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How to Fundraise for a Stronger Nonprofit

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To get out of the starvation cycle, nonprofits must raise money to build a stronger nonprofit organization. This is capacity capital. Here's how to raise it.

To get out of the starvation cycle, nonprofits must raise money to build a stronger nonprofit organization. This is capacity capital. Here's how to raise it.

Published in: Government & Nonprofit
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  • Thanks Laurie. There are actually quite a few efforts going on right now to help funders (and nonprofit leaders) understand the need for capacity building, and a move away from the Overhead Myth. See here for a start: http://overheadmyth.com/
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  • This is a great presentation, Nell. I believe that a culture shift is needed in the nonprofit sector regarding what appropriate overall budget percentages should be for overhead costs. However, since this is often dictated by funder mandates I wonder about ways to engage funders and donors in this idea that capacity building is an appropriate allocation of their money...
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  • Thanks Greg!
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  • Why it should be about capacity building and not begging. I thought this was very useful in seeing the difference between the two.
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  • Transcript

    • 1. How to Fundraise for a Stronger Nonprofit ©Social Velocity
    • 2. “Nonprofits that build robust infrastructure (like sturdy IT and financial systems, fundraising processes, and other essential overhead) are more likely to succeed than those that do not.” - Ann Goggins Gregory & Don Howard, “The Nonprofit Starvation Cycle”
    • 3. The Starvation Cycle Funders Demand More for Less Nonprofit Skimps on Staff, Systems Nonprofit Is Less Effective Fewer People Served, Changed
    • 4. The Starvation Cycle Funders Demand More for Less Nonprofit Skimps on Staff, Systems Nonprofit Is Less Effective Fewer People Served, Changed
    • 5. The Starvation Cycle Funders Demand More for Less Nonprofit Skimps on Staff, Systems Nonprofit Is Less Effective Fewer People Served, Changed
    • 6. The Starvation Cycle Funders Demand More for Less Nonprofit Skimps on Staff, Systems Nonprofit Is Less Effective Fewer People Served, Changed
    • 7. Overhead is NOT a Dirty Word
    • 8. Overhead is NOT a Dirty Word % of Dollars Spent on Programs Focuses on inputs, rather than impact
    • 9. Overhead is NOT a Dirty Word % of Dollars Spent on Programs Focuses on inputs, rather than impact Compares apples to oranges
    • 10. Overhead is NOT a Dirty Word % of Dollars Spent on Programs Focuses on inputs, rather than impact Compares apples to oranges Forces nonprofits to “hide” infrastructure costs Distinction is meaningless and destructive
    • 11. Then... Overhead expense ratio 20%+ is unacceptable
    • 12. Then... ...And Now Overhead expense ratio 20%+ is unacceptable Financial health Financial ratings tables Fundraising efficiency Working capital ratio Revenue & expense growth Accountability & transparency Independent board Audited financials Policies/procedures Information sharing Results reporting Align mission and $ Results logic & measures Validators Client voice Evaluations
    • 13. Then... ...And Now Overhead expense ratio 20%+ is unacceptable Financial health Financial ratings tables Fundraising efficiency Working capital ratio Revenue & expense growth Accountability & transparency Independent board Audited financials Policies/procedures Information sharing Results reporting Align mission and $ Results logic & measures Validators Client voice Evaluations
    • 14. Money Core Competencies Mission Connect Mission & Money
    • 15. Financing is... A long-term strategy for bringing enough money in the door to achieve your mission.
    • 16. Financing is... A long-term strategy for bringing enough money in the door to achieve your mission. How much can we accomplish with what we can raise?
    • 17. Financing is... A long-term strategy for bringing enough money in the door to achieve your mission. How much should we raise to accomplish our goals? How much can we accomplish with what we can raise?
    • 18. Board, Staff, Donors Money Strategy Infrastructure Sustainability Funding Sources Programs Message Fundraising Vs. Financing Worn out Excited, engaged Annual, programs Long-term, all costs Inadequate Fully funded Weak Few Strong GrowingFlat or declining Diverse, Robust Community changeNeed
    • 19. Board, Staff, Donors Money Strategy Infrastructure Sustainability Funding Sources Programs Message Fundraising Vs. Financing Worn out Excited, engaged Annual, programs Long-term, all costs Inadequate Fully funded Weak Few Strong GrowingFlat or declining Diverse, Robust Community changeNeed
    • 20. Board, Staff, Donors Money Strategy Infrastructure Sustainability Funding Sources Programs Message Fundraising Vs. Financing Worn out Excited, engaged Annual, programs Long-term, all costs Inadequate Fully funded Weak Few Strong GrowingFlat or declining Diverse, Robust Community changeNeed
    • 21. Board, Staff, Donors Money Strategy Infrastructure Sustainability Funding Sources Programs Message Fundraising Vs. Financing Worn out Excited, engaged Annual, programs Long-term, all costs Inadequate Fully funded Weak Few Strong GrowingFlat or declining Diverse, Robust Community changeNeed
    • 22. Board, Staff, Donors Money Strategy Infrastructure Sustainability Funding Sources Programs Message Fundraising Vs. Financing Worn out Excited, engaged Annual, programs Long-term, all costs Inadequate Fully funded Weak Few Strong GrowingFlat or declining Diverse, Robust Community changeNeed
    • 23. Board, Staff, Donors Money Strategy Infrastructure Sustainability Funding Sources Programs Message Fundraising Vs. Financing Worn out Excited, engaged Annual, programs Long-term, all costs Inadequate Fully funded Weak Few Strong GrowingFlat or declining Diverse, Robust Community changeNeed
    • 24. Board, Staff, Donors Money Strategy Infrastructure Sustainability Funding Sources Programs Message Fundraising Vs. Financing Worn out Excited, engaged Annual, programs Long-term, all costs Inadequate Fully funded Weak Few Strong GrowingFlat or declining Diverse, Robust Community changeNeed
    • 25. Board, Staff, Donors Money Strategy Infrastructure Sustainability Funding Sources Programs Message Fundraising Vs. Financing Worn out Excited, engaged Annual, programs Long-term, all costs Inadequate Fully funded Weak Few Strong GrowingFlat or declining Diverse, Robust Community changeNeed
    • 26. Revenue Ongoing Supports day-to-day BUYS services Beds for a homeless shelter A Money Distinction
    • 27. Revenue Ongoing Supports day-to-day BUYS services Beds for a homeless shelter Vs. Capital One time Supports BUILDS organization Technology, evaluation, development staff A Money Distinction
    • 28. Capacity Capital BUILDS a Nonprofit Technology Systems Planning Development staff Training Leadership development
    • 29. Nonprofit lacks infrastructure Capacity capital strengthens the nonprofit Nonprofit achieves more outcomes, impact
    • 30. Nonprofit lacks infrastructure Capacity capital strengthens the nonprofit Nonprofit achieves more outcomes, impact
    • 31. Nonprofit lacks infrastructure Capacity capital strengthens the nonprofit Nonprofit achieves more outcomes, impact
    • 32. But raising Capacity Capital requires your nonprofit to have a Theory of Change
    • 33. Community Resources Nonprofit Community change The Theory of Change
    • 34. Community Resources Nonprofit Community change The Theory of Change
    • 35. Community Resources Nonprofit Community change The Theory of Change
    • 36. Inputs ($, kids, tutors, staff) Activities (provide literacy tutors to at- risk kids) Outputs (# kids, # hours) Outcomes (better reading, better scores) Impact (stronger schools, educated citizens, economic parity) The Theory of Change
    • 37. Inputs ($, kids, tutors, staff) Activities (provide literacy tutors to at- risk kids) Outputs (# kids, # hours) Outcomes (better reading, better scores) Impact (stronger schools, educated citizens, economic parity) The Theory of Change Nonprofits usually stop here
    • 38. Inputs ($, kids, tutors, staff) Activities (provide literacy tutors to at- risk kids) Outputs (# kids, # hours) Outcomes (better reading, better scores) Impact (stronger schools, educated citizens, economic parity) The Theory of Change Nonprofits usually stop here But this is where it gets really compelling
    • 39. Young Readers brings at-risk students to grade level in reading, resulting in: More succeeding students Better schools A more educated workforce A more equitable economy and community
    • 40. Begging “With your support, we can provide more tutors for children.”
    • 41. Investing With your support, children… Learn to read at grade level by 3rd grade
    • 42. Investing With your support, children… Learn to read at grade level by 3rd grade Which leads them to… Do better in school Graduate from school Succeed in life and work
    • 43. Investing With your support, children… Learn to read at grade level by 3rd grade Which leads them to… Do better in school Graduate from school Succeed in life and work As our partner, you help create… More contributing citizens Lower social costs A stronger, healthier community
    • 44. $350K in Capacity Capital New donor database Online giving software Staff Training Market research Marketing materials Case Study
    • 45. $350K in Capacity Capital New donor database Online giving software Staff Training Market research Marketing materials Results Annual revenue up $1.6 M (40%) Number of donors up 36% to 19K+ Case Study
    • 46. 1. Create a capacity building plan 4 Steps to Raising Capacity Capital
    • 47. 1. Create a capacity building plan 2. Develop a capital goal 4 Steps to Raising Capacity Capital
    • 48. 1. Create a capacity building plan 2. Develop a capital goal 3. Create a pitch 4 Steps to Raising Capacity Capital
    • 49. 1. Create a capacity building plan 2. Develop a capital goal 3. Create a pitch 4. Find prospects 4 Steps to Raising Capacity Capital
    • 50. 1. Create a Plan
    • 51. 1. Create a Plan What must change in your organization? Goals
    • 52. 1. Create a Plan What must change in your organization? Goals Over what timeframe? Timeline
    • 53. 1. Create a Plan What must change in your organization? Goals Over what timeframe? Timeline What are the steps to get there? Tactics
    • 54. 2. Develop a Capital Goal
    • 55. 2. Develop a Capital Goal What must change? Better technology and systems Long-term planning Development staff Leadership coaching Board training
    • 56. 2. Develop a Capital Goal What must change? Better technology and systems Long-term planning Development staff Leadership coaching Board training What will it cost?
    • 57. # of Gifts Gift Amount Total $s # of Prospects Lead Gift 1 $15,000 $15,000 4 3 $10,000 $30,000 12 5 $5,000 $25,000 20 8 $2,500 $20,000 24 10 $1,000 $10,000 20 TOTAL 27 $100,000 80 $100K Capital Goal
    • 58. # of Gifts Gift Amount Total $s # of Prospects Lead Gift 1 $15,000 $15,000 4 3 $10,000 $30,000 12 5 $5,000 $25,000 20 8 $2,500 $20,000 24 10 $1,000 $10,000 20 TOTAL 27 $100,000 80 $100K Capital Goal
    • 59. # of Gifts Gift Amount Total $s # of Prospects Lead Gift 1 $15,000 $15,000 4 3 $10,000 $30,000 12 5 $5,000 $25,000 20 8 $2,500 $20,000 24 10 $1,000 $10,000 20 TOTAL 27 $100,000 80 $100K Capital Goal
    • 60. # of Gifts Gift Amount Total $s # of Prospects Lead Gift 1 $15,000 $15,000 4 3 $10,000 $30,000 12 5 $5,000 $25,000 20 8 $2,500 $20,000 24 10 $1,000 $10,000 20 TOTAL 27 $100,000 80 $100K Capital Goal
    • 61. # of Gifts Gift Amount Total $s # of Prospects Lead Gift 1 $15,000 $15,000 4 3 $10,000 $30,000 12 5 $5,000 $25,000 20 8 $2,500 $20,000 24 10 $1,000 $10,000 20 TOTAL 27 $100,000 80 $100K Capital Goal
    • 62. # of Gifts Gift Amount Total $s # of Prospects Lead Gift 1 $15,000 $15,000 4 3 $10,000 $30,000 12 5 $5,000 $25,000 20 8 $2,500 $20,000 24 10 $1,000 $10,000 20 TOTAL 27 $100,000 80 $100K Capital Goal
    • 63. # of Gifts Gift Amount Total $s # of Prospects Lead Gift 1 $15,000 $15,000 4 3 $10,000 $30,000 12 5 $5,000 $25,000 20 8 $2,500 $20,000 24 10 $1,000 $10,000 20 TOTAL 27 $100,000 80 $100K Capital Goal
    • 64. 3. Create a Pitch
    • 65. 3. Create a Pitch Plan What is your plan for building capacity?
    • 66. 3. Create a Pitch Plan What is your plan for building capacity? Budget What do you need and what will it cost?
    • 67. 3. Create a Pitch Plan What is your plan for building capacity? Budget What do you need and what will it cost? Projected ROI What will the results be? More productivity? More revenue? More outcomes?
    • 68. 4. Find Prospects
    • 69. 4. Find Prospects 3 Criteria
    • 70. 4. Find Prospects 3 Criteria Capacity: to give at the needed level
    • 71. 4. Find Prospects 3 Criteria Capacity: to give at the needed level Connection: to a peer at the nonprofit
    • 72. 4. Find Prospects 3 Criteria Capacity: to give at the needed level Connection: to a peer at the nonprofit Concern: for the mission
    • 73. 4. Find Prospects 3 Criteria Capacity: to give at the needed level Connection: to a peer at the nonprofit Concern: for the mission Start Inside & Move Out Board of Directors with capacity Major Donors Other “Friends” (volunteers, advisors) Foundations/individuals
    • 74. Learn More… Launch a Capacity Capital Campaign Step-by-Step Guide
    • 75. Learn More… Launch a Capacity Capital Campaign Step-by-Step Guide Download Here
    • 76. Other Nonprofit Tools E-books Bundles Webinars Guides socialvelocity.net/tools ©Social Velocity

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