A complete take on Fundraising Practices, specially tailored to impact driven entrepreneurs
“Fundraising is the gentle art of teaching the joy of giving”
The process of fundraising can be defined as a cycle where pieces of the puzzle come into play and it all starts by identifying potential donors, then on qualifying their mission to the target of the project, followed by cultivating the relationship, soliciting and practicing stewardship.
This relationship is ideal when you intentionally nurture the relationships you cultivate along the way between donors and supporters towards your project.
And it begins with Identification by levering search engines such as LinkedIn, benchmarking annual reports, tapping into databases, asking your current network, attending conferences and industry events with a clear message:
“Your prospects are everywhere and every person within your organisation can/should help with identifying them.”
When you begin by selecting the ones that are most aligned with your criteria you stand a better chance of success, and a less bumpy ride along the way.
And here’s a wise suggestion to follow:
“do not approach everyone!”
Instead, follow this essential criteria list in the selection process, identify:
Their mission/areas of interest
Thematic priorities
Countries of intervention
Head office address
Eligibility criteria
Type of support
Application process format
Deadlines for submission
Generic contact details
The added value to this process is that board members and potential contacts are already present within your network, you just have to put on your thinking hat!
When you dig into annual reports or websites to obtain financial information, you will be able to find valuable data on minimum and maximum grants, or annual budgets to guide your approach and reach out directly. It is always helpful to look at their list of projects funded to better target the donor’s interests.
“Spending quality time qualifying is key to avoid wasting time later on.”
Ultimately, consistency over time trumps any spontaneous effort when leveraging the fundraising process. Therefore, it is essential to think on your policy first and then start the identification process, the more you practice the more you’ll get.
Start by performing an active mapping, research your prospects so that you can connect the dots.
“ When in business, first you have to build a pipeline!”
In the cultivation stage, organise events to raise awareness to showcase results of the projects, book booths at conferences, and build trust! It Is suggested to meet your supporters, understand them, cultivate the relationship, champion programs for advocacy and engage with the country missions. And, it is key to tailor and share a clear narrative to cultivate this relationship with your prospects efficiently.
“A clear message trump big promises; always seek alignment!”
In the solicitation stage, seek to:
Submit a funding proposal
Reach a high-level outreach (founder/president/CEO, etc)
Host lunch/dinner to report periodically in a more casual environment
Engage potential donors directly by submitting a concept note
Pitch proposals
Respond to open calls
Write appeal letters
Respond to grants
Invite sponsors to come and see the program
It is important to mention, there is a common trap many fall into. Many get stuck doing the same thing over and over again. What worked before might not work again, hence, keep the options in this list present and relevant in your ideas folder.
And regarding stewardship, always remember it is easier to retain a donor than acquire a new one. There’s no one way to do it. The key steps are: gift, thank you, expectations, recognition, impact, cultivation. So, when drafting your strategy, develop a coherent set of actions that are specific, attainable and doable by yourself and with your current team. And, be careful, do not mix your stewardship actions/events with fundraisers. Rather keep them separate!
As mentioned before, donors are everywhere, here five main categories of donors to keep in mind:
Private and corporate foundations
Corporations
High net-worth individuals
Small donors/general public
Public funds
The giving capacity and cultivation strategy is specific to each. Overall, it is key to tailor and be specific, and treat each as they would expect you to. For example, you can expect differences in the speed of the paperwork cultivation, building the relationship, giving capacity, just to name a few. Each one of them will have a different reason to give and will have different expectations in exchange, so build a category for each.
When applying for a fundraising project, it is recommended to follow project management principles, for example splitting each request in these 3 phases is highly recommended:
Design phase
Implementation phase
Reporting phase
Format wise, most public funds such as Swiss Development Cooperation and large NGOs will give you a template to fill out, strongly formatted.
“The ultimate goal of a project is change!”
However, we have to be explicit on what we are changing. A situation, a problem, a reality that is viewed problematic for a specific target group, community, etc. Therefore, when delivering results of the project, grant examiners have this criteria in mind: 63% in the design phase and 37% in the implementation phase.
It is key to keep in mind, since we are engineering social change, we are moving resources that trigger change that most of the time we can not control. The most important aspect to emphasise is to prove that you collaborated, hence designing the project based on the result management framework is key.
Highlight the context where change is expected to happen, leveraging tools such as the theory of change, for example. And when measuring impact, since the word itself can be vague, it is suggested to rather opt for qualitative (long frame approach) explaining why the contribution at the community level, for example, and the quantitative (impact evaluation) attributing how much was done.
It is key to promote the development principles and the project must meet the technical criteria because these are the lenses used to evaluate your project. Some of the tools recommended are the problem tree, logical framework, context analysis, stakeholders analysis, interest power matrix, logical framework, planning and activities Gantt chart, monitoring plan, risk management matrix, funding plan, among others.
Managing expectations is key in this process. For example, a corporate donor expects control of the donation via due diligence, versus an individual donor expecting to receive a tax receipt in exchange, plus witness stability of the project over time. It is key to find out the strategic positioning of the donor first.
Hence, a big question arises:
Why you and not another non profit?
The answer to this question is what will give the right angle to continue the discussion.
It is important to remember that getting the buy-in for the first small project is a big win because from then on the conversation could potentially grow to even bigger donors. In brief, it is key to:
Understand the donor’s motivations, ambitions, visions and interests before asking for the money.
Customise the story for each stakeholder and organisation to use the right levers.
Find a win-win situation, for example: money vs. effort.
Demonstrate your level of professionalism.
Use facts and numbers to emphasise and prove your impact.
Stop saying you are unique but show how you are being disruptive.
This shift in mindset is complex, so here are key questions to ask yourself before starting any fundraising effort:
Have you designed the project?
Is your project strong enough?
Do you have a project proposal, concept note and budget?
Have you already secured part of the funds?
Do you have the green light from management/board?
Did you plan enough time to fundraise?
Do you already have a pipeline?
Do you have a CRM or prospect/donor management tool in place?
Always keep in mind donors might ask for your fundraising strategy, always have it ready!
And, aim to keep in mind these seven key elements to consider:
Project design, for example, SWOT analysis of your project
Financial objective
Prioritisation of your fundraising targets, time vs gift matrix
Messaging, donors motivation table
Other assets to leverage, for example: board, partners, current donors, joint fundraising, local offices, to name a few
Plan and implementation strategy
Monitoring and evaluation strategy
And also keep in mind that the industry standard of conversion rate is 10%, so ask yourself, how can we create trust in order to reach donors?
Positioning and thought leadership raises your profile among audiences that matter to you, so invest time identifying your audience.
“When you position yourself, you will attract donors by leveraging your know-how”
When looking into applying these industry practices in the social entrepreneurial world, a few factors need to be adjusted. Furthermore, when thinking on innovating in fundraising, the tendency would be more towards a shift from 1:1 to 1: many, in the sense that a one time activity becomes a fundraising product that then turns into a recurring source of income. Only then we would be able to speak about fundraising innovation programs.
Nevertheless, this reality is only applied by a few in the market today, but if it were the norm would follow this golden principle:
Challenge the status quo
Accept failure (if you are learning in the process)
Be user/donor centric
Be data driven
Be agile (adopt a learning approach)
Avoid starting from scratch
Ask for help, share and collaborate
And, best of all, aim to involve donors to become part of the fundraising innovation process. Along the way, always keep the value proposition relevant to the donors. And look into the impact investing and the environmental, social and governance market as a court to play.
Do you start seeing the parallels between both the fundraising world and the entrepreneurial world?
As startups, we know it is key to keep in mind when innovating to leverage upon what already exists, as social entrepreneurs, it is key to keep in mind we are raising money for the cause not the organization. Hence, the best way forward is to measure impact and monetise those results.
And, when thinking about creating a fundraising culture within your organisation, think of fostering inclusion, transparency, empowerment, collaboration, and celebration.
Strategic communication and positioning is fundamental. Your strategy, the way you think, your creativity has the power, not the channel you pick.
“ Identity is your most valuable currency”.
Hence, keep in mind:
It is a process
Every insight is a story to tell
Data inform, story sells
If you are findable, you are fundable
Coherence is key, the common element is that they need to see it
Timing is relevant
The conclusion, narrowing it down specifically to impact driven startups, is that within the startup world we seek investors and in the NPO world we seek gifts. There seems to be a mistrust between both worlds, but in reality it is just two worlds speaking different languages and aiming for the same good. These two are not yet used to thinking how close they are, hence lack the opportunity to tap into each other's worlds. They both pitch for something they stand for, for a cause/something that makes them feel confident.
The reality is that we need to facilitate a shift in order to innovate and bring the best practices of these two worlds together because in the crossing we have impact projects that are ready to solve real world problems we are facing today, and these need funds.
Therefore, the most relevant question arises, how can we close the gap and help with fundraising actions channel funds towards projects with social impact?
The answer:
Target an audience.
Carry responsibility to do it right.
Recognise the value of work is equal to money.
Build upon the conviction that today’s modern ways of funding embody diversity to earn the right to play for a better world.
In conclusion, no matter if you’re a founder or an employee of a NPO, we have to embody the change we want to lead and convince people to back us with transparency, honesty and authenticity. Fundraising for social impact is a relevant topic to further explore as preneurs of regenerative food systems, and I am here to continue this conversation with various industry actors.
In the process of my research, I had the chance to collaborate with one of my peers and this is what he had to say:
“It was a pleasure to work with Andrea on the Fundraising for my Association Árbol co(n)razón. She was full of energy and motivation and ideas sparkled out of her head, ready to apply all the various lectures she had learned during the fundraising course. This energy has been contagious and together we have worked efficiently and focused on funding proposals to create a Nature Reserve in the Andes of southern Ecuador.”
Disclaimer: these findings I learned in the course Mastering Fundraising Practices at the Geneva Graduate Institute. The content herein is based on my note taking while in class, and my understanding of social entrepreneurship and its need for funding. In case you’re interested in continuing the conversation, feel free to DM on LinkedIn.
