environment instead of being consumed by it. & many black homes need to see that above all else. For me, Barack Obama has made the world & its needs come into focus as opposed to just myself & my own. Being raised in indonesia with family ties, for me, makes him more worldy wise compassionate & aware. Coming from an oppressed people living in an oppressed nation, but rising to the top as the leader gives him much respect & consideration all over the world. I think he is the guy to bring this whole world together more than it has ever been because of his entire spread out & well rounded background. Here’s a black democratic president, one letter away from having the same name as the most wanted terrorist ever, the same name as Sadam (the middleeast president that Bush killed), with the blackest father & whitest mother, irish blood & Dick Cheney as a cousin for god’s sake. There has to be some fate to all that. If not fate, than opportunity is a great word. For me, if this isn’t the guy to bring it all together, or at least the most positive change the world has needed, than there is no other! I ask you to give him more time. The world wasn’t screwed up in one day, neither will it be fixed in one. But I believe we will have the most & quickest gains through Barack Obama. We’re all glad that President Obama got Osama Bin Laden! But people still need help all over the world. Earthquakes, Tsunamis & tornadoes have devastated many places around the world including Japan, Haiti & Missouri. Libya, Syria & Yemen is in chaos & disorder with people getting killed for protesting against decades of tyranny & inhumane living conditions like the recent killing of Hamza Al-Khatib, a 13yr. Syrian boy. We all know the power of music & how 1 song can help change the world. So as well as DJ’s & radio stations playing it, I’m telling people all over the world that if you want Obama’s change & America’s freedom post a video on YouTube of yourselves (like the Baldwin Village, Los Angeles, CA kids http://youtu.be/DnhRo8cmMlQ) singing a chorus of ‘Obama For The World’ (the world’s theme song for Obama).

ITunes: http://itunes.apple.com/us/album/obama-for-the-world/id382415281?uo=4

50% of sales go to world disaster reliefs & the Obama 2012 campaign!

Donations: http://www.tunecore.com/music/david-king

Myspace: http://www.myspace.com/david.king

Twitter: http://www.twitter.com/david__king

online reputation management

About Me 0126

Wednesday, August 3, 2011

personal finance manager

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