Tuesday, October 17, 2006

Seeking Grants for New Programs Or Start Up Non Profits

Fundraising planning must be a new non profit's priority.

My point is underscored by a real local agency doing needed important work. This agency is seven years old and just starting to grow. At its start the organization's administration was sincere, but sporadic and distracted. Now it is being run by organized, committed, and concerned volunteers, who among other improvements hired their first Executive Director. The Board is being developed. They are also expanding services to meet new local needs.

With the expanded services comes the need for more money.

Their only method of raising money has been writing grant requests. Today this organization is eager to raise the money to hire a part time Programs Manager and a part time Volunteer Manager (who may wind up being one employee working these two positions).

They're in an exciting time in their growth. This org is transitioning from one with goals; into an organization meeting needs. This is a great accomplishment for the local underserved population that they work to assist.

I understand that the volunteers and staff of this organization are eager and excited to provide the much need services to their constituents. I understand, too, that they are not fundraisers, first. Rather, serving the community is their whole motivation and THE part of this agency's work that they enjoy. But, I have a few concerns that they can address now, to do something as basic as secure the future of their organization!

Concerns:

1. This organization has only been raising funds through grant writing. While it is one avenue of fundraising that start up non profits should develop, it is not enough to expect all of your agency's cash flow to come from one revenue stream ever, even while starting up! Add other methods, maybe special events, annual appeals, bequests, online donations to your website, a regular request in your quarterly newsletter, major donor development, corporate sponsorships, etc. to your fundraising plan. One method of fundraising is dangerously not enough for any organization (large or small)!

2. They plan to develop their fundraising. Right now they are looking for a consulting grant writer. Some day they'll hire fundraising staff. Again, this is dangerous. On average it takes three years to begin to actually receive more funds than it costs to raise them from a new fundraising method (and this varies depending on the method of fundraising). Let's say that this organization begins a major donor campaign in 2007, to develop local members of the community who will give to their organization at large gift amounts. This means that they can expect to make more in donations than they're spending towards the major donor program, only beginning in 2010. Yes, it takes this long and costs that much; but the long term benefit is financial security. Long term vision and planning are key! Volunteers and staff are requisite in order to implement multi-method fundraising plans. The cost/benefit ratio must be researched.

3. Any entity (foundation, government, major donor, corporation/business, etc.) who may donate larger amounts to this organization's great work will expect that they are giving to a sustainable program or project. If there is no indication that the agency can sustain itself, its' growth, or its' programs/projects; then donors will not see why they should give. Organizations who expect to succeed in their growth must complete their due diligence in their fundraising work; there must be a well rounded development plan (or fundraising plan) that the Board and Development staff have agreed upon and implemented into action. Non profits are always under stress to meet fundraising expectations, but if planning is realistic and based on what is truly reasonable to expect (given the organization's past fundraising capabilities, the local community's fundraising climate, the level that the local community is saturated by the fundraising strategy that you're implementing, etc.) then the fundraising goal will be met!

4. In the beginning of a program or project grant funders like to get involved from the outset. At the point of initial planning call the foundations that you're considering asking for assistance (if they don't mind calls) and tell them, 'we're just starting out the planning of this upcoming project, we thought you guys might want to work with us to meet this project's goal in our community'. But, after the project is underway don't expect these donors to give again. You will have to have developed a fundraising plan based on the project's budget that will sustain this project. For instance, if you are expecting a salary to repeatedly be raised year after year through grants, please think again. Overhead is not a favorite budget line item that grant donors will regularly support. In the fundraising plan get the salaries off of the 'to be raised by grants' list. Instead, raise the cash flow for salaries maybe via annual donor support, or annual special events, or some other more reliable annual method.

The Point:

Fundraising must be a start up non profit's initial concern.

In order to raise funds you must have planned out your organization's fundraising strategy, goals, and plan; and implement them. Donors only give to orgs with futures.

In order to support the growth of your organization (which will involve marketing, starting new programs, hiring staff, raising larger dollar amounts, growing a volunteer base, training, and managing increased administration) there has to be money being raised that pays for the current agency work AND the additional (increased) agency's work in the future.

In order to secure the future of your organization, and more importantly, to be sure that need in your local community that you're addressing continues to be given assistance; you must have a healthy, diverse, well researched, and realistic fundraising plan.

A word to the wise; strategic fundraising planning can not be an afterthought. It must be among the first work a new non profit plans out and does.

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