Funder Pitch for Growth or Capacity Capital

There is a fairly new concept in the nonprofit world that has the power to completely transform the sector. “Philanthropic equity” (or “capital”) is just a fancy term for the money many nonprofit organizations desperately need.

Philanthropic equity is a one-time infusion of significant money that can be used to strengthen or grow a nonprofit organization. It can be money that grows a successful program to other clients, other cities, other regions. Or it can be money that strengthens the organization and makes it more sustainable.

But before you can understand philanthropic equity properly, you must understand a critical distinction about money. There are two kinds of money:

• Revenue is the day-to-day money required to run programs. For a homeless shelter, revenue buys meals, beds, sheets, job training programs, staff time.
• Capital is the one-time infusion of money that builds or grows an organization. Again for a homeless shelter, capital could purchase a better system for gathering data on clients, a donor database, a Development Director.

Social Velocity helps a nonprofit translate their growth or strategic plan into a pitch for capital. The steps to create a capital pitch and prospect strategy are:

1. Create a compelling argument for why the nonprofit needs capital, including:
• The opportunity
• The solution
• The plan
• Capital required
• Projected social return on investment
2. Break the capital required into investment amounts
3. Create a list of potential funders
4. Set up a system for cultivating prospects

If a nonprofit that provides a solution to a social problem was no longer impeded by a lack of capital, it could be revolutionary. We’d no longer see great programs wither on the vine. The best and the brightest ideas could travel all over the country, indeed, all over the world. All it takes is the right kind of money, invested in the right place at the right time, and the solution can take off.

With a capital pitch and prospect list in hand, a nonprofit is ready to go out and secure funding to build their organization.

To learn more about what Social Velocity’s process for raising capital looks like, you can read the Charlotte Chamber Music or Heart House case studies.

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