This is the first post in a three-part series on how to raise growth capital to scale your nonprofit.
There is a lot of talk these days about scaling nonprofits. Collective impact. Social innovation. Funder collaboratives. Buzzwords sound exciting, but how do they help you raise the capital you need to actually get to scale? How does a business plan lead to money? What do you actually need to go out and do? This three-part series seeks to add a practical voice to the conversation.
Too often I see nonprofit leaders with a good idea and a plan in hand, stumble when it comes to raising the growth capital. There are many reasons this happens. We will explore three, and the strategies to combat them: 1) the Lone Ranger Syndrome; 2) the Missing Board Syndrome; and 3) the Facts and Figures Overload Syndrome.
Part 1: The Lone Ranger Syndrome
Entrepreneur. Sharp. Started a nonprofit that is successfully addressing a critical need in the community and now he’s looking to take it to scale. With business plan in hand he’s out trying to grow the organization and raise the money, too… with limited success. It’s him against the world – he’s the Lone Ranger. Maybe you know this person.
Maybe it’s you.
When it comes to scaling impact, too many visionary CEOs with a plan to scale think they can raise the money all on their own. Fundraising, like barn-raising, takes a team. You need your Tonto.
Start by hiring a professional fundraising staff. You can’t afford to wait for your scaling initiative to take off to make these critical hires. The CEO needs to sell the big idea, with passion and conviction. Someone else has to write the proposals, make the follow-up calls, and prepare for the meetings. That is where you need your development team: to close the deal.
Build a team of fundraising professionals with a clear mandate: focus, almost exclusively, on helping to close funding requests, preparing the next round of prospects to solicit, and strategically building the pipeline of potential new funders. With a team in place as you get started, your scaling plan will have greater credibility with funders, and more potential for success.
Develop your fundraising strategy while you develop your growth strategy. “We will raise $5 million in growth capital” is not a fundraising strategy, although that is all the attention it gets in many scaling plans. The Lone Ranger may have a plan in mind, but fundraising success depends on a specific set of steps that are written down. Dedicate as much time to figuring out where those dollars will come from as you do to figuring out how many more people you will serve. If you do, you will raise the money you need.
Be specific about your fundraising strategy in your business plan. When working with your development team, answer these fundraising questions: how many individuals donors do we need, what size gifts, and at what pace? Do we have them today? If not, what will we need to invest to get there? Which foundations – name them – are a good fit, and what is the funding target? If there is an opportunity for corporate giving, which companies – name them – will we approach, and what is the timing to secure these gifts? Test your assumptions with your team, and be prepared to increase the investment needed in your fundraising engine.
Take a page from the best capital campaigns. Harvard wouldn’t set out to raise $100 million without the people or the plan, right?! Neither should you.
Coming in Part 2: The Missing Board Syndrome
Theresa Schieber is a strategist and the vice president and chief operating officer of The Whelan Group, a consultancy to nonprofits. She is recognized for her expertise in the areas of nonprofit growth strategy, governance, business planning, visioning, new market development and scaling social innovation.