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From Chicken Soup to Gumbo: Transitioning from Government/Foundation Based Funding to a Diverse Fundraising Base
Some of you may know I love to cook Southern Cuisine. I love New Orleans Creole cuisine in particular. It brought about a great analogy in my head.
I was thinking of the many organizations who are trying to make that transition from being a nonprofit that is solely based on foundation and/or government funding to a more diverse funding base. These organizations come in all sizes and ages. I have consulted and helped numerous such organizations “find their feet” in fundraising one my might say. Many organizations still receive a healthy amount from government money or foundations but want to fund things that those two types of funders simply won’t fund. Many of these organizations want to grow beyond a stable yet static funding base. The analogy I thought of is this change is like going from making chicken soup to making a complex gumbo. For me it’s, southern parishes style gumbo with Andouille and Shrimp and 14 other ingredients. Chicken soup is fairly simple and it really has one flavor: Chicken. In my opinion gumbo is more complex to cook and has many flavors. To create a great gumbo you need careful planning, you need to be picky about ingredients and you need to find balance. Thus the analogy. When you have one or two funders it’s an annual process of reviews, paperwork, certifications etc. It’s a lot of paperwork and check ins. But it’s fairly understandable and finite. Moving into Annual Fund, Major Gifts, Corporate and Foundation fundraising has a lot of moving parts, timelines, expectations, new types of staffing. This type of fundraising also comes with a lot of misconceptions. It’s like gumbo, complex, there are range of ways to ruin it and it requires patience and you look for balance. Now that I have angered chicken soup lovers nationally. |
One could write a book on this subject, and apologize if I have made any of you hungry but I wanted to get down the key five points I see in a successful transition to a diverse funding base for most institutions.
3. Assemble the Right Team: I say “team”. Too often you have successful organizations that have the resources to hire a team but hire one Development Officer to do everything. Often those expectations are as diverse as can be. Annual Fund, Planned Giving, Major Gifts,Board Giving, Events, Corporate Support, Grant writing etc. This is a colossal and very common mistake. A Board is left wondering why their Development Officers have short tenures, it’s because they can’t do it all. These are each separate jobs.
Staff around your pie chart from the last point. If your support looks like it will come from individuals and corporations then hire around that. There are subtle personality and experiential differences in fundraising positions. A Major Gifts specialist is very different from a Grant Writer. Yet to many Board’s and leadership they are one in the same. If you’re just starting out you don’t need a staff of 20. Start with a small team.2-4 people with administrative support AND prospect research. The latter is super important and consistently neglected in new development teams. In the corporate sales world this would be called “lead generation”. It’s the most important work for early fundraising into new areas that is seldom done. Do your research. KNOW who your best prospects are, don’t waste time guessing. If you’re not aware of Prospect Research there is a whole profession of Prospect Researchers and small teams starting out can hire a freelance Prospect Research consultant until you can afford to hire a full time staffer. Any university in your area will have a team of prospect researchers finding new wealth and philanthropy in your community.
So when it comes to general staffing think of covering the areas I mentioned before. Sometimes you can combine some things but be careful not to overload. New prospecting in any area, individuals, corporate and foundations is harder than working with already giving and educated donors. So look for staff that have done prospecting and identified and acquired new major donors of all types.
4. Don’t Watch the Clock: Yes we want progress and there are ways to measure it. However we want to avoid the notion that all of this is easily done with a little hustle. Individual Major Gifts commonly take years to make happen. As do major Foundation proposals. Just obtaining crucial meetings takes a while. Set realistic expectations for your development efforts and your team. I have seen too many Boards lose patience through an unintentional misunderstanding of the work and its challenges. When you are developing a new diverse funding base it’s understand its exploration. You can go into fruitless areas and make mistakes or you can strike gold and really make it big.
So what do we measure? Measure the pipeline. The fundraising cycle or “pipeline” is Identification, Qualification, Cultivation, Solicitation and Stewardship. You should be able to watch as your new prospects move down this pipeline or cycle. Watch them move closer and closer to solicitation. If you see slow movement find out why?
5. Confronting Misconceptions and Cementing Board Support: I have run into the common notion that Major Gifts fundraising is simply asking rich people for money. One time meeting, you pitch them, they right you a check. That’s the kind of misconception that hurts new development programs. Another is that you can just fire off blind foundation proposals and the money will pour in. I could make a small phone book out of the misconceptions out there about my profession.
When launching a new diverse development program, Board and Leadership need to understand what the work looks like and their role. Boards must do more than agree to tolerate fundraising, they must embrace it. Perhaps that sounds naïve, but it’s not. It’s vital to your success. Much of the misconceptions about fundraising are negative and so they need to be laid out and challenged. Do this ground laying work will save you headaches and confusion later in this process.
Conclusion
Those are the major points. Yes there are budget considerations laid across all I have mentioned. But the general point is like a good gumbo it takes practice, you have to know what you want in the end and plan for it. There is no stock recipe for every organization just some safe guidelines like the one’s I have provided.
Like all change it requires acceptance of risk. Organizations that have survived on government funding and/or foundation funding might not be used to risk. That might be a hard cultural change to make so watch out for it.
If you staff well, set a realistic goal and have some patience you will be surprised what one can achieve. Powerful and dynamic fundraising is a joy. It has a byproduct that infects an organization. The optimistic ability to grow will energize your program staff. It will take your organization great places it didn’t know it could go! Go for it!!
!
Write me if you have questions. My website is www.armandozumaya.com you can find a form there to reach me.
- Understand Your Product: Now we nonprofit folks hate when commercial terms come into our work. But we all have products. If you work on Senior Healthcare and Outreach, your product is healthy active seniors. We need to clearly define what we are selling and make it clear and tangible. One problem with having big government or foundation funding, even if it’s going away is that prospects see you as wealthy and not needing their support. So if you’re going for funding to take your program to places it can’t go with government funding then outline that clearly. Make it exciting, vital and tangible. Explain how it’s urgent and important and not just window dressing.
- What’s Your Funding Mix? You will need to analyze and figure out what your mix of funding might look like in 3 years on. I say “might” because it’s a guess. Think of a pie chart with Annual Funding, Individual Major Gifts, Corporate and Foundations as each slice of the chart. Some things are more compelling to different parts of the pie chart. In some regions if you’re selling scholarships for underserved youth you will probably be able to solicit all parts of that pie. If you’re looking for funding for palliative care for dying a person that’s a lot tougher sell. Few foundations and very few corporations would be interested in that. You will probably have to focus on individuals. Don’t forget it will shift and you have to be able in a year or two of effort stop and make an assessment. This will affect staffing, materials and Board representation.
3. Assemble the Right Team: I say “team”. Too often you have successful organizations that have the resources to hire a team but hire one Development Officer to do everything. Often those expectations are as diverse as can be. Annual Fund, Planned Giving, Major Gifts,Board Giving, Events, Corporate Support, Grant writing etc. This is a colossal and very common mistake. A Board is left wondering why their Development Officers have short tenures, it’s because they can’t do it all. These are each separate jobs.
Staff around your pie chart from the last point. If your support looks like it will come from individuals and corporations then hire around that. There are subtle personality and experiential differences in fundraising positions. A Major Gifts specialist is very different from a Grant Writer. Yet to many Board’s and leadership they are one in the same. If you’re just starting out you don’t need a staff of 20. Start with a small team.2-4 people with administrative support AND prospect research. The latter is super important and consistently neglected in new development teams. In the corporate sales world this would be called “lead generation”. It’s the most important work for early fundraising into new areas that is seldom done. Do your research. KNOW who your best prospects are, don’t waste time guessing. If you’re not aware of Prospect Research there is a whole profession of Prospect Researchers and small teams starting out can hire a freelance Prospect Research consultant until you can afford to hire a full time staffer. Any university in your area will have a team of prospect researchers finding new wealth and philanthropy in your community.
So when it comes to general staffing think of covering the areas I mentioned before. Sometimes you can combine some things but be careful not to overload. New prospecting in any area, individuals, corporate and foundations is harder than working with already giving and educated donors. So look for staff that have done prospecting and identified and acquired new major donors of all types.
4. Don’t Watch the Clock: Yes we want progress and there are ways to measure it. However we want to avoid the notion that all of this is easily done with a little hustle. Individual Major Gifts commonly take years to make happen. As do major Foundation proposals. Just obtaining crucial meetings takes a while. Set realistic expectations for your development efforts and your team. I have seen too many Boards lose patience through an unintentional misunderstanding of the work and its challenges. When you are developing a new diverse funding base it’s understand its exploration. You can go into fruitless areas and make mistakes or you can strike gold and really make it big.
So what do we measure? Measure the pipeline. The fundraising cycle or “pipeline” is Identification, Qualification, Cultivation, Solicitation and Stewardship. You should be able to watch as your new prospects move down this pipeline or cycle. Watch them move closer and closer to solicitation. If you see slow movement find out why?
5. Confronting Misconceptions and Cementing Board Support: I have run into the common notion that Major Gifts fundraising is simply asking rich people for money. One time meeting, you pitch them, they right you a check. That’s the kind of misconception that hurts new development programs. Another is that you can just fire off blind foundation proposals and the money will pour in. I could make a small phone book out of the misconceptions out there about my profession.
When launching a new diverse development program, Board and Leadership need to understand what the work looks like and their role. Boards must do more than agree to tolerate fundraising, they must embrace it. Perhaps that sounds naïve, but it’s not. It’s vital to your success. Much of the misconceptions about fundraising are negative and so they need to be laid out and challenged. Do this ground laying work will save you headaches and confusion later in this process.
Conclusion
Those are the major points. Yes there are budget considerations laid across all I have mentioned. But the general point is like a good gumbo it takes practice, you have to know what you want in the end and plan for it. There is no stock recipe for every organization just some safe guidelines like the one’s I have provided.
Like all change it requires acceptance of risk. Organizations that have survived on government funding and/or foundation funding might not be used to risk. That might be a hard cultural change to make so watch out for it.
If you staff well, set a realistic goal and have some patience you will be surprised what one can achieve. Powerful and dynamic fundraising is a joy. It has a byproduct that infects an organization. The optimistic ability to grow will energize your program staff. It will take your organization great places it didn’t know it could go! Go for it!!
!
Write me if you have questions. My website is www.armandozumaya.com you can find a form there to reach me.
