1 Diverse Funding: The Key to Sustainability Mike Corbin, NNAAC (largely taken from a presentation by Gayle L. Gifford)

2 Agenda Our world New perspective Assess your situation Alternate revenue sources w/pros & cons Donor relations Grant seeking Fund development planning Sharing and questions throughout 2

3 Cause & Effect Inc. 3 Sustainability When funders talk about sustainability, they usually mean GET MONEY FROM SOMEONE ELSE There is no sustainable source of funding, every dollar must be re-earned every year.

4 Our World Has changed Is changing Will continue to change Core funding replaced by “a patchwork” of shorter-term sources 4

5 The New Day Don’t look for stability Develop the ability to “bounce forward” 5

6 Cause & Effect Inc. 6 Substitute “Financial Vibrancy” The capacity of an organization to transition from one sustainable moment to the next – Marilyn Struthers, Ontario Trillium Foundation

7 Cause & Effect Inc. 7 Sustainability, Vibrancy, Resilience NEW GOALS: Ability to change while staying effective and true to mission Maneuver through instability in an opportunistic and optimistic way. Fluidity to change organizational shape, build alliances and take up the opportunities of the moment” (M. Struthers) Diverse Funding

8 Struthers’ Capacity Vibrancy Themes Building relationships Financial management Evaluate and plan – find niche Communication Model to bring together mission, governance, culture and funding Nurture stakeholder participation 8

9 Build financial development forward What are strengths to build on? What makes sense to do next? What new resources will you need? 9

10 Cause & Effect Inc. 10 Assess what you need Total dollars – By category: e.g., membership, grants, government, special events Restricted vs. unrestricted Public or private How many donors? Major gifts? Members? Cash and in-kind?

11 Cause & Effect Inc. 11 What do you need the money for? Programs Buying and stewarding properties People to do things Maintaining an office Managing data Communicating with your constituents Raising money Other ____________?

12 Cause & Effect Inc. 12 How does your community benefit? Connect the money you need to the impact you want to have Help potential donors visualize the change you are trying to create Tell a powerful story

13 Cause & Effect Inc. 13 Why donors give To realize some change in the world To preserve something of value To feel good To be recognized, appreciated To create good will To realize tax benefit Because required by law Someone asked them!

14 Cause & Effect Inc. 14 Worksheet: Develop your Case for Support If you had more money, how would you spend it? In two paragraphs, how does the community benefit if your organization raises this money? – What does your community value? – Be clear, convincing and demonstrate a real, tangible benefit to the community?

15 Organization perspective: We need new furniture for our afterschool tutoring program because it is old and broken Community benefit: Hundreds of schoolchildren will become more successful students and contributing members of their community Case Example

16 Cause & Effect Inc. 16 Designing Income Growth

17 Cause & Effect Inc. 17 Six Sources of Revenues (seek a mix) Individuals Corporations/Businesses Private Foundations Government Fees for goods or services Income-producing assets, e.g., endowment

18 Cause & Effect Inc. 18 Breakdown of nonprofit revenues 38% from Dues, Fees, Charges 31% from Government Sources 20% from Philanthropy (individuals, foundations, businesses) 11% from Other (e.g., interest) Estimates, from Independent Sector, includes 501(c)3s and 501(c)4s

19 Cause & Effect Inc. 19 Individuals PROS Largest source of philanthropic dollars Most unrestricted Need less evidence and paperwork Can write a check “today” High ROI for face to face Relatively predictable Loyalty can be very high CONS People intensive Raising small gifts from many donors is time-consuming and expensive Requires programming of public appeal and engagement Won’t stay if you don’t engage & appreciate them

20 Cause & Effect Inc. 20 Corporations PROS Potential for large gifts Money from lots of pots – charitable, goods and services, royalties, contracts, advertising, sponsorships Often just people CONS Need to align with business interests Need to engage business leadership Usually avoid controversy and social advocacy Smallest source of nonprofit revenues

21 Cause & Effect Inc. 21 Foundation Grants PROS Most foundations are families – act like individuals Relatively high ROI Potential for large gifts Seed money for new programming Sometimes operating support CONS “Outcome” driven Time and project limited Usually restricted Highly competitive Not for lobbying Often lots of paperwork

22 Cause & Effect Inc. 22 Government PROS Same as foundations 2 nd largest source of nonprofit revenues Can be fee for service CONS Same as foundations Expect high level of sophistication in grant writing/reporting Lobbying and sometimes advocacy prohibited Cash flow

23 Cause & Effect Inc. 23 Fees for goods and services PROS Largest source of US nonprofit revenues Program contracts often from government No charitable intent required CONS Must align with mission May have tax implications Requires strong business planning and marketing investment Must be customer driven/competition Cash flow

24 Cause & Effect Inc. 24 Benefiting from the capacity of partners: the seventh revenue source Space People Goods & Services Expertise ____________

25 Cause & Effect Inc. 25 Worksheet How ready are you? What are our projected expenses? What are our target sources of revenue? How ready are we to meet potential donor needs?

26 Cause & Effect Inc. 26 Growth Basics  Stabilize Keep the donors & customers you already have Replace the donors you lose  Add New donors or customers More dollars per donor

27 Cause & Effect Inc. 27 Individual Donors or Members Appreciate the donors you have – Send timely, personal thank you – Give feedback on how their gift is making a difference – Provide appropriate and welcomed recognition Engage donor heads and hearts - cultivate – Keep your organization “top of mind” – Identify their goals – Create opportunities to get “cold and wet” – Communicate needs and how they can help – Tell compelling stories – Produce results

28 Cause & Effect Inc. 28 Grant seeking Build connections and relationships – Know who you are talking to – Cultivate, cultivate, cultivate – Target communications Identify donor value – Create newness new issues into existing program New audiences – Appeal to donor worldview – Bundle projects for maximum impact – Find hidden value

29 Cause & Effect Inc. 29 Grant seeking (continued) Demonstrate leadership – Know your stuff – Prove it – Be logical – Communicate like a leader Think ahead – Long range planning – Research funder opportunities – Anticipate problems or trends

30 Cause & Effect Inc. 30 Proposal selling points Speak the same language Establish compelling needs Prove it Focus on results Reference theory and best practices Gather strategic endorsements

31 Cause & Effect Inc. 31 Fund Development Plan Case for Support Individual cases as needed Target Audiences Goals and objectives Prospect research Strategies in – Cultivation – Solicitation – Stewardship Donor and gift management Calendar Budget Research and data analysis Benchmarks Evaluation Professional development

32 Sharing and Questions What works for you? What are your questions? 32

33 Cause & Effect Inc. 33 Cause & Effect Inc. can help you make a difference in the world by creating the internal change that will strengthen your governance, improve your programming, build stronger relationships with your constituencies, or boost your revenues. We’ll work with you on Board development and training, organizational development, strategic planning, group facilitation, public engagement, program development, organizational communications or fundraising. Contact us at: , or Gayle L. Gifford, ACFRE or Jonathan W. Howard