If you have a burning question that you would like answered, fill out the form here. And you can read past blog posts in the Reader Questions series here.

This month’s question comes from a nonprofit leader in Hong Kong. But his question is universal:

Dear Nell,

Congratulations on this great idea! Also for the excellent training given by your Webinars. I have one question–I am working in Hong Kong in a charity. Our goal is to organize a fundraising office here. As you may know, Hong Kong is a place where most of the people speak Cantonese. I speak English, and my staff is very limited–we are two. We are trying to develop our major donor program but it is quite difficult for us to expand and grow our portfolio of major donors. Any advice about how to expand our major donor list?

Thank you for your answer.

Yvan Castro

Yvan,

This is a great question and one on the minds of many, if not most, nonprofit leaders. Major donors can sometimes seem to be the holy grail of the nonprofit world. In order to expand your major donor list, you need a network of more than just you and your fellow staff member. The first place to look is your board. If correctly trained and successfully integrated into an overall major donor process, the board can instantly expand your network, your knowledge base and your ability to secure major gifts. And especially in your case, they can expand your ability to reach beyond your own language and cultural networks.

There are several steps to finding major donors for your organization.

1. Define a Major Gift. Your organization’s major donor level completely depends on the size and capacity of your current donor base. A major gift for a nonprofit is a level at which you have a few donors, so it’s not outside the realm of possibility, but most of your donors reside below that level.




2. Create a Goal. Once you have defined a major donor level you need to develop a major donor goal. How much are you currently raising at and above the major donor level you have just defined? What level of investment are you willing to put into this effort (additional staff, materials, database, etc)? Given that investment how much do you think you can grow those major donor gifts in this first year?




3. Break the Goal into Pieces. If you want to raise, say $100,000 from major gifts in the first year, you need to determine how those gifts will come in. You should get a lead gift of 10-20% of the goal, so your lead gift would be say $15,000. And then develop gift amounts at each levels below that, $10,000, $5,000, $2,500 and so on. You determine how many prospects to ask by the rule of thumb that it takes 4 asks to get a yes.




4. Create a Prospect List. Prospects must meet 2-3 of the three “C”s: 1)The Capacity to give a gift at or above your major donor level 2) A Concern, or interest in your mission and 3) A Connection to someone at the organization. So don’t just put together a list of anybody and everybody, work with your board, friends, other donors to the organization, staff, volunteers to brainstorm names of people who fit 2 or 3 of these criteria.




5. Begin to Cultivate. Once you have a list of people who meet 2 or 3 of the Cs, start to get to know them and let them get to know you and your organization’s work. Invite them for a tour, a meet-and-greet, a friend raiser. Start to develop a relationship.




6. Make a Compelling Ask. When you think they are ready, make an in-person, specific ask in an amount that you think is right for them, for a project that fits with their interests. Make sure that you have a compelling case for investment that you draw upon in order to convince a major donor prospect to invest.

If you want to learn more about finding individual donors, register for our June webinar.

Securing major gifts doesn’t have to be so hard, even for a very small staff. As long as you have a broader network of people willing to be involved, a compelling case for investment, and a systematic process for moving prospects to donors, you can find major donors. Good luck!

Photo Credit: Mykl Roventine

About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

Follow me on Twitter | Find us on Facebook | Sign up for our E-Newsletter

Related posts:

1. How to Find Individual Major Donors
2. How to Find Individual Donors
3. Reader Question: How to Create a Budget for Nonprofit Growth

You can read past interviews in our Social Innovation Interview Series here.

Nell: ArtsFwd is about encouraging and profiling innovation in the arts. But innovation is such a loaded and overused word, what does it mean to ArtsFwd and what do you think is true innovation?

Karina: Innovation is definitely a buzzy word, so we try to be careful about how we use it. ArtsFwd is a project of EmcArts, a non-profit that works with arts organizations across the country to strengthen their adaptive capacities and advance the practice of innovation. So we’re primarily concerned with organizational innovation, which EmcArts has defined as instances of organizational change that: 1) result from a shift in underlying assumptions, 2) are discontinuous from previous practices, and 3) provide new pathways to creating public value.

So we’re not talking about creativity, which is more of an individual pursuit, or inspiration, which is about a momentary spark. The stories we tell on ArtsFwd are about organizations working to build their capacity to adapt to a rapidly shifting environment through the process of innovation, which requires a cross-functional team working together over a sustained period of time to develop, test, and optimize genuinely new approaches.

Nell: Why do you think innovation is particularly important in the arts world and why now?

Karina: In the past 10 years, unprecedented changes in our operating environment have placed radical new demands on our arts organizations. We’re seeing changes in patterns of public participation, technological access to the arts, generational and demographic shifts, new forms of resource development, and many more factors. Now more than ever, it’s apparent that the “muscles” arts leaders exercise to promote organizational stability need to be balanced by equally strong muscles around adaptive capacity. We believe that organizations can build those muscles, and an ultimately an organizational culture that is intrinsically flexible and responsive, by in investing in incubating innovation.

While a few training opportunities exist to support adaptive change, like those offered by EmcArts’ Innovation Labs and New Pathways for the Arts programs, the nonprofit cultural field lacked an arena for timely, field-wide conversation and peer-to-peer learning around these new practices. In order to pick up on the remarkably innovative work underway in some organizations, so that individual examples of success can become new norms in the field, there was an urgent need for a field-wide learning platform. In response to this need, EmcArts created ArtsFwd a place for arts leaders to learn from each other about building adaptive capacity and the power of effective innovation.

Nell: What are some of the most innovative things you’ve seen in the arts?

Karina: I love the story of how the Yerba Buena Center for the Arts (YBCA) in San Francisco transformed their visitor experience from “come, look, leave” to “immersive.” There’s a lot of discussion right now about how the arts sector can move from thinking about audiences as passively receptive to actively engaged, and I think YBCA is at the bleeding edge of this work. They’ve changed the museum’s hours, handed curatorial duties over to junior staff, redesigned their website around big ideas instead of logistics, and started a new personalized arts education program called YBCA:You. Check out our short documentary and written profile about how they did it .

The Wooster Group’s Video Dailies Blog is a great example of putting technology to work to build audiences in a way that is genuine to the artistic core of the organization. I think that’s really hard to do. The Wooster Group had to rethink their assumptions about organizational structure by inviting the entire staff to participate in a lateral way in the creation of a daily short video that truly blurs the line between marketing and art. Check out their profile on ArtsFwd.

One that we haven’t covered on ArtsFwd is the Portland Museum of Art’s Object Stories. With this project, they invited visitors to bring a personally meaningful object with them into a booth at the museum and record a story about it. The booth took a series of pictures and creates an audio slideshow, which became part of an exhibit at the museum and an online gallery. It’s a beautiful example of creating an authentically participatory experience that spans the divide between visitor and creator.

Nell: People often say that when economic times are hard charitable dollars to the arts are the first to go because the arts are more “expendable” than social services and other more basic needs. How do you respond to that idea?

Karina: I’m (obviously) predisposed to think that defunding the arts is a great way to shoot ourselves collectively in the foot. But what I find really exciting right now is that we’re seeing a lot of innovative arts groups partnering with social service and urban development organizations to improve their communities. The arts have always been a part of making our communities (and lives) livable, so it’s inspiring to see the connection between arts and direct services forged more deeply.

For example, on ArtsFwd we’re following what’s happening at Adventure Stage Chicago, a theater organization that was created within the Northwestern University Settlement House (NUSH), a century old social service provider, as they join forces to incorporate the arts into social services delivery. Artful practices are being integrated in NUSH’s Head Start program, summer camps for kids, and adult programs, including their food bank, and senior program. Anyone who receives services was invited to co-create a new theater piece about “home,” which was performed in the Adventure Stage auditorium in Spanish, the native language for most of the community. We have a multimedia profile about their process premiering on ArtsFwd in our Innovation Stories section. Stay tuned!

Also, there’s a lot of talk about placemaking happening right now, and I’m encouraged to see the arts taking a vital role in that conversation. For example, Springboard for the Arts in Minneapolis is working on a project called Irrigate, which is an artist-led creative placemaking initiative that will help turn the six miles surrounding a new light rail under construction in an underdeveloped and undervalued part of Saint Paul into a welcoming place. The project brings together infrastructure development, a diverse community, and artists in a cross-sector collaboration.

Nell: Arts organizations in particular have struggled because of increasing competition for an audience’s time. How do you think the arts can overcome those trends? And are some areas of the arts better positioned to overcome it?

Karina: What I’m seeing in the arts sector right now is a shift from thinking about the abundance of new technologies and channels for entertainments as competition, to thinking about them as opportunities for cooperation. After all, the NEA’s Survey of Public Participation in the Arts indicated that 74% of Americans are engaging with arts, yet only 35% are doing so through professional “benchmark” arts organizations. There’s a huge territory of interest to cultivate, if we can find ways of connecting and engaging.

Nina Simon is doing great work in this area right now and writing about it with refreshing openness on her blog Museum 2.0. For example, she experimented with having a puzzle, unrelated to the artistic work, in the galleries to engage visitors for a long period of time, though not directly with the art. She was testing the idea that by bringing potentially “competing” activities into the gallery you increase the length of time someone is in a artful environment and therefore the chances that they will have a meaningful experience with the art. There was some interesting push back on that experiment from artists, which you can read about here.

This in the same vein, City Lights Theater Company in San Jose is experimenting with Tweet Seats, or seats where audience members are encouraged to tweet, which defuses the competition for attention while also generating publicity for the show. If you can’t fight ‘em, make ‘em work for you, right?

Nell: The Nonprofit Finance Fund is in the process of a pretty interesting “Change Capital for the Arts” project where they are helping arts organizations raise capital to revamp their organizations. What do you think about the concept of change capital and do you see more arts organizations going after it?

Karina: We’re encouraged by this move from old capitalization, i.e big endowment campaigns, to more frequent injections of smaller amounts of capital to bridge the inevitable gap between prototyping and the sustainability of a new strategy.

We certainly see a hunger for this kind of “risk” or “change” capital in the organizations applying to our Innovation Labs, which is why we provide a $40,000 grant for prototyping during the program. This kind of seed money helps managers resist the pressure to monetize or fossilize new programs too soon, giving them the breathing space for innovations to grow and embrace a culture of adaptive capacity. Note: the deadline for Round 2 of the Innovation Lab for Museums is May 15th.

I was encouraged to hear Ken Foster, Executive Director of Yerba Buena Center for the Arts talk eloquently in this ArtsFwd podcast about setting up a $200,000 fund within the organization’s annual budget to encourage innovation and risk. Throughout the year, any staff member can apply to the fund with an innovative idea. All they need a champion from senior staff (not necessarily from their own department) and to fill out a short application. Small grants are awarded in a rolling basis.

This kind of change capital is the money we need a lot of right now. The failure of funders to provide it is one of the reasons why innovation has not had a larger impact on the field.

About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

Follow me on Twitter | Find us on Facebook | Sign up for our E-Newsletter

Related posts:

1. A New Kind of Money for the Arts: An Interview with Rebecca Thomas
2. Real Innovation in Social Change Lies in Reinvention
3. A Monster List of Social Innovation Books, Blogs, Conferences, Funders

If you’ve ever wondered if earned income might be an opportunity for your nonprofit to raise unrestricted revenue, join us for our “Evaluating Earned Income” webinar on May 23rd. This webinar is part of our ongoing Financing Not Fundraising webinar series that shows nonprofits how to create a more sustainable financial engine for their organization.

Earned income is not right for every nonprofit, but every nonprofit should at the very least analyze whether earned income is a potential opportunity.

This webinar will help nonprofit leaders:

• Understand what earned income is and when it is most successful
• Learn about other nonprofits and their earned income businesses
• Evaluate whether earned income is a possibility for their organization
• Determine if their organization is ready to explore earned income
• Understand the steps in launching an earned income stream

Evaluating Earned Income Webinar
Wednesday, May 23, 2012
12 noon – 1:00pm Eastern

The registration fee will get you:

• Access to the live, interactive webinar
• A link to a recording of the webinar, which you can watch as many times as you like
• The PowerPoint slides from the webinar
• The ability to ask additional follow-up questions after the webinar

Register Now

And if you missed last month’s sold out Raising Capacity Capital webinar, we are doing a live repeat of that webinar on Tuesday, May 15th. Capacity capital is the money that every nonprofit needs, but most find so hard to raise. Capacity capital can help your nonprofit to:

• Hire a development director
• Launch an earned-income stream
• Expand your programs
• Evaluate your impact
• Train your staff

It is money for infrastructure and organization building. If you want to move your organization out of the starvation cycle, you have to learn how to raise capacity capital.

The Raising Capacity Capital webinar will show you how to:

• Talk about the importance of capacity capital to your donors and board
• Create a budget for the capacity dollars you need
• Break the goal into donor ask amounts
• Identify prospective donors
• Give your board a role in the campaign
• Gain the confidence to start asking for the money you really need

Raising Capacity Capital Webinar
Tuesday, May 15, 2012
12 noon – 1:00pm Eastern

Register Now

I hope to see you at one of these upcoming webinars!

Photo Credit: www.girlscouts.org

About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

Follow me on Twitter | Find us on Facebook | Sign up for our E-Newsletter

No related posts.

Below are my ten picks of the best reads in social innovation in April, but as always, please add what I missed in the comments. If you want to see other things that caught my eye, follow me on Twitter, Facebook, LinkedIn or Pinterest. And if you want to read 10 Great Reads lists from past months, go here.

1. The Nonprofit Finance Fund released their annual State of the Nonprofit Sector survey results, which are always fascinating, but this time they included a really cool Survey Analyzer Tool.




2. On the Harvard Business Review blog Mark Bonchek discusses 3 steps to “create a gravitational field that attracts customers into orbit around your brand.” These steps apply to nonprofit and social entrepreneurs hoping to build support for their cause as well.




3. In a really interesting post, Ami Dar, Executive Director of Idealist, argues that we need to change the language of social change in order to convince “real people” to get involved.




4. Writing in FastCompany, Alexa Clay and Kyra Phillips, compare street gangs to Google to prove that the idea that innovation comes from the top down is a misconception.




5. In Governance in the 21st Century, Lucy Bernholz describes a new kind of public accountability that nonprofit and foundation boards must embrace. They must recognize that “the days of “broadcast” and “isolation” are over and structure themselves accordingly.”




6. David Brooks wrote a piece in the New York Times arguing that social entrepreneurs are too idealistic (when he has in the past been very supportive of social entrepreneurship). But Echoing Green and Dowser quickly came to social entrepreneurship’s defense.




7. On the New Philanthropy Capital blog, Matilda Macduff breaks the sometimes overwhelming impact measurement (evaluation) puzzle down into easy, concrete steps for small nonprofits. This is really helpful.




8. Katya Andreson lays out 4 Trends that Should Shake up Nonprofit Marketing, but I’d take it even further and say that these 4 things should shake up how nonprofits do business overall.




9. There is something interesting going on at the intersection of nonprofits and public policy. Robert Egger launched CForward earlier this year to be a public voice for the nonprofit sector. At the same time, Congress is working to further limit nonprofit advocacy rights. Gary Bass and Mark Rosenman strike back with a scathing editorial in the Chronicle of Philanthropy.




10. Writing on the HealthAffairs Grant Watch blog Tom David lays out a wish list for how foundations could dramatically shift to become much more effective.

Photo Credit: takomabibelot

About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

Follow me on Twitter | Find us on Facebook | Sign up for our E-Newsletter

Related posts:

1. 10 Great Social Innovation Reads: March 2012
2. 10 Great Social Innovation Reads: February 2012
3. 10 Great Social Innovation Reads: January 2012

Well, funding follows social change momentum. If you lack money it is  merely a symptom of a larger lack of momentum. To create social change it is not enough to be a single person with an idea, or even a single person with an idea and a group of friends.

You need to put some key pieces together to create real social change momentum:

A Significant Problem
It is not enough that you and your friends care deeply about some social ill. It needs to be a problem that is significant enough to get those outside of your world interested. It has to be a problem that a larger group cares about and sees a need to solve. And in order to get there you need to break the problem down. Who has a vested interest in people in Africa getting clean water, or unemployed youth getting jobs, or inner city kids learning to read? Segment the market and think about the kinds of people you need to get on board with your solution. Then go after them.

A Proven Solution
And you have to offer a real solution. Ideas are great, but people don’t invest in ideas, at least not since the dot com bust. You have to stop talking about how great things will be and start piloting the idea. Until you have some results to point to (like changed lives) it will be hard for people to take you seriously. I’m not suggesting that you need a comprehensive evaluation study. But you do need to move beyond “Let me tell you this great idea I have” to some concrete demonstration that the solution you are suggesting has actually worked somewhere and for someone.

A Compelling Case
You must craft your solution and the significant need it addresses into a compelling story. Your passion, enthusiasm and commitment need to be contagious. Some people are born with a natural charisma, and I’ve seen many social entrepreneurs who have it. They believe so strongly in what they are doing and tell such a compelling story that those around them can’t help but join the cause. But if that doesn’t come naturally to you, you still have to figure out a way to break out of the “but it’s so obvious that people should just automatically get it,” and learn how to create a story that convinces people to join.

A Diverse Group
Finally, but most importantly, it has to be more than just you and your friends. Momentum comes from building a committed army of supporters with diversity of experience and networks. While the Occupy movement has some strength in numbers it remains to be seen whether it will actually result in any significant change. This is partly because the movement has not broken through to networks beyond the young and disenfranchised. Until they can get people within the “establishment” to really take them seriously and become as passionate as they are about the ideas behind the movement, I don’t know if they will get any traction.

Passion is an absolutely critical ingredient to creating social change, but it will only get you so far. To build real momentum, and the funding to survive and thrive, you need to assemble a diverse network of supporters who believe in your solution and are committed to seeing it grow.

Photo Credit: ccpixel.net

About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

Follow me on Twitter | Find us on Facebook | Sign up for our E-Newsletter

Related posts:

1. Real Innovation in Social Change Lies in Reinvention
2. A Monster List of Social Innovation Books, Blogs, Conferences, Funders
3. 10 Great Social Innovation Reads: February 2012

I started Social Velocity almost four years ago because I saw a real hole in the nonprofit sector. Small and medium nonprofits working on social change lacked access to expertise and resources to strengthen and grow their solutions. The Teach for Americas of the world were building impressive organizations and replicating their solution far and wide. But they were doing so with the help of deep networks of experts and money. They were the lucky ones.

But there are equally impressive solutions housed in much smaller, less resourced nonprofit organizations that aren’t really seeing the light of day.  Because these organizations don’t know how to put a growth plan together, figure out how to finance the impact they want to have, or create a compelling ask for money to build, their solutions are not reaching as far as they could.

Social Velocity exists to help those small and medium-size nonprofits who want to be entrepreneurial, grow their programs, get their board engaged and invested, raise money to build their organization, break out of the starvation cycle.

And there are some nonprofits that are so small or so new that they aren’t ready yet for a customized solution. So our tools are there to help them start creating momentum on their own.

Our Step-by-Step Guides help a nonprofit to:

• Create a theory of change, which is the fundamental backbone of any nonprofit effort to get more strategic and garner more external support.
• Develop a case for support, a clear, well-articulated, compelling argument for why a donor should give to your nonprofit.
• Craft a sustainable revenue plan, that lays out how enough, sustainable money will flow through your doors to support your mission.
• Create a business plan for an earned income venture to result in new, unrestricted revenue for your nonprofit.

And the E-books we have developed describe:

• How to move from the exhausting hamster wheel of fundraising to a more strategic, sustainable effort to finance your nonprofit, and
• How to create a groundbreaking board of directors that can strengthen and grow your impact

And our Monthly Webinars describe how to find individual donors, evaluate earned income potential, create a message of impact, raise capacity capital and much more.

You can learn more about all of our tools here.

I’m committed to continuing to expand our inventory of tools so that more nonprofits can strengthen and grow their impact. So I’d love your ideas for other tools you would like to see.

Where do you struggle and where do you need guidance? Let me know the kinds of tools you would like to see in this post’s comments, on our Facebook page, or via Twitter or email.

Photo Credit: Andrew Morrell Photography

About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

Follow me on Twitter | Find us on Facebook | Sign up for our E-Newsletter

Related posts:

1. Changing the Nonprofit Sector
2. Could Philanthropic Equity Revolutionize the Nonprofit Sector?
3. Tools to Build Smaller Nonprofits

In case you are new to the series, it discusses how nonprofits must break out of the FUNDRAISING (individual donor appeals, events, foundation grants) box and instead create a broader, more strategic approach to securing the overall FINANCING necessary to create social change. You can read the entire series here.

I firmly believe that nonprofits should no longer sit idly by when donors make crazy demands or give impossible instructions. It is the responsibility of a strong nonprofit leader to stand up to their donors and help educate them about the realities of the sector.

So the next time one of your donors throws one of the below at you, here’s how you can respond:

When a donor says: “Don’t spend any of my money on fundraising or infrastructure.”

Respond with:

“It might seem more effective to have all of your gifts go to support direct services, but actually those services will be stronger and more sustainable if there is a healthy, effective organization behind them. That means our organization needs a capable, well-trained and paid staff; a sustainable revenue engine; adequate equipment, systems and space; and efficient technology. Occasionally you might think about supporting those infrastructure items so that your program gifts can go even further.”

When a donor says “I want to know exactly how every penny of my money was spent.”

Respond with:

“I hope that you are investing in our program and our management team because you believe ours is the right solution to this social problem, and we are the right team to execute on that solution. We will be happy to provide you, on a regular basis, results about how the program grows and the impact it achieves, but the kind of extensive, detailed, and funder-specific reporting that you are requiring would take us away from delivering the program and creating impact, and I know you don’t want to do that.”

When a donor says “I won’t fund your program without proven results, but I won’t fund an evaluation study.”

Respond with:

“When you say that you are putting our organization into a catch-22 of needing a key element to get funding, but not having the funding to get the key element. It’s an unwinnable situation. We would love to be able to demonstrate the kind of results you are requesting. However, we have not yet identified a donor or group of donors who is willing to fund that kind of project. Would you be willing to lead an effort to get a small group of funders together to fund such an important evaluation study?”

When a donor says “I want your nonprofit to make huge changes from my $10,000 gift.”

Respond with:

“We agree that the change you would like to see is very exciting. We have done our research on the type of change you would like to see and it would cost approximately $100,000 [insert the correct figure] to bring to fruition. Is $100,000 a gift you would like to make to our organization? If not, would you be willing to identify a group of funders who could join you to fund this change? And if not, then we would gratefully accept your $10,000 gift to support our regular program operations.”

We have to create the nonprofit donors we want to see in the world. When a donor makes an unrealistic demand, use it as an opportunity to educate them about the reality of the nonprofits they support. In so doing, you are creating a better donor for the whole sector.

If you want to learn more about how to move your nonprofit from fundraising to financing, check out our ongoing Financing Not Fundraising Webinar Series and our Financing Not Fundraising e-book.

Photo Credit: lovell.com

About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

Follow me on Twitter | Find us on Facebook | Sign up for our E-Newsletter

Related posts:

1. Upcoming Financing not Fundraising Webinar: Creating a Message of Impact
2. Changing the Nonprofit Sector
3. Financing Not Fundraising E-Book

Capacity capital is the money that every nonprofit needs, but most find so hard to raise. Capacity capital can help your nonprofit to:

• Hire a development director
• Launch an earned-income stream
• Expand your programs
• Evaluate your impact
• Train your staff

It is money for infrastructure and organization building. If you want to move your organization out of the starvation cycle, you have to learn how to raise capacity capital.

I have worked with a number of small to medium sized nonprofits to create a pitch for capital to strengthen revenue functions, grow programs and otherwise build organizations.

Let me give you an example.

Elaine Spallone, executive director of Charlotte Chamber Music, felt that they were stuck. As a small, but beloved arts organization they had a great product, but they couldn’t get beyond the vicious cycle of never having enough money, never being able to expand their presence and impact. They had a solid board, and a great vision for the future, but lacked philanthropic equity to build the organization to achieve that vision.

I worked with Elaine and her board to create a long-term strategic vision, a plan to get there, and a funding pitch for capital to build the organization. You can read the on-going case study about this work to raise philanthropic equity at a small nonprofit here. Charlotte Chamber Music is now actively raising capacity capital, and it’s very exciting.

It’s incredibly powerful to think about the implications of this concept for the entire nonprofit sector. 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.

If you are interested in raising capital for your nonprofit, the “Raising Capacity Capital” webinar will show you how to:

• Talk about the importance of capacity capital to your donors and board
• Create a budget for the capacity dollars you need
• Develop a campaign goal
• Break the goal into donor ask amounts
• Identify prospective donors
• Give your board a role in the campaign
• Gain the confidence to start asking for the money you really need

UPDATE: Because the April webinar sold out, we are adding a live repeat of the webinar on Tuesday, May 15th.

Raising Capacity Capital Webinar Details:
Tuesday, May 15, 2012
12 noon – 1:00pm Eastern
Price: $40

The registration fee will get you:

• Access to the live, interactive webinar
• The ability to ask questions and listen to other participants questions during the webinar
• A link to a recording of the webinar, which you can watch as many times as you like
• The PowerPoint slides from the webinar
• The ability to ask additional follow-up questions after the webinar

About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

Follow me on Twitter | Find us on Facebook | Sign up for our E-Newsletter

Related posts:

1. Financing Not Fundraising Webinar Series
2. Changing the Nonprofit Sector
3. Ways to Raise Money in a Recession

You can read past interviews in our Social Innovation Interview Series here.

Nell: Your book, The Future of Nonprofits, came out almost a year ago. Has anything changed in your view of what the future holds for the nonprofit sector?

David: Not yet. I think if anything in the past year we are seeing the rise of more and more tools (Gowalla dying off, Pinterest interest rising) but nonprofits are still too obsessed with the tools and not the higher level tactics behind them. Much less concentrating on the objectives and goals that go above the strategy. I hope that starts to change in 2012.

Nell: SXSW Interactive just wrapped up, what is on the cutting edge of technology innovation for social change? What got you really excited?

David: To be honest what got me excited was the privacy push we saw at SXSW. The rise of the informed public as to what brand and nonprofits are doing with their data, who they are sharing it with and how’s it being used. For too long I think the average nonprofit constituent has just written a check or donated online and then not worried about what’s happened with their data. Hopefully more and more nonprofits will re-think their privacy policies just as Google and Pinterest have done.

Nell: Innovation has become quite a buzz word in the nonprofit sector lately. What does it mean to you and what makes an “innovative” nonprofit?

David: Most nonprofits think of themselves as innovative when they simply add a new program or tool to their arsenal. This is the same as when GM calls a new car “innovative” because it has a new cup holder. KONY2012 was not innovative. It was a great cause-driven film that had a clear message to 1) help spread the word about Kony 2) to drive revenue and sales of the awareness items for invisible children. Innovative nonprofits are those out there trying new ideas that go beyond advertising or new programs. When I think innovative I think of the ground breaking campaigns that Stacey Monk at Epic Change is creating.

Nell: You spent 9 years at the American Cancer Society working on their online initiatives. Often it is difficult to bring innovation and new technology to the largest nonprofits. How were you able to innovate within such an organization? And what tips do you have for other “intrapreneurs” working to bring innovations to large nonprofits?

David: Luckily the American Cancer Society had an innovation system in place. One that helped foster new ideas, kill bad ones, and re-direct mediocre ones. We called this the Future and Innovation Center and I was lucky enough to twice receive a grant to create and build new ideas out of this center. Randal Moss (my co-author) was at the helm of leading this center within the American Cancer Society and did an amazing job at funneling new and good ideas into real world products. My tip for other “intrapreneurs” is create the system for them to work in. Take what you learn from our book and create your own internal innovation center at your brand or nonprofit. It’s not hard. We promise. And we are here to help you!

Nell: You’ve recently moved over to the for-profit world, helping companies to employ smart social media strategies. How did you decide to move to the private sector and how do you stay engaged with social change efforts?

David: Good question. I was recruited away from running my own consulting business by the amazing folks at Ant’s Eye View. And was offered a position and challenge that I couldn’t pass up being a sherpa for large companies in their own social and customer experience journeys. It was a no-brainer for me to come and work with some of the smartest people I’ve ever known in this space. I still keep my head in the game of social change by being the CEO of Lights. Camera. Help., which is a nonprofit organization that is dedicated to encouraging other nonprofit and cause-driven organizations to use film and video to tell their stories. We do this through our education and volunteer match programs, screenings and an annual film festival.

About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

Follow me on Twitter | Find us on Facebook | Sign up for our E-Newsletter

Related posts:

1. Taking the Nonprofit Leap Into Social Media
2. 10 Great Social Innovation Reads: March 2012
3. The View from an “Old” Social Enterprise: An Interview with Jim Gibbons

I love getting your questions, so if you have a question you’d like to see answered on the blog, send it to me at nell@socialvelocity.net, post it on the Social Velocity Facebook page, or send it to me via Twitter @nedgington.

Here’s Kelley’s question and my response.

Hi Nell,

How do you determine a good budget for your non-profit when you are just starting out and have no funding? Right now, I am writing a grant and the grant is requesting statistics on the capital necessary to reach growth goals for the next three years. This is in reference to scalability and opening new sites across the country. Thanks!

Kelley Nicoloff, Uteam4u, Inc.

Kelley,

Whether you are just starting a new organization or you are 20 years into it you always need a plan for the future with an integrated financial plan. Creating a budget is really step 2, so don’t skip the most important step 1, which is to create the overall strategy. If you are writing a grant that requires growth goals over the next 3 years you need an overall plan for the next 3 years of the organization. So before you write that grant request you need to develop a 3-year strategic plan, which will detail your growth goals as part of an overall organizational strategy.

The strategic plan should include:

• Long-Term Goals. A handful of broad goals you want to accomplish over the next 3 years. Typically, the goals break down into:
• 1-2 program, or mission-related, goals. This is where you determine how you want to grow, where and over what period.
• 1 funding goal that describes how much money it will take to make this growth a reality, this is directly related to your budget described below.
• 1-2 infrastructure-related goals that describe the marketing, technology, staffing, board necessary, this is where you will start to outline what capital improvements you will need for growth to happen.
• Objectives for Each Goal. You need to break each goal down into the steps required to get there.




• An Operational Plan. It’s not enough to have a general sense of the direction you want to go in, you need to make the plan completely operational: include activities, deliverables, people responsible, and timeline.




• A Budget. You need to figure out the costs for all of these goals (expenses) and how will you raise the money to meet those costs (revenue and capital). As part of this you need to create a capital budget for the one-time costs of building an organization ready for growth. Your final budget must be directly tied to the goals and objectives of your 3-year strategic plan.

If you follow these steps and come up with a 3-year strategic plan, not only will you have the “good budget” that you need for the grant proposal, but more importantly,  your nonprofit will have put together a measurable, actionable plan for the future. It won’t be just a hoop you had to jump through for this particular funder. You will have a real growth plan that you can feel confident you can actually bring to fruition.

If you want to learn more about creating a financing plan for your organization, check our Creating a Financing Plan webinar.

Photo Credit: Cellular Immunity

About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

Follow me on Twitter | Find us on Facebook | Sign up for our E-Newsletter

Related posts:

1. Reader Question: How to Find Major Donors
2. Changing the Nonprofit Sector
3. How to Raise Money to Strengthen Your Nonprofit