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Home » Capacity Capital » Overcome Nonprofit Scarcity With Capacity Funding

October 9, 2020 By Nell Edgington Leave a Comment

Overcome Nonprofit Scarcity With Capacity Funding

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I was talking to a nonprofit leader earlier this week who was unknowingly torturing herself. One part of her had a big vision for growing her nonprofit to reach more people and create change to a broken system. But another part of her felt stuck because she lacked so many things to make that big vision possible (money, people, influence). Her big vision was being stifled by her belief in nonprofit scarcity. And so she was stuck in a very uncomfortable limbo.

It’s awful. I know because I’ve been there too.

But here’s the thing. You actually have the power to break free from that limbo. You can choose to toss aside the “I don’t have enough” reality of nonprofit scarcity you are currently in, and reach instead for the “I can achieve what I want” reality.

And you do that through these 5 steps:

Step 1: List What You Need

For some, this is new board members, a full-time assistant, additional program or fundraising staff, new technology or systems. For others, it’s a strategic advisor or coach who can help you sift through all of your options and needs. But the key is to be brutally honest with yourself about what you lack and what would fill that lack.

Step 2: Determine The Costs

Do some research about how much each of the things on your list of needs would cost and over what timeframe. Recruiting new board members might include the cost of networking events, lunches with prospects, etc. A full-time assistant would be the market rate salary for the first 1-2 years (because after that, an assistant will more than pay for himself in your ability to spend more time networking, fundraising, board building). You can determine the cost for new technology and systems with web research, and for strategic advising through free consultations with providers.

Step 3: Create a Capacity Capital Prospect List

Make a list of 6-10 people you could go to for the funding (called Capacity Capital) to cover these costs. These people should meet two criteria: 1) they already know you and your work, and (even better) they have provided funding or time to your efforts in the past, and 2) they have the ability to write a check for 20% of the funding needed in Step 2. I said 20% because no single person or entity has to foot the entire bill, this will be a team effort. And don’t discount people who have never given you that much before; if they’ve given that amount to any entity at any time in the past they are a prospect.

Step 4: Set up Meetings

Send emails to your list of 6-10 people asking them for a 30-minute call to discuss some ideas you have about moving toward your big vision. Articulate that big vision in a sentence or two, and (if possible) in a way that gives you goosebumps. Because if you are energized and excited about the big vision, that’s infectious. Then say, “Would you have 30 minutes sometime in the next couple of weeks to talk about this opportunity in more detail?” And don’t give up easily — resend the email to anyone you haven’t heard back from after a week.

Step 5: Pitch Your Prospects

Prior to each call, visualize the prospect writing you a check and being very excited about your vision. Then lead the calls like this:

  • Thank them for their time.
  • Describe your big vision and how exciting it is. 
  • Briefly list some of the elements you need to make this big vision a reality.
  • Explain that to make your big vision happen you need capacity capital in the amount from Step 2 above. 
  • Then ask them, “Would you consider being one of a small handful of funders that will provide this capacity funding, by contributing $XX (20% of your total capacity funding)?”
  • Then BE QUIET and wait for their response. This is the hardest step. But you must remain still and let them fully respond.
  • They will answer one of three ways:
    • Yes!
    • Maybe (which means Yes, but they need you to help them overcome their questions/concerns)
    • No (which is fine, don’t take it as a rejection, just thank them for their time and move on to the next prospect).

So don’t stay stuck in the torture of having a big vision for growth, but suffering from lack. You have the power to move into a new reality where you have all the money, people, and influence you require to realize your social change goals.

There’s a lot more about how to move from nonprofit scarcity to abundance in my upcoming book, Reinventing Social Change, out February 2021. To get book previews, pre-sale announcements, and other exciting offers related to the book, make sure to join the Social Velocity e-list here (and you’ll get a bonus free guide).

And if strategic advising is on your list of needs above, let’s talk.

Photo Credit: Luca Upper

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Filed Under: Capacity Capital Tagged With: abundance, capacity capital, Fundraising, nonprofit, nonprofit leadership, nonprofit scarcity, Philanthropy, scarcity thinking, social change

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