We’ve reached the end of our rope. One of our funders has extended a grant to ensure we survive this year, but how do we prove to them (and others) that we’re a viable organization?
Ouch…that’s a really hard question and I’m so sorry it’s come to that point but, sadly, in this economy you are not alone. I need to address your question in general terms because I’m not completely familiar with all the circumstances that led to such a dire situation.
Organizations should think (much more than) twice about “crying wolf” (in fact, I’ve heard to only consider such desperate measures every 25 years or so…if at all). The trouble with crisis fundraising is that you may have a compelling case for dedicated supporters BUT your request also smacks of mismanagement so your reputation may be a hard sell. That’s not to say everything about the organization was managed questionably, but it certainly raises significant questions about the board’s view of strategic planning, fiscal responsibility, and diversified fundraising.
My understanding, in your case, is that private sector fundraising (from individuals, businesses, foundations and other small groups like service clubs or other third party ventures) was never a high priority. That may be a consequence of the organization’s target group or stakeholders – intermediaries, provincial or national entities don’t always have a logical audience who’ll invest in activities. It may also be because solicitations of this nature require the board of directors to “champion” them. Frequently, those volunteers don’t have the skills or comfort level to initiate requests to their friends and acquaintances, and there is minimal training provided internally or budgeted for external support.
You relied on public sector funds from various levels of government. There were a number of strings attached because many funders won’t underwrite operating costs. Project-related grants ruled the majority of your appeals, but the reality is that is often an example of the “tail wagging the dog” (i.e. you look for projects that might be considered viable and ask staff to respond accordingly, often without considering the ramifications on the human and financial resources). The trouble with that reactive approach to fundraising is that (a) the projects don’t always fit your organization’s strategic plan (if you have one) and (b) it’s possible that in your proposal you haven’t built in adequate operational costs to deliver effectively on your promises.
Often, in our attempt to be budget conscious, we can overlook the real costs of functioning effectively. It’s true that many funders won’t support operating costs, but it’s our job to demonstrate how our work can ultimately save taxpayer dollars (usually because we don’t need huge bureaucracies to accomplish our goals). Then it’s our ethical duty to deliver on our promise and report transparently back to our supporters during and at the end of the project and regardless of the source of funds. That is the key to the all-important relationship-building that encourages – though never guarantees – our base of support.
Back to your question, specifically. If you haven’t already proven to your funder that you are a viable organization, worthy of their support (despite having survived many years), it’s a very hard task to accomplish when resources are SO tight and you are under the microscope! There is no quick fix. A successful fundraising strategy can take three to five years to show results. Funder/donor acquisition is one of the most expensive components in the mix.
My advice to your board of directors would be:
- Review your strategic plan, evaluate your progress, and revise accordingly. Identify what you can trim from this year’s tactics that will reduce immediate costs.
- Be frank with your biggest investors and invite their advice…remember, ask for funds and you’ll get advice. Ask for advice and you’ll certainly build ownership in the problem that will hopefully pay dividends.
- Take stock of all the accomplishments (benefits) of the organization during its existence (we work so hard and are often too busy to celebrate milestones or reflect on “lessons learned” – demonstrate that there is a definite benefit to your existence).
- Relate those achievements to how they assist government (and other funders) in alleviating challenges that concern taxpayers and voters. If possible, back those statements up with testimonials (are you keeping track of external feedback?).
- Ensure the board understands its important role as champion of your fundraising efforts. Not everyone needs to feel comfortable asking for money but they can help with prospect identification, donor stewardship, and relationship building to name a few. Identify individual strengths and preferences and ensure people have the necessary tools to seek out investment opportunities, open doors within their areas of influence, and accompany the chief executive on fundraising calls.
- Review customer/client feedback, evaluations you’ve initiated for programs, intervention, and educational opportunities like conferences or workshops to demonstrate amd validate the value of your services.
- Inventory successful fundraising or grant requests (and any feedback from them) to prove to investors that they are “backing a winner.”
- Identify the “elephants in the room.” Too often we polite Canadians avoid barriers…if people aren’t contributing to the lifeblood of the organization we have to ask ourselves, why not? Where have we failed them? Have our expectations been clearly communicated and are we helping them succeed? Do we measure success annually (board, staff and program evaluation) and do the results inform emergent strategies? Are activities based on predefined goals? Have we addressed (or even asked about) stakeholders’ concerns? Are we providing adequate training for boards, volunteers and staff to flourish?
- Thoroughly explore any partnerships with other nonprofits or charities that will reduce your costs and help build your viability for support. Keep in mind these arrangements can vary in degree from jointly managed programs and consolidated administrative functions to full-scale mergers. The key to all of them is rooted in clear and ongoing communication, documentation of expectations, and an attitude that the whole may be greater than the sum of its parts.
Remember LAI – Linkage, Ability, Interest – when targeting potential donors. Which prospects does your board of directors have primary or secondary contact with? (i.e. “I know this person well and can introduce you” OR “I’m acquainted with them and I’m willing to open the door”) Those linkages need to be documented and capitalized upon. Is there any track record of their support to your organization or others that is similar and at what level (ability)? Will that donor have a passion for your cause based on her life priorities and the organization’s mission (interest)?
There are a number of difficult decisions your board and CEO need to make right now. Unfortunately, it often takes a crisis situation to motivate the leadership to have an honest and deep dialogue that can inspire creative responses. While it may be survival of the fittest, don’t sell your soul in desperation! If you believe you have one or more USPs (unique selling points) then rally the troupes and pull out all your stops…you have nothing to lose if your existence is in question! Invite your stakeholders to invest in your future and then prove that their money is well spent.
Cynthia Armour is a freelance specialist in fundraising and governance. A Certified FundRaising Executive (CFRE) since 1995, she volunteers as a subject matter expert with CFRE International. She works with boards and senior staff to ensure that strong leadership will enhance organizational capacity to govern and fundraise effectively. Contact Cynthia directly at 705-799-0636, e-mail answers@elderstone.ca, or visit www.elderstone.ca for more information about her services.
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