Can you guess what tech nonprofit entrepreneurs ask us about the MOST every single year? That’s right, nonprofit fundraising. Despite the fact that all startups – for-profit, nonprofit, and unintentionally nonprofit – must fundraise (sometimes forever) there’s still something about raising philanthropic dollars that sounds ultra intimidating. How do you work with corporations versus institutions versus family foundations? What’s the best way to orchestrate a cold pitch? What should you never, ever, ever do? These are questions we get all the time, and we’re here to answer them for you today.
Getting into your fundraising groove can be hard, which is why we ask seasoned funders to come speak with our Accelerator cohort year after year. The advice never gets old, and it always generates massive returns in nonprofit fundraising knowledge for our teams. This year we were lucky enough to have some of the biggest funders in New York come speak to our teams at BlackRock HQ, including BlackRock’s very own Claire Chamberlain, Managing Director of Social Impact, Open Society Foundation’s Senior Program Officer with the Democracy Fund, Erica Teasley Linnick, and Ford Foundation’s BUILD Program Officer, Victoria Dunning. Here’s what we learned about becoming a nonprofit fundraising pro.
Nonprofit Fundraising Advice: That’s Gonna Be A No…
Everyone’s got pet peeves, and funders are no exception. When you have founders pitching you everyday, you quickly identify the turnoffs. Claire, Victoria, and Erica were gracious enough to share theirs, so you don’t make those mistakes.
For Erica, it’s the reactionary pivots from organizations that are already established. She explained, “If you hear George Soros is doing something with Syrian refugees, don’t just pick something up related to Syrian refugees because you think OSF will be interested in it. Why switch from the great thing you were already doing?” Being responsive to what you think funders want won’t work. Don’t try to lobby them. Hone in on your actual mission, and find funders that are an organic fit.
When you’re in talks with a massive foundation, like Ford, transparency is key. “If you are talking to more than one person, reference that in conversations with others at a foundation, because it can get a little awkward. It’s in everyone’s best interests to be transparent,” Victoria shared. This is key for any funder you’re talking to. It’s okay to have multiple inroads at a foundation, but make that clear from the get-go so you don’t complicate internal communications and jeopardize your chances of funding.
Victoria also explained that despite the fact that Ford Foundation is huge and, “seems to have a ton of money to give, some of it is locked away for continuing grants to the organizations that are already grantees. It is somewhat rare to be able to take on new grantees because of how the money is put aside.” Just because an organization has the capacity to give X million dollars a year, doesn’t mean it hasn’t already been accounted for. She also notes, founders should, “calibrate expectations about what it actually means to meet with a funder.” A first meeting is just the beginning. Experienced funders want to get to know your work, the sector, and how you fit in.
Mission fit is key for Claire. “Make sure your program is a mission fit for the funder you are pitching. Be able to succinctly articulate what you’re doing and how you will measure if what you’re trying to do will make a difference.” No matter what stage, tech nonprofit founders should be able to explain why their work matters, and the potential for impact. Claire elaborates, “At a minimum explain what you will measure and why, and what fundable hypothesis you want my team to buy into. If any of that is not satisfied, that makes for a shorter conversation.”
Nonprofit Fundraising Advice: How Early Stage is Too Early Stage?
It’s no secret that it’s tough to be an early stage nonprofit. You have to build your product to prove your impact, but you need funding to build the product, and most funders won’t make a bet unless your impact is proven. Yep, our heads our spinning too.
Claire agrees, “Early stage can be the toughest because there isn’t a body of work to look at.” Without proven impact to analyze, she evaluates the leadership and conducts reference checks with trustworthy folks who can speak to the hypothesis or the leadership team’s potential. Pre-screens, like being a part of the Fast Forward cohort, help. But at the end of the day, it’s still a bet.
“It’s okay to fail,” Erica shared. “A lot of these things are experiments. Social impact and justice are not easy, and we don’t expect to give you this money and all of a sudden see that everyone has a house, a job, and healthcare.” What Erica looks for most in an early leader is vision.
Across the board, funders agree that the founding team is extremely influential in early funding. Large foundations like Ford do fund many established institutions, but they also make bets on emerging nonprofits. According to Victoria, “There are stepping stones, validators. Clarity of focus, combined with passion and determination. That’s something that really matters.”
Nonprofit Fundraising Advice: Beyond Leadership
You might not have proven impact yet, but that doesn’t mean you have nothing to show for yourself. Claire emphasized the importance of, “being able to articulate why the market has failed, and what you are doing differently that can create a new way forward.”
While leadership is hugely important for institutional funders, they also need to know they are investing in more than just one charismatic leader. Victoria’s advice on how to meet this need? “Find out how the community or your constituents can help tell your story. Bring someone to a meeting and ask them to share the difference your product made for them. Then they are making the case for you – it becomes very tangible.”
Nonprofit Fundraising Advice: Becoming “The One”
Courting funders can feel… a lot like getting from dating to marriage. Once you get in the door, you start wondering how you get from relationship building to becoming the organization they’re willing to make a long-term bet on. Victoria shared, “Some of it is luck and timing. A strategy shift, a grantee that drops.” It’s important to take a look at a funder’s portfolio and examine who else they are backing in your space. Maybe there is a bigger organization working on the same issue, but has a service gap that your product can fill. Starting a conversation around this with a funder can, “catalyze a funder’s own thinking about the missing piece.”
It’s also well worth considering when a funder’s fiscal year ends. Erica said that leftover money in particular portfolios allows her to make smaller test grants to nascent organizations.
But importantly, remember that strong relationships are built on trust and vulnerability. At Ford Foundation, Victoria looks for entrepreneurs who are honest about the struggles. “Being truly honest and authentic about the struggles is important to get that ‘marriage’ money that is longer term.”
Thanks again to Claire Chamberlain of BlackRock, Victoria Dunning of Ford Foundation, and Erica Teasley Linnick of Open Society Foundations for sharing their wisdom on nonprofit fundraising with the 2018 cohort. And a big thanks to our partner BlackRock for making this session possible!