Social Velocity » fundraising planning

Moving From Fundraising to Financing

Nell Edgington — Wed, 24 Apr 2013 13:05:54 +0000

I’ve had a lot of great questions about the upcoming Financing Not Fundraising E-Course for nonprofit leaders. So I created a video that breaks the e-course down and explains exactly how it will work.

The Financing Not Fundraising E-Course is an excellent opportunity for nonprofits stuck in the starvation cycle to figure out what they can do to more effectively raise money and then create a plan for a more sustainable financial engine. The registration fee is per organization, so if you would like your executive director, development director and a board member, for example, to participate, they all can for one fee. You will just simply appoint one person as representative of the organization to participate in the coaching calls, and the others are free to “listen in” and help you with each step along the way.

The total time commitment over the course of two months is approximately 10-15 hours, which includes the webinars, coaching calls, Google Hangouts and homework assignments.

This E-Course is truly an investment in the future of your organization. By making the investment of the time and cost you will transform the money engine of your organization and recoup that investment many, many times over.

Watch the video below (or click here) to learn more. And if you have additional questions about the E-course, don’t hesitate to send me an email at nell@socialvelocity.net.

Register for the Financing Not Fundraising E-Course here

I hope you can join us!

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.

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Overcoming the Loneliness of the Nonprofit Leader

Nell Edgington — Wed, 30 Jan 2013 14:22:13 +0000

Being the leader of a nonprofit can be incredibly lonely. You have a million demands on your time, countless people to keep happy, ambitious (if not impossible) goals to achieve, and few resources with which to achieve them. It can be an overwhelming place to be.

But it doesn’t have to be that way. I have found that if a nonprofit leader has someone to confide their challenges and concerns, strategize solutions, brainstorm new approaches, and hear about alternative options they can emerge with greater confidence, inspiration and energy.

I believe there is a tremendous need for this kind of coach for the leaders of the nonprofit sector. That is why I’ve begun offering nonprofit staff coaching services.

I coach executive directors to:

Create a more effective, engaged board of directors
Structure your staff to better meet your goals
Implement and monitor your strategic plan
Establish or strengthen key external relationships
Better communicate with and engage staff
Develop dashboards for reporting progress to board and funders
Raise growth or capacity capital
And much more

And I coach development directors (and executive directors who also wear the development director hat) to:

Create an effective annual financing plan
Launch a major donor campaign
Engage your board in fundraising
Use social media to recruit donors
Develop compelling fundraising letters, proposals and materials
Streamline donor cultivation and stewardship
Develop more efficient and effective back-end fundraising systems
And much more

I provide phone, email, and in-person coaching to nonprofit staff to help gain new perspective, try new ideas, get unstuck and move their organization forward. You can download the Coaching one sheet here.

The duration and price of coaching depends on the level of counsel your staff needs. You can purchase a package of coaching hours to use over a month, several months, or a year. The more hours you purchase, the lower the hourly coaching rate. Coaching prices range from $250 for a single hour of coaching to $10,000+ for 50+ hours of coaching.

If you want to see Social Velocity Coaching in action read the A Community for Education or the UT School of Law case studies.

And if you’d like to schedule a free consultation to learn more about how coaching might work for your nonprofit, email info@socialvelocity.net.

Photo Credit: JPtHart

The 5 Building Blocks of Nonprofit Success

Nell Edgington — Wed, 19 Dec 2012 14:24:04 +0000

There is a way off of the exhausting nonprofit hamster wheel of trying to do more and more with less and less. If your nonprofit can articulate the value you provide, strengthen your organization, develop a groundbreaking board, chart a strategic direction, and attract more support, you will set yourself up to achieve the holy grail of the nonprofit sector: lasting change to a social problem.

It’s a process where your nonprofit assembles 5 building blocks that each build on the next one:

Articulate Your Nonprofit’s Value
It is no longer enough for nonprofits to do “good work.” Funders, policy makers, board members, and others are increasingly demanding that nonprofits explain what value they provide a community and what change they exist to create.

Strengthen Your Organization
Once you know your value, you must build your organization. Nonprofits can no longer scrape by without the staff, infrastructure, technology and systems they need to deliver results-driven programs. They must create a plan to strengthen their organization and raise capacity capital to implement it.

Develop a Groundbreaking Board
A strong organization requires a groundbreaking board to lead it. A nonprofit’s board of directors is absolutely critical. Without their leadership, investment and excitement it will be impossible to build community support and create change. A groundbreaking board provides strategic direction, brings money in the door, connects the organization to key decision makers and ultimately leads the organization to success.

Chart a Strategic Direction
But without a clear future direction a nonprofit is living in the world of just doing good work. A nonprofit that puts together a thoughtful, comprehensive plan for the future will attract more support, increase staff and board investment, and ultimately create more social change.

Attract More Support
Once these four elements are in place, a nonprofit is ready to attract more support. In an increasingly competitive funding environment it is more important than ever that nonprofits develop a long-term financing plan for their organization. A plan that determines how the organization will bring enough money in the door to achieve their mission.

These 5 elements build on each other and, once assembled, look like this:

The consulting services I provide are tailored to assist nonprofits wherever they are in this process. From developing a theory of change, to raising capacity capital, to revamping the board, to creating a strategic plan, to developing a financing plan. I help nonprofits make the leap from just getting by to creating sustainable social impact.

In order to help you determine where you are in this process and where you need help, we have organized the Consulting page of the Social Velocity website by this 5-stage process.

But there are also nonprofits that are so new or so small that they simply aren’t ready for outside help. Over the past two years I’ve been developing a whole suite of tools for these smaller, younger nonprofits. The e-books, webinars, and step-by-step guides on our Tools page all fit into this 5-stage process as well. So you can determine where you are in the process and what you need in order to move forward.

I hope you will explore the revamped Consulting and Tools pages of the website. And let me know if you have questions.

Photo Credit: Trey Ratcliff

New Financing Not Fundraising 2012 E-Book

Nell Edgington — Wed, 12 Dec 2012 13:05:37 +0000

I’m delighted to announce that I’ve just released the Financing Not Fundraising, 2012 E-book. This e-book is the second in the Financing Not Fundraising e-book series. While the Financing Not Fundraising, 2011 E-book laid out the basic elements of the Financing Not Fundraising approach, this new e-book, a compilation and expansion of blog posts in the Financing Not Fundraising blog series from 2012, goes deeper into the concept.

We are living in a new reality. And the old rules of nonprofit funding simply no longer apply. Those nonprofits that take a big step back and create a smart strategy for bringing enough money in the door to achieve their mission are the ones that will survive and thrive in this new environment. In creating that strategy they are moving to finance, instead of fundraise for, their organizations. And the result is a stronger, more effective, more sustainable organization with excited, energized, empowered board, staff and donors.

The 25-page Financing Not Fundraising, 2012 E-book expands on the basic elements of the Financing Not Fundraising model and helps those nonprofits that are ready to start moving away from fundraising to really dive into this new approach.

Here are the elements in this second level of Financing Not Fundraising:

Stop Fearing Money
Connect Money to Your Strategic Plan
Fix Your Fundraising Plan
Jump Start Your Board
Align Executive and Development Directors
Get Real With Your Donors
Abandon Ineffective Fundraisers
Kiss That Endowment Dream Goodbye
Reinvent the Capital Campaign

You can download Financing Not Fundraising, 2012 here and if you missed the Financing Not Fundraising, 2011 e-book you can download it here.

How to Calculate the Cost of Fundraising

Nell Edgington — Fri, 14 Sep 2012 14:28:31 +0000

There is an analysis I wish every nonprofit leader would do which could transform how the sector is financed. If more nonprofit leaders took a step back and calculated the cost of fundraising, in all the various ways that they raise money, they could focus their efforts on the most effective activities. And stop pursuing things that exhaust their board and staff.

If nonprofit leaders understood the net revenue and cost to raise a dollar of every fundraising activity they engage in they could answer questions like:

How much does that gala really get us?
How effective is our direct mail campaign?
How does it compare with our email campaign?
Would it make sense to cancel our annual event and hire a major donor fundraiser instead?
Should we keep writing that government grant?

The Social Velocity recorded webinar “Financing Not Fundraising: Calculating the Cost of Fundraising” will help you answer these (and more) questions.

I asked for audience participation prior to the webinars. When people registered for this webinar, I asked them to submit some numbers from one of their past fundraising activities (an event, a direct mail piece, a foundation grant) so that I could calculate the fundraising costs of a couple of participants during the webinar.

Financing Not Fundraising: Calculating the Cost of Fundraising Webinar
Recorded
Download Now

This webinar will help you:

Calculate the return on investment of all your revenue-generating activities
Give you the net revenue raised and cost to raise a dollar formulas you need
Analyze which are effective fundraising activities and which are not
Articulate to board and staff why this analysis is important
Provide case studies of other nonprofit ROI calculations
Give you a process for analyzing and making decisions about all of your fundraising activities
Help you deal with the politics of abandoning poor performing activities

All webinar registrants receive:

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

Download Now

Photo Credit: loco’s photos

Is Earned Income Right for Your Nonprofit?

Nell Edgington — Wed, 09 May 2012 14:28:31 +0000

Earned income, or the sale of goods and services, is a somewhat misunderstood and unexplored financial opportunity for nonprofits. Yet there are countless examples of nonprofit organizations that sell goods or services to supplement their revenue, like the Girl Scouts, Goodwill, museum gift shops, hospitals, charter schools.

If you’ve ever wondered if earned income might be an opportunity for your nonprofit to raise unrestricted revenue, download our “Evaluating Earned Income” webinar. 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
Recorded

The registration fee will get you:

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

Download Now

And if you missed last month’s sold out Raising Capacity Capital webinar, we are did repeat of that webinar. 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
Recorded

Download Now

Photo Credit: www.girlscouts.org

Financing Not Fundraising: Calculating the Cost of Fundraising

Nell Edgington — Mon, 06 Jun 2011 16:56:09 +0000

In part 9 of our ongoing blog series, Financing Not Fundraising, we are discussing the importance of calculating the return on investment of every revenue-generating activity your nonprofit undertakes. This can be fairly easily understood through two basic, but critical analyses: net revenue raised and cost to raise a dollar. If these two calculations were applied to every money-making effort a nonprofit engages in, organizations could quickly determine which are the most effective activities and scarce resources could be more profitably allocated accordingly.

If you are new to this ongoing series, our Financing Not Fundraising series argues that fundraising holds the nonprofit sector back by keeping nonprofits in the starvation cycle of trying to do more and more with less and less. To overcome this, nonprofits have to break out of the narrow view that traditional FUNDRAISING (individual donor appeals, events, foundation grants) will completely fund all of their activities. Instead, they must create a broader approach to securing the overall FINANCING necessary to create social change. You can read the entire series here.

There are two simple, and related, calculations necessary to determine the effectiveness of a nonprofit’s revenue-generating activities. The first is net revenue. NET revenue is so much more informative than GROSS revenue. Gross revenue is the total of all money brought in because of a fundraising activity (a direct mail appeal, a gala, a foundation grant, a major gifts campaign). But that figure is meaningless until you understand what it COST you to bring that money in the door. These costs are both DIRECT (the materials required for the activity, the staff that worked directly on the activity) and INDIRECT (volunteer hours, overhead staff time). You only really know how much money you made once you subtract the costs to make it. Thus,

Net Revenue = Gross Revenue – Fundraising Costs (Direct and Indirect)

Let me give you an example. Let’s pretend that a nonprofit organization with a $500,000 annual budget throws an annual gala with a band, catering, and an auction. One staff member spends half their time getting the event together, and a board committee helps sell tables and provides oversight. At the end of the event the organization grosses $100,000. They are thrilled that they have made 20% of their annual budget in one night, right? Wrong.

That’s only the gross revenue. What is the net revenue of this gala, i.e. what did it cost them to raise that money? The direct expenses for the event (the band, venue, food, decorations, invitations, etc.) cost them $50,000.

Direct Expenses = $50,000

But they also need to factor in the indirect expenses. Their event coordinator spent half a year preparing for this event. Their Executive Director attended meetings, made phone calls to invite people, and came to the event. The Development Director worked on the event. And the board committee put in many hours planning, marketing, and attending the event. So if we calculate the hourly rate of those staff member’s time (salary and benefits) and multiplied it by the hours they each worked, we’d get the cost of their time. We also need to do the same for board members. We can use the standard value of volunteer hours ($20.25) multiplied by the number of board members who worked on the event and the average number of hours they spent. If we add all of this up we get:

Event Coordinator = $15,000
Executive Director = $4,000
Development Director = $5,000
Board Members = $3,000
Total = $27,000

So the total costs of the gala were:

$50,000 (direct expenses) + $27,000 (indirect expenses) = $77,000

And, the net revenue on this event was:

$100,000 (gross revenue) – $77,000 (direct and indirect costs) = $23,000

Which brings me to the second critical calculation: cost to raise a dollar. How much did it cost the organization to raise that $23,000?

Cost to Raise $1.00 = Costs (Direct and Indirect) / Net Revenue

$77,000 / $23,000 = $3.35

So it cost this organization $3.35 to raise $1.00. That’s not an attractive return is it?

Although this organization actually made money, the cost of making that money is far larger than the money they made. And how does the cost of making this money compare to their other fundraising activities?

Well, let’s take another example. Pretend this organization hires a major gift officer at a salary of $65,000 per year plus benefits. Her salary and benefits are the direct costs. The indirect costs could include: the Executive Director’s and board members’ time to go on donor and prospect visits, creation of materials, and the sending of thank you letters. The total for these direct and indirect costs would be $100,000. Say that this major gift officer raises $500,000 per year in major gifts.So the net revenue would be:

$500,000 (gross revenue) – $100,000 (direct and indirect costs) = $400,000 Net Revenue

And the cost to raise a dollar would be:

$100,000 (direct and indirect costs) / $400,000 (net revenue) = $0.25

So it takes $0.25 to raise $1.00. That’s a dramatically better return on investment than the gala that cost $3.35 to raise $1.00 above, isn’t it?

I encourage you to run the numbers on your own fundraising activities and then compare. How does your net revenue and cost to raise a dollar compare across activities? Which are the most effective fundraising activities? What if you poured more effort and resources into the higher net activities? More money would contribute to your bottomline, meaning more money to spend on the social impact you want to create.

That could be transformative.

If you want to learn more about calculating the costs of fundraising, download our Financing Not Fundraising: Calculating the Costs of Fundraising webinar, or download the 27-page Financing Not Fundraising e-book.

Photo Credit: sykez

Social Velocity » fundraising planning

Moving From Fundraising to Financing

Register for the Financing Not Fundraising E-Course here

Overcoming the Loneliness of the Nonprofit Leader

The 5 Building Blocks of Nonprofit Success

New Financing Not Fundraising 2012 E-Book

How to Calculate the Cost of Fundraising

Financing Not Fundraising: Calculating the Cost of Fundraising Webinar Recorded Download Now

Is Earned Income Right for Your Nonprofit?

Financing Not Fundraising: Calculating the Cost of Fundraising

Financing Not Fundraising: Calculating the Cost of Fundraising Webinar
Recorded
Download Now