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.
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”
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
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
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
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
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?
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?
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