The passion most non-profit leaders feel for their mission may lead to an insatiable appetite to continually expand services. This creates agencies that are constantly ‘hungry’ and searching for “easy” ways to generate additional funds. Often, they look at the following ideas to raise money:
- finding a government funder;
- implementing a fundraising activity;
- hiring a fundraiser, or;
- writing grant applications.
While each of these can be part of the solution if they are implemented at the right time and in the right way; each also entails risk and considerable time between the idea and return on investment.
Government funding is granted to agencies that implement programs that meet government agendas in an economical manner. Regardless of how worthy a cause is, if it is not on the government agenda, it will not receive funds. There is often steep competition to access new government funding and typically, governments favour agencies that they already have funding relationships with. Agencies may have more success with one-time funding programs, however these are typically small grants; usually fund a specific “new” or “innovative” program and often require agencies to provide information about how they will ensure program sustainability after the grant money is spent.
There are also significant strings attached to government funding. Typically, agencies receiving government funds must follow public sector policies, must report on the use of the funds in the manner the funder dictates and often, both the board and staff will be required to attend funder directed professional development and planning meetings. For more information on the implications of government funding please see Government Funding – Selling your Charity’s Soul or Guaranteeing its Future?
Another way that charities fund themselves is by holding fund-raising events. These range in scope from small events such as bake sales to major galas or tournaments. They may raise less than $100 or more than $100,000. Often an agency launches a fundraiser without doing their homework. Many fund-raising events use extensive volunteer, staff and donor time and goodwill. The financial rewards may be very small after expenses and many events lose money. Before launching a fundraiser, a charity should have a good idea about how they will market the event, whether they have the connections and knowledge to make the event profitable and how much staff and volunteer time must be redirected from other agency needs to implement the event. They also need to consider whether the people who will spend money at the event would have simply donated the money instead.
Many agencies, especially those with charitable status, that have become stagnant with existing funding decide that the key to expansion is hiring a fundraiser. This may be an excellent, long term solution provided:
- The agency budgets enough money to hire an experienced fundraiser;
- The agency leadership, including its board and senior staff, understand fund development and are prepared to contribute to fund development activities including making personally significant donations, using their personal contacts and being involved in asking for funds; and
- The agency will be able to carry the cost of the fundraiser’s salary for at least a couple of years until the amount raised begins to cover these costs.
For agencies that are newly embarking on fund raising, there are low cost activities to undertake prior to hiring a fund raiser including
- Accessing fund development training for board and senior staff members;
- Ensuring appropriate stewardship of their existing donors and members, and;
- Ensuring that they identify themselves as a ‘charity’ (if applicable) and ask for donations.
Regardless of who the agency has on staff, the senior team must be involved in fund development for the program to be successful. Whether the agency has a fund raiser or not, leadership know-how is critical to success. Before hiring someone to fundraise, agencies should implement a donor stewardship strategy that quickly, reliably and suitably acknowledge and appreciates donations. If your agency’s donor stewardship only involves sending out donation receipts once a year, you are likely not getting many repeat donors. (Please also see “Think Twice Before Creating a Fund-Development Department.”)
Finally, identifying your agency as a charity (if applicable) and asking for money is important. While it may seem self-evident to you; most people who use your service have probably never given a thought to how you are funded. They may assume you are a branch of government, or that the small fee you charge fully covers the cost of the services you offer. If you do not use the word ‘charity’, and you do not ask for money, chances are, people don’t think about you when they make donations.
Grants may be viewed as a funding panacea for many agencies; access to unlimited money! In social media groups for non-profits, there is a repeat message “I’ve gotten my registration, where do I go to get grants?” Agencies may sign up for access to an on-line data base of grantors where there are thousands of foundations ‘just waiting’ for an application, after which gobs of money will be forthcoming. The reality is that agencies can spend thousands of dollars and thousands of hours applying for grants and not receive a cent for their efforts.
Again, there are some techniques to improve the outcome:
- Find a database that matches your needs including how long and how often you want to research grants. Don’t pay for more than you will be able to use and look for free sources of information before you pay;
- Write a ‘case for support.’ Cut and paste from your case for support into grant application forms to save time and ensure accuracy.
- Do your homework. Many foundations give to the same agency(s) each year; many have very specific and narrow areas of focus; and some do not give each year. If you are struggling to find an angle to fit into the grantor’s stated areas of interest you are probably not going to be successful. Apply for grants where the interests are clearly aligned, and where the grantor is open to funding new agencies.
A few final fund-raising suggestions:
- Just because you are passionate about something does not make it anyone else’s obligation. If you are using the word “should,” as in, the government “should” fund this; or this person “should” donate, you may struggle to be successful.
- Once you have received funds, be appreciative, provide feedback to the donor about the impact of their donation and remember on occasion to speak to your supporters without screaming for more.
- Ensure that the rest of your organization is in order. Many people research organizations to ensure their money is well stewarded. People looking at your agency should be easily able to find financial statements, program information, statistics and testimonials.
The best time to plant a tree was 20 years ago. The second best time is now. Chinese Proverb
Many agencies are very successful in fund development. It is important to remember that they probably took a long time to get there. Start today to improve your agency’s tomorrow.