Fundraising Archives

Do you want to raise more money? You need a fundraising plan. [Part 1]

July 14, 2017 by Sara Jane Lowry

white dandelions in field: want to raise more money? Fundraising plan.

A fundraising plan takes your income from wishing to reality. Is this you?

You do the same things you did before and expect different results
Your fundraising is “from afar” without meetings with donors and funders
You’ve been getting by (for years) with only government or foundation funding
A a few major donors are keeping you afloat
You are one or two funding rejections away from disaster
You can’t grow or meet more needs

If this sounds like you, you have lost your way in building a robust and diversified fundraising program. One that’s more than a wish and will sustain you in tough times. One that will help you grow to achieve more mission.

Now is the time to create a fundraising plan. And, you can start today.

A fundraising plan includes not just institutional support. That means it considers the full spectrum of resources available. According to the Reliability-Autonomy Matrix, there are three levels of income reliability:

High reliability: United Way support, rental income, advertising, small-medium sized individual contributions (especially sustaining donors), endowments, memberships.

Medium reliability: Ongoing government contracts, third-party reimbursements, major individual contributions, fees for services, corporate charitable contributions.

Low reliability: Government project grants, foundation grants, corporate sponsorships

I work with many nonprofits that don’t have a plan. The bulk of their funding comes from the Low Reliability level. Small nonprofits scale up using foundation grants and neglect to build other revenue streams.

So, where are you today, and where do you need/want to be?

You and your board should be asking these questions:

What percentage of your ongoing costs are covered by reliable funding sources (as referenced above)?
How many decision makers are in control of revenue sources? In other words, having a greater number of consistent funders increases the likelihood that revenue will continue even if one funder chooses to exit.
What restrictions have donors have placed on their funding? When donors restrict funding to certain programs, organizations are not free to allocate money where they need it most.
How many types of funding do you have?
Do you have a cash reserve (3 months minimum)? How liquid is it or is it reserved for program?

Why is this important?

Piktochart showing 12 elements of nonprofit management with Resource Development (Fundraising) highlighted — Click on image to see it larger

Because when you have a wider base of support, you can absorb funding losses more easily. And when you build a cash reserve, you can weather funding delays.

But how do you get there?

Commit. Commit (money + time) to earn a financial return. In other words, invest in your future.

All nonprofits are in two “businesses”—one related to their program activities and the other related to raising charitable “subsidies” or philanthropy.

You can do this! You already know how to create logic models. And, you already invest in strategic planning and program pilots. So, create your funding model. Invest time and money on your “business side.” That means funding diversification, marketing, and communication.

Also, there’s no one-size-fits-all fundraising plan. Each nonprofit has unique opportunities. But most benefit from development strategies that fit in the three levels of funding reliability listed above. Therefore, grants require a strategy plan. Fee-for-service/earned revenue requires a strategy plan. And individual donors/major gift giving requires a strategy plan.

Fundraising planning includes building systems to address:

Communication – how and how often will you communicate with donors. Do you nvite them to join your cause or celebrate what they’ve made possible with support? What I often see is that it’s not seen as a priority so it’s inconsistent and not intentional. And it focuses on what you did, not what the donor did.
Staffing – is your executive director is the only one focused on fundraising? If so, your focus is most likely on low level funding reliability areas like foundations and corporate sponsorships. Why? Because you are not prioritizing revenue generation. No business can operate this way. Or you have no staff and the board is acting as staff and are not trained in fundraising and their focus is on events.
Record keeping – how will you discover who your best donors are if you keep your donor records in spreadsheets? And if you have a donor system, recordkeeping is spotty so you don’t have the full picture. Do you know how to leverage the information in your database for planning? Or, have you cleaned the database of lapsed donors, or looked at characteristics of your primary donors that help you understand your “donor avatar” to acquire new donors to replace those who have dropped off? Do you have a list of your top 20 donors on your desk?

If this sounds like you, please know you are not alone. And you can change it with an investment of time and money. [Click here to read Part 2 on how to get more focused in donor-based fundraising.]

Grantseeking? Follow these tips to avoid pitfalls that get you rejected

April 10, 2017 by Sara Jane Lowry

Grankseeking seems easy – they have to give the money away, right? If you’re planning on visiting a foundation to ask for funding for your program, your nonprofit, your project, prepare to bypass these grantseeking pitfalls that are checkboxes yes and no easily avoided. Program officers are people who have the unenviable position of rejecting some 50% of the grants that they’ve agreed to accept. Why make it easy for them to reject your proposal? Here are some tips to consider beforehand:

Did you follow the directions on the website for what format to follow?

Or did you decide that section wasn’t that important to answeer. (Hint: if you don’t have an evaluation plan, don’t submit until you’ve worked one out. Consider paying an actual evaluator for a couple of hours to talk through some ideas.) When you are grantseeking, make sure you check the website for how they want to be approached. And don’t send a full proposal if they prefer a letter of intent first.

If you got a grant previously from the funder, did you submit the final report?

I once accompanied an executive director, who was new at an organization, to a foundation who had pr
eviously funded them. She was excoriated by the foundation for not submitting the final report for the previous grant, and trust me, that’s not how you want your visit to go. And don’t make the funder remind you that the interim report is due. You could use it as an opportunity to tell the funder what great things are happening in your project! It’s your legal responsibility: you promised to do certain things in exchange for money.

Your funder is a professional, so you need to be one too.

Funders want to get to know you as a person and a leader. Please be professional. This is not the time to lecture them about not funding you in the last grant cycle. Or complain, whine, or show your anger. You want to turn the program officer into a passionate advocate for your cause. Why? Because they have to present on your behalf to their board. Give them all the information they need to do it. Show you have thought through your methodology and understand your cause better than anyone else.

Create trust

Grankseeking is more than writing the grant. Showing that you’re dedicated, competent, and someone who will get done what you say you will do, will take you far. If you spend the money other than what you say you will spend it on, don’t expect them to trust you the next time around. Of course things change, but communicate with the funder to let them know when major budget items change, don’t just assume it will be okay. Dependability and accountability – they want to know that investing in your nonprofit will pay off in real social impact.

When grantseeking, tell the truth

You might think it’s okay to list 3 other foundations that are interested in supporting your project because you’ve sent letters of intent to them, but it’s not. Guess what – funders talk to each other when they’re considering your proposal. They’ll call and find out that in fact that funder doesn’t know anything about you or the project. Instead, let them know who you’ve identified that expressed interested in your project, who else you are planning to talk to, and who has approved funding. When grantseeking, you might be surprised that the funder might offer to help by making a call themselves founders you’re approaching.

If you are turned down, reach out to find out WHY

Grantseeking Rejection: Why? on yellow post-it Even if you were invited to submit a proposal, and you worked hard to meet the required demands, kept it within budget the funder wanted to see, and submitted all attachments, it was still just an invitation and it could be turned down. Take a deep breath, and call to see if you can find out why. It might be that they had more competition in your area than expected, or wanted to more deeply invest in a competitors proposal. Maybe the competitions proposal was more detailed in terms of methodology. Maybe it was just favortism, because that happens too. If they won’t respond to your request for more information, be sure to visit their website and look at recent grants to see what did get funded.

Grankseeking isn’t easy, and takes a lot of work. Make sure you don’t sabotage your organization with avoidable pitfalls. Be organized. Know your stuff. Follow Directions.

When you mess up relationships with your board, staff and donors

March 22, 2017 by Sara Jane Lowry

The ABC’s of what to do when you mess-up

As an Executive Director, you are bound to mess-up with your board or staff or even a donor at some point. Distractions, tensions, differences of opinion can lead you to moments that you’re not on top of your game.

I’ve been where you are as an executive director, and also I’ve coached leaders who have also struggled to figure out how to make things right again. What I’ve observed is from personal experience, and from other leaders who struggled with this, is that there a few standard steps to keep in mind that will help you begin to repair and restore those relationships:

Acknowledge: Take Responsibility

I think it goes without saying that this is key to ANY relationship snafu in your life, and it certainly goes a long way here. We may be tempted to hope they didn’t notice, or will let it pass, but they will respect you more if you step up and acknowledge how you’ve messed up or not taken action when you should have.

This step is absolutely key to rebuilding trust with your team, and with your donors.

Be Humble and Non-Defensive

Acknowledging your weaknesses, or that you might have hurt someone opens the door to trust. It shows your humanity rather than yo
ur ego. It helps people remember that they too have made mistakes and creates space for empathy. Importantly, it reminds us that we learn by making mistakes, and that we must be open to making mistakes in order to grow. Ultimately, it lets people know that you value them more than keeping your own ego intact.

Change Your Behavior

If you don’t look at how you messed up, you won’t be able to make good on your word to not let it happen again, consistently — that’s where your challenge lies. To do this, you may need to dig deep within yourself to make some necessary changes — to bring a stronger “you” to the relationship, or be more present in the moment, to make changes to your process. Consider the specifics of what happened and what you can do to prevent it in the future. Repeating the same behavior makes it more difficult for others to forgive you.

Don’t Make Excuses: No Ifs, Ands, or Buts in Owning the Mess-Up

While there may be legitimate reasons for why and how you messed up, in this moment we’re focused on getting away from the negative feelings or frustrations related to the mess-up, but it doesn’t let us create the space needed for repairing the relationship, and doing some listening from the other person on how it impacted them.

It doesn’t mean that you won’t have legitimate reasons for how or why it happened. But providing a rational explanation doesn’t fit in the space of emotion sometimes, and people have a hard time hearing it as anything other than an excuse. It’s really hard to sit with the feelings at this point.

Engage Emotionally with Yourself, and with Others

Take time to become aware and process some of your own feelings about the mess-up. You won’t be able to sit with another’s feelings until you do that. You will then be better able to express empathy and not be overwhelmed with your own experience. This step is critical to really building trust. And it’s the tough work that begins to let people move back toward you rather than away.

Forgive Yourself and Ask for Forgiveness

If you can forgive yourself, you will be better able to forgive others when they mess up. And you will show leadership in how your team, and your board members can recover from their own mistakes. Donors can re-engage at a new commitment if you go through the first 4 steps and be drawn into further support. Asking for forgiveness is an invitation to the other person to communicate and process what has happened. This is the beginning of the work to repair the relationship. And it’s a kind of contract to do better next time, and be accountable to the person to not mess up again.

Asking for forgiveness is an invitation to communicate and process what has happened. This begins the work to repair the relationship.

— SaraJaneLowry (@SaraJaneLowry) March 22, 2017

It takes tremendous self-awareness, and commitment to transforming relationships to do this work. I believe true leaders embrace the capacity to build genuine relationships that are even better after they’ve messed up. They do it by owning and respecting the power of relationships, knowing that they are the foundational support success. As a coach, I know how hard it can be to work through the steps. Call me if you want to talk.

Question: What has been your experience? Please leave a comment below.

Board’s Fundraising Role and Financial Risk

September 22, 2016 by Sara Jane Lowry

I’m often asked about the Board’s fundraising role. I recently worked with an organization that didn’t receive a grant renewal of $100,000. The funder said their budget was too dependent on grant funding and thus, a risky investment. Their budget is over $700,000, and their individual donations are $8,000. Their 13 board members donate, but didn’t fundraise, write donors, or bring in any other donations. The board’s fundraising role had been neglected.

Another nonprofit I advised was informed by a funder that they were no longer going to fund them. Why? The funder said it looked like they were stable and didn’t need their funding anymore. So, they cut their grant from $300,000 to $o. They have a $1.2 million budget: 70% of which is in foundations and corporate sponsorships. The rest comes from government and rental income. Individual donations hovered around $20,000, and board fundraising efforts by 17 board members was a big fat $0. The board’s fundraising role was not a priority.

So . . . Imagine either of these scenarios at your organization.

Even with advance notice, could you suddenly raise $100,000 to meet your budgetary needs?

According to the Nonprofit Finance Fund’s 2015 State of the Sector report, 53% of nonprofits surveyed have 3 months or less of cash on hand to meet operations. Where do you fall? Are you one of those nonprofits so caught in the cul-de-sac of your existing funding patterns that you no longer have financial resilience? If so, the dangers and limits of this situation can hugely impact your mission. John Pratt’s income reliability matrix is a tool any organization can use to assess how much at-risk their organization is in terms of funding. And this is where the board’s fundraising role and income strategy focus comes in.

The board’s fundraising role

Your board’s fundraising role is to fundraising engine that, along with your chief fundraiser (executive director, or development director), can make the difference between stability or teetering in the winds of change. Analyzing your financial resilience as a strategic imperative is essential.

So, here’s what I recommend:

You need 100% buy-in from your board to make financial resilience a priority. It requires full board engagement. Most of all, they need to prioritize and take action. To map the right mix of income sources takes an understanding of the impact on the organization. How will the new activities impact human and financial resources? Do you have the capacity to do something different?
And, you need a team to serve as a task force to explore the potential of each strategy. What are the challenges, benchmarks, and methodology? Earned revenue, fee-for-service, social enterprise? Small to mid-size donations? Major gifts? They all take work, resources, and strategy.
Get the right people on board to make it happen! Many boards have 1/3 that actively engage, 1/3 that will do something if asked, and 1/3 that are dead weight. So, seriously consider who can help to provide experience, leadership and enjoy challenges. Even consider people who could only come on board for a year. To climb out of existing patterns, you need energy and commitment from everyone.
Prioritize. Where’s the biggest impact you can make with the resources you have? And grants? Yes, that’s still part of the mix. But maybe it’s a capacity-building grant to support the new path to sustainability.

Do it now!

It sounds like a long and drawn out process, right? It doesn’t have to be. That’s why you need a team/task force. And you may need someone internally or externally to drive the process and timeline. It will not be a long drawn out process if the team agrees to meet weekly for three months. Since this is a short-term initiative to create your financial resilience and sustainability plan, include a timeline and action steps for achievement. So, do it now — don’t wait until your organization is in crisis, scrambling to make up those lost dollars. And if you want help getting your plan together, let’s talk!