Financing Not Fundraising Webinar Series

Because of the popularity of the past two Financing Not Fundraising overview webinars in October and November, I’ve decided to launch a webinar series that breaks the Financing Not Fundraising concept into its various parts and expands on how to approach each element.

I will kick off this new webinar series in January with a new webinar each month. Some of the webinar topics will be:

• Creating a Financing Plan
• Finding Individual Donors
• Developing a Message of Social Impact
• Raising Capacity Capital
• Evaluating Earned Income
• Calculating the Cost of Fundraising
• Moving from Push to Pull
• Getting Your Board to Raise Money

If you want to find out when those webinars get scheduled in the new year, sign up for our the Social Velocity e-newsletter.

But in the meantime, if you want to get up to speed on the overall concept of Financing Not Fundraising, I’m doing one more overview Financing Not Fundraising webinar on December 6th.

This webinar, based on our popular Financing Not Fundraising ongoing blog series will show nonprofits what a broader approach to securing the overall financing necessary to create social change looks like, including:

• How to align your nonprofit’s mission with the money needed to deliver on it
• Why a message of impact results in more money
• Understanding the critical difference between revenue and capital
• Why overhead isn’t a dirty word anymore
• How and why to calculate the net revenue of money raising activities
• When to explore new revenue streams

If you’ve been following the Social Velocity Financing Not Fundraising blog series and you want to learn more, or if the series has brought up some burning questions that you’d like to have answered, join us for this interactive webinar.

If your staff, your board, and your donors are worn out, rest assured, there is a better way. Join this webinar to find out how. I hope to see you there!

Financing Not Fundraising: Rethinking How Nonprofits Bring Money in the Door
Tuesday, December 6, 2011
12:00 PM – 1:00 PM (Eastern Time)
$40.00
Register Now

Tags: board fundraising, capacity capital, financing not fundraising, individual donors, nonprofit earned income, nonprofit fundraising, philanthropic equity, social impact

Financing Not Fundraising E-Book

I’m delighted to announce that, by popular demand, we are releasing today the Financing Not Fundraising, 2011 e-book. This 27-page e-book is a compilation and expansion on the 11 blog posts from 2011 in the Social Velocity Financing Not Fundraising blog series.

In the midst of an incredibly challenging economic situation that is not getting better any time soon, the Financing Not Fundraising, 2011 e-book outlines a new vision for how the nonprofit sector gets funded. Fundraising in its current form just doesn’t work anymore. Indeed, traditional fundraising is holding the sector back by keeping nonprofits in the starvation cycle of trying to do more and more with less and less.

What the sector needs is a financing strategy not a fundraising strategy. 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, nonprofits must work to create a broader approach to securing the overall FINANCING necessary to create social change.

This 27-page e-book is a compilation and expansion of the Social Velocity blog series Financing Not Fundraising from 2011. The blog series is ongoing, with new posts added throughout each year. We’ll begin adding new posts to the series in the new year, but in the meantime, this e-book captures and expands on the posts from 2011 in one place.

The 12 chapters of the Financing Not Fundraising, 2011 e-book are:

1. What is Financing Not Fundraising?
2. Create A Financial Strategy
3. Align Money and Mission
4. Find Individual Donors
5. Develop a Message of Impact
6. Raise Money for Building Capacity
7. Explore New Types of Money
8. Evaluate Earned Income
9. Calculate Net Revenue
10. Move From Push to Pull
11. Stop Lying to Donors
12. Getting Started

You can download the Financing Not Fundraising, 2011 e-book here.

If you want to learn more about how to apply the concepts of Financing Not Fundraising to your nonprofit, check out our Financing Not Fundraising Webinar Series

Tags: earned income, financing not fundraising, individual donors, nonprofit capacity, nonprofit fundraising, nonprofit growth capital, nonprofit strategic plan, Philanthropy

What Nonprofits Can Learn From Netflix

Even if you aren’t a subscriber to Netflix (the DVD and online streaming video service) you have probably heard about how their bad decisions have cost them thousands of customers in recent months. Although a nonprofit might seem worlds apart from Netflix, there is still much to be learned from their debacle.

Unlike for-profit companies that have only one customer group, nonprofits actually have two. First are those customers to whom nonprofits provide services — their clients. For a homeless shelter these “customers” are their homeless clients. Their second customer group is those who pay for the services — their funders. So for nonprofits, customer management is much more complex. I would argue that nonprofits generally do a good job of understanding and taking care of their client customers. But their second customer group, funders, can sometimes get lost in the shuffle.

Which makes the lessons from Netflix even more important. Here’s what Netflix teaches us about taking care of your supporters:

Listen to Your Supporters
Netflix assumed that their customers were so in love with their services that a 60% price hike wouldn’t phase them. When customers flooded the Netflix blog and took to Twitter to complain, Netflix largely ignored their customer’s anger. Then Netflix was  shocked when customers started leaving in droves. Organizations make mistakes and will at times irritate their customers, the trick is to listen to your customers and quickly correct any missteps. This is particularly important now that social media is so prevalent and is often the first place people go to vent about an organization. Listen to your funders, volunteers, supporters and other community advocates wherever they are and respond to their feedback, concerns, ideas. Don’t build walls around your nonprofit and ignore the outside world. Meet people where they are talking about you and listen and engage in a conversation with them.

Understand How Your Supporters Tick
It’s not enough, however, to simply listen to your customers, you have to understand what they want and need. Netflix assumed that separating DVD rentals from online video streaming was no big deal to customers. Boy were they wrong. The introduction of Qwikster, a separate DVD-only service from Netflix, threw an already angered customer base into a tailspin. Netflix failed to understand how their customers operate. Having two separate websites, two separate passwords and two separate queues for movies was completely untenable to their customers. As a nonprofit you have to understand how your supporters operate and what makes them tick. What about your mission and programs appeals to your supporters? How do they want to be involved? Invest some time in getting to know your donors, volunteers, board members, friends, advocates and what makes them passionate about your nonprofit, how best to engage them, what they’d like to do to support the cause, and how to make it easy for them to do so.

Acknowledge That Your Supporters Ultimately Run Your Business
Netflix forgot that their customers run their business. Without customers, there is no Netflix. Similarly for nonprofits, you may like to think that you exist solely to achieve your mission, but you have no mission without a way to fund it. You cannot separate your mission from how you financially support it. You need to take a step back and understand what types of funding and funders your mission would appeal to (Is your organization a good sell to individuals? Is there an opportunity for school or other government contracts? Is earned income an option?) and then develop a plan for going after and sustaining those funders.

Figure Out a Viable Business Model
Netflix used to have a very viable, profitable business model. But movie studios have realized that there is more money to be made in content, so their financial demands on Netflix have increased dramatically. Which pushed Netflix to increase customer prices. Now Netflix’s business model is out of whack. I’m not a media content expert, so I have no idea what a viable business model is for Netflix, but I don’t think they do either. The trick is to figure out how to get revenue and expenses to create a net positive. For nonprofits, the same is true. Funders will be more likely to support a viable entity with a bright future. Get your financial house in order by aligning your mission with a way to bring sustainable money in the door and funders will be more likely to support you.

Netflix’s missteps have almost been painful to watch. But watch we must if we are going to learn how to avoid their pitfalls. Whether you run a for-profit or nonprofit organization, you must be ever-cognizant of your customers and constantly work to fully integrate them into a successful, viable financial model.

Tags: individual donors, Netflix, nonprofit earned income, nonprofit funders, nonprofit fundraising, nonprofit strategy, Philanthropy

We Should Expect More From Nonprofit Donors

Many of the ills of the nonprofit sector can and should be solved by educating and strengthening nonprofit leaders, staffs and boards, but there is also work to be done with nonprofit donors. Those private individuals, foundations and corporations that support the nonprofit sector also need to change their approach if nonprofits are ever going to emerge from the starvation cycle.

There are some key things nonprofit donors need to do differently in order to make their gifts go farther:

• If you want something, fund it. Over and over again a foundation or individual donor will tell a nonprofit that they want to see a program evaluation, or a strategic plan, or a stronger financial model, but they refuse to fund it. This automatically puts a nonprofit 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 and no donor should put a nonprofit in that position.




• Invest in a management team you believe in, then back off. Foundations in particular tend to attach unnecessary strings (endless reporting requirements, benchmarks) to the grants they make. In theory, these strings exist in order to ensure a good investment. But in reality, the only way results will happen is if there is a great plan and a talented team to execute on it. If you are worried about a nonprofit’s ability to execute, then you probably aren’t comfortable with an investment in that team. Either invest elsewhere, or back off and let them perform.




• Don’t expect big things from a little gift. Donors sometimes get a big head about the gifts they make. They expect a nonprofit to expand a $1 million program with a $5,000 gift, or create a brand new program from one donor’s one-year investment. Those are ridiculous, and possibly hubris-filled, expectations. You get what you pay for. Invest accordingly.




• Understand that you hold the power and use it benevolently. Because you are writing the checks, you have the power in this funder/fundee relationship. A nonprofit leader will never be able to be completely open and honest with you for fear that you will take your money elsewhere. Recognize that fact. Don’t put undue pressure on the organization, don’t ask for special favors, and be as hands-off as possible.




• Don’t just buy services, build organizations. It might seem more exciting to have all your gifts go to support direct services, but realize that those services will be stronger and more sustainable if there is a healthy, effective organization behind them. That means a nonprofit needs a capable, well-trained and paid staff; adequate equipment, systems and space; and efficient technology. Occasionally think about supporting those infrastructure items so that your program gifts can go even further.




• Get others to give. If you are a philanthropist, chances are you know other philanthropists. Share your knowledge of the great management teams and infrastructure gifts you make. Don’t invest in a vacuum. Actively recruit your friends and colleagues to build on your investments.

If we really want to change the nonprofit sector we have to change the donors who support it. It is no longer enough just to write a check and be done with it. If you really care about the organizations you support, you’ve got to step up and make more thoughtful, necessary, smarter investments.

Photo Credit: HikingArtist.com

Tags: changing donors, corporate donors, educating donors, foundation giving, individual donors, more effective nonprofits, nonprofit donors, nonprofit starvation cycle, Philanthropy

Breaking Free of the Fundraising Handcuffs

If you’ve been a fan of our popular, ongoing blog series, Financing Not Fundraising, you’ll want to participate in our upcoming Financing Not Fundraising webinar. The webinar will give you the tactical steps for breaking free of the unrelenting fundraisng handcuffs and bringing more money in the door.

Fundraising in the nonprofit sector doesn’t work anymore. In fact, traditional fundraising is holding the sector back by keeping nonprofits in the starvation cycle of trying to do more and more with less and less. What nonprofits need is a financing strategy, not a fundraising strategy. That means that 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, nonprofits must work to create a broader approach to securing the overall FINANCING necessary to create social change.

This webinar will show nonprofits what this financing approach looks like, including:

• How to align your nonprofit’s mission with the money needed to deliver on it
• Why a message of impact results in more money
• How to understand the critical difference between revenue and capital
• Why overhead isn’t a dirty word anymore
• How and why to calculate the net revenue of money raising activities
• When to explore new revenue streams

If your staff, your board, and your donors are worn out, if you’ve been following the Social Velocity Financing Not Fundraising blog series and you want to learn more, or if you want to put this new approach in motion, join us for this interactive webinar.

I hope to see you there!

Financing Not Fundraising Live Webinar

Tags: calculating costs of fundraising, earned income, financing not fundraising, Fundraising, fundraising plan, individual donors, nonprofit fundraising strategy, nonprofit overhead

How Do You Convince Donors to Give?

Convincing a donor to give to your nonprofit is a tricky business, and it’s getting harder all the time. Now more than ever nonprofits are struggling for funding amid growing competition and decreasing available dollars. It has become harder and harder to stand out and recruit donors. These days, donors, especially major ones, are less likely to give because an organization “does good work” and more likely to give because an organization provides a solution to a social problem the donor cares about.

Which is why every nonprofit needs a compelling Case for Support. Our newest Social Velocity Step-by-Step Guide, helps you create your nonprofit’s Case for Support.

This new environment requires those nonprofits that want to continue to attract and grow philanthropic support create a compelling argument for why a donor should give to them. Driven by a thoughtful combination of data and emotion, a good Case for Support can help you communicate and connect with your target donors much more effectively.

Our Case for Support Guide is organized into the 8 sections of a Case for Support:

1. The Community Need
2. Our Solution
3. Why Us
4. Our Impact
5. Financial Model
6. Strategic Direction
7. Resources Required
8. Social Return on Investment

In each section of the guide there is a series of questions. Your answers to these questions become the basis of your final Case for Support. But your Case for Support cannot be written in just a day, by one or two people. You will need to get feedback and insight from staff and board. And you’ll need to gather data to make your Case for Support stronger. This work will take time, so it may be a few weeks or months before you have a final Case for Support that is compelling, convincing and agreed upon by the organization as a whole.

A good Case for Support is an increasingly critical part of any fundraising campaign. You must be clear about why someone should give to your organization. Because if you don’t know, how will they?

Photo Credit: puzzledmonkey

Tags: Board of Directors, community need, convincing donors to give, individual donors, major donor campaign, nonprofit case for support, nonprofit competition, nonprofit fundraising, Philanthropy, recruit donors, social return on investment

Financing Not Fundraising: Finding Individual Donors

In part four of our ongoing Financing Not Fundraising blog series, we are focusing on the most untapped, greatest sustainable funding opportunity facing the nonprofit sector. Individual donor dollars make up 80% of the private money entering the nonprofit sector each year, compared to 5% from corporate dollars and 12% from foundation dollars. Yet many nonprofit organizations don’t know how to effectively embrace the full opportunity of that market.

Here are five steps to get you started:

1. Move Beyond Direct Mail. While direct mail used to be the only way to find individuals willing to support your cause, there are now many additional channels you must explore to stay relevant (email, blogs, Facebook, Twitter, etc). Beth Kanter and Allison Fine’s new book The Networked Nonprofit makes a fundamental argument about how nonprofit organizations can use social media to leverage people outside of the organization (donors, volunteers, supporters) to build momentum (resources, funds, mind-share, advocacy, etc) for their cause. If nonprofits more effectively used social media to build their networks, individual donor fundraising could be revolutionized.




2. Don’t Separate Donors From Other Supporters. Just as fundraising is often sequestered from the program work of the organization, funders are also often kept separate from other organization supporters.  Volunteers are often left off funding appeals for fear of asking them to do “one more thing” for the organization. And funders are not asked to become volunteers or advocates. Instead of putting organization supporters into silos, open all opportunities to everyone. Better yet, ask (or allow) supporters to create their own ways to accelerate the work of the organization (like tapping into their own networks to help). Once integrated, the possibilities for building support are endless.




3. Stop Fearing the Major Donor. Many nonprofit organizations would love to have major individual gifts coming in the door, but don’t know how to find and solicit those donors. The process, once understood, is actually pretty simple. You must identify, qualify, cultivate, solicit and, most importantly, steward donors. Use your board, volunteers, supporters to help identify and qualify people who meet three criteria: 1) belief in the organization’s cause 2)connection to a person at the organization 3)personal capacity to give at your major donor level. Once board, friends, supporters are involved in a well-defined process, major donors are sure to follow.




4. Get Your Board Focused. Boards of Directors are often misused in fundraising. They serve on event committees, write grants, make cold calls, or seal envelopes. Instead of using them for these low ROI activities, give them one fundraising job and one job only: to help move major donors through the cycle outlined above. Even if board members don’t have networks of wealthy friends, there is still much they can do to help raise major donor dollars. Board members can help identify major donor prospects, uncover information about potential prospects, invite prospects to a cultivation event, go on a major donor call, send thank you notes or make phone calls. The board is a key part of your organization’s network, put them to their highest and best use.




5. Do Away With the Pity Ask. To effectively raise money from individual donors, especially major donors, you have to move away from the pity donation and toward the investment opportunity. Donations and investments differ in every aspect:
   And investment opportunities are not only for the major donor. Even your smallest donor can be made to understand the broader impact of the organization’s work, how important their dollar is, and what the return on investment can be.

Individuals are able and want to do so much more. If nonprofits more effectively seized opportunities to engage and invest individuals, the sector could become more sustainable and better able to create change.

If you want to learn more about how to apply the concepts of Financing Not Fundraising to your nonprofit, check out our Financing Not Fundraising Webinar Series.

To download the 27-page Financing Not Fundraising e-book, click here.

Tags: Allison Fine, Beth Kanter, financing not fundraising, individual donors, major donor fundraising, nonprofit board of directors, nonprofit fundraising, The Networked Nonprofit