The politics of funding – Is your program relevant to grantors?

The reality of nonprofit funding is that sometimes your mission isn't trendy enough to attract support.

Take the current interest of increasing participation in post-secondary education, and contrast it with the goal of helping low-income people get jobs.

One the one side you have millions being poured into missions supporting STEM education, such as instruction in how to access financial aid for college.

On the other hand you have more local nonprofits struggling to get enough funding to do things like improving access to the workplace for people who just need a steady paycheck.

One group with the latter mission focuses on providing decent clothes for interviewees and training to improve interviewing skills and focuses primarily on workers aged 40 and up, displaced from the job market during the recession. Typically they purchased clothing from local retailers and made it available to interviewees. The program budget was in the low five-figure range annually.

This group is starting to find that even jobs which shouldn't require any sort of post-secondary degree are suddenly being restricted or at least are preferential to college grads only.

An example of this is seen in an advertisement for seasonal employees for a major home improvement supplies retailer. The specific opening was for a seasonal week-end position assisting customers in the lumber department.

The ad reads as follows:

"Preferred Qualifications:  Associate's Degree in Business, Retail Management, Specialty related to department (e.g., design, appliances) or related field OR Certification in trade related occupation required."

Most potential applicant's never get past that sentence, although much further on in the ad it does say a minimum of one years experience is also acceptable.

The low-income-focused nonprofit had several people available who had actually done the job for other employers, or who have experience in other types of sales, but they don't have any of the paperwork required. No degrees, no certifications, just decades in the building material or building trades. Several of their people applied, but none were even interviewed.

That matters, because it lowers the impact, i.e. the provable results of their program, making their program appear less effective.

The aforementioned NPO working with the older jobseekers stated that most of their previous funding sources had switched over to what the frustrated ED called "more media-attractive" support. Their funding has dropped by over 50% since 2010, due to grantor mission realignment.

I suggested that perhaps they needed to incorporate programs that were more, shall we say, "funding-friendly" such as programs to get their people into some type of educational setting or training to make a complete career change.

His answer was that maybe funders need to start looking at the world his people lived in today.

He said "These are people with an excellent work ethic and fully marketable and useful skills, who have from another 15 to 25 years left in the labor force. They have families to support NOW. They have household expenses NOW. They haven't done a thing wrong except to become politically and socially irrelevant. Maybe by the time they can retire or die, we will all be replaced by robots, but that time isn't NOW"

Unfortunately that conundrum is the reality of funding. Sometimes, no matter how worthy or timely the cause, it doesn't resonate with grantors.

That reality will eventually impact your results, so getting a handle on a solution will definitely affect your future.

The answer is to either pursue a shift in your own focus or seek out new funding streams and new supporters, and continue to educate the public on the value and relevance of your mission.

In the end, we designed a campaign to appeal directly to individual donors, utilizing both direct clothing donations and a crowdfunding appeal that ultimately raised enough money to meet goal. Longer term, the NPO is seeking to develop relationships with new grantors.

If I can help you with funding solutions, drop me a line at rightwords@ida.net. 

Making your crowdfunding appeal work.

Crowdfunding is a nonprofit (and small business!) financing option that has generated a lot of interest, both here on this blog and throughout the internet. For nonprofits in particular, it can bridge the three-year development gap before you can hope to attract significant grant funding.

"Joel" responded to my last post on the subject in an email saying he had tried crowdfunding and hadn't even met his modest goal of $500. He mentioned that he posted it, checked back just before it was due to close and only had eighty-five dollars in contributions.

That points out the reality of any type of fundraising, especially crowdfunding.

As Joel found out, making crowdfunding actually work isn't as easy as it sounds. One well-known site reports that less than 10% of the campaigns it hosts actually meet goal. Others report success rates of up to 55%. None report 100% success. Success isn't a sure thing.

Crowdfunding isn't a passive exercise.

To put it as simply as possible, your crowdfunding appeals are investor presentations. Small businesses tend to get the idea of presenting value for money, nonprofits not so much. This is especially difficult because the real value for donors is not quantifiable in dollars and cents.

Think about how you invite people to a party. Would you just tack a post-it note to your front door and expect to have a fabulous turnout?

A fully functional fundraising strategy is pretty much a necessity for success. That includes the usual elements of PR and marketing you would use if you were planning an in-person event. If you are just starting out and looking for seed money, you will need to do a whale of a sales job to convince donors of your legitimacy, so strong board bios, program descriptions, goals and supporter profiles are recommended.

Some sites allow, or even insist on promotional videos, but if they don't you might consider presenting a short (1-2 minutes max) video on your website or on YouTube or other social media and link to it in your appeal. They don't need to be professionally produced, but they do need to be relative to your appeal. You also need to have a link in the appeal to your website or at least your Facebook page.

Organize your campaign for success.

While businesses can offer a share of tangible profits and a return on investment, nonprofits (and here I mean 501(c)(3) organizations, not L3C's) are not able to do so, since all the money raised (less processing fees) has to go to fulfilling or supporting their missions. Since donors still have to be engaged, or to put it bluntly, enticed to contribute, another strategy is needed.

That is often done through the use of rewards. Those might be as simple as a nice thank-you email,  involve  merchandise like a blanket or cap, or  something more personal, like a photo-op with the board or a prominent supporter. That can mean forming alliances with business supporters who will donate merchandise or services such as printing. Use larger prizes for larger donations. Just be sure the rewards don't violate any IRS rules. You need to secure this support before starting your campaign.

Another pitfall for any crowdfunding hopeful is lack of understanding about how the process works. On one level it's still a sales pitch, but you still  need to create an emotional connection so that people will stick around long enough to actually donate. Having a strong statement of need is critical, so create that in advance. Have a concrete goal for the funds. General appeals with unspecified uses for the money don't do as well.

The truly nice thing about crowdfunding is that unlike a lot of grant applications, you can inject some emotion into the picture. Don't be shy about appealing to people's emotions. If you say "people are hungry" try to have some pictures or first-person stories that illustrate the problem available.

You need to have a strong network.

People you don't know don't just roll out of bed in the morning and say "I think I'll troll the web and find someone to give money to," and they certainly aren't going to put your name in the search terms.

Your network, i.e. your existing supporters and contacts have to help you get the word out as well as being your first donors. If you've ever been to an auction, you know that everybody sits on their hands until the first bid. You need people to start the ball rolling by getting a few donations posted. Also like an auction, most of your support will probably come in the last few days, provided that you really push for the support. Don't give up on the campaign too early.

If you have three people following you on Facebook, that's probably not going to get the job done. Somebody has to email, like, or tweet the message every day to people who will then do the same thing. You may have to use traditional advertising methods like flyers or ads to drive traffic to the campaign. Ask, ask again, and keep asking. This is grassroots networking at its finest.

You need to have good basics.

Some sites require that you  present a formal presentation to the website before they will even list you. That means you will need things like a business plan, program descriptions and a budget. Others require that you are able to respond to inquiries with those documents. Most, if not all the sites require that if you advertise you are a nonprofit, you have the paperwork to prove it.

A web presence is pretty much mandatory. You should have a website where people can get some in-depth knowledge of your mission and competency. A social media presence such as Facebook, or any of the other platforms can substitute, but if you are looking for really big dollars (and that's mid-five figures or more in this world) people are going to check you out. Be sure to add a link to your campaign and the start and end dates in any online copy or email blasts. Don't make prospective donors hunt for the crowdfunding site – they won't do it.

Read all the fine print.

Reputable crowdfunding sites will have a fully detailed terms and conditions section. Find out how much of the money you actually get, how and when it is transmitted, whether you have to meet minimum goals to get the money and what guarantees the site offers to assure that if your goals are not met, the money is returned to the donors. Find out if there are any limits on how often you can post a campaign. Look for reviews or complaints online.

Be realistic.

Your goal needs to be realistic for the phase you are in now. If you are new, asking for a million dollars isn't reasonable, and it guarantees that you won't meet your goal. If you are established, and have a good track record to show that you use donor money well, then you can be more ambitious. Crowdfunding can and has reported campaigns raising well over $100,000.

Crowdfunding might be the answer to surviving that period between initial start-up and the point at which you can compete for grants, but it isn't a simple, easy process. Before you click "sign me up",  do your homework.

Wondering if your crowdfunding campaign measures up?  Drop me a line at rightwords@ida.net if you would like an inexpensive review.