In addition to the many things they are required to do to lead their organisations successfully, founders and CEOs have a primary responsibility—raising the money needed to fulfil their nonprofit’s vision and execute its strategy.
These resources can come from a diverse set of funders—CSR, domestic philanthropic foundations, high-net-worth individuals (HNIs), and, in many cases, international donors as well.
Intelehealth, the organisation I lead, has been fundraising since 2016. Through the years, we’ve cultivated a few practices that have optimised our fundraising process and ensured a degree of success in this function.
1. Pick the right mix of fundraising sources
Nonprofits have a varied mix of funding sources available to them. Besides foundations, potential sources of funding include competitions, crowdfunding, HNIs, incubators/accelerators, corporates, and multilateral aid. Less conventional methods of fundraising include income earned through the sales of products and services, income earned through investments, and endowments.
Not all of these sources are ideal for every organisation. For example, incubators and accelerators offer relatively smaller donations, so they are more suited to early-stage organisations. The upside is that it takes less time to secure these funds. On the other hand, corporate and philanthropic foundations and multilateral agencies offer bigger cheques at a slower pace and are thus better suited to more mature organisations.
Picking two or three fundraising sources that are best suited to your organisation is vital. Aiming for too many can result in a loss of focus. However, you also don’t want to risk putting all your eggs in one basket by relying on a single source, so choose your channels carefully.
2. Be structured and organised in your lead generation
Although this might seem obvious, it’s important to know how much money your organisation needs, both in the short and long term. When you attempt to fundraise from a foundation or corporate entity, one of the first questions you will be asked is, “How much money do you need, and what do you need it for?”
In order to answer this question effectively, you should always know your annual organisational budget, for the current year and the next three years. The current year’s budget estimate should be more granular and tactical, but the three-year estimate can be simpler. Smaller organisations that might struggle to build out their budget can utilise fractional CFO services such as those offered by Subhashis Ray & Associates or Aria CFO Services. You can employ them on a part-time basis to help construct your organisational budget, and they will also help you refresh it periodically. Having budgets prepared ensures that your conversation with the funder progresses past the initial approach.
Once you know how much money you require, you need to identify where it can come from. To help select targets, you should first define your selection criteria as this will help you narrow down the leads to be followed. For example, do you want to approach funders who work on technology, or those who fund civil rights?
Candid and NGOBox are subscription services with a comprehensive list of funders. These list the issues and organisations they fund, which you can utilise to identify leads. Another efficient way to identify leads is visiting the websites of peer organisations that are further along in their journey. You can read their impact reports on the website and identify their donors.
Once identified, prioritise these leads. In our organisation, we do this based on the ABC (access, belief, capacity) framework. Here, ‘access’ refers to whether you know someone (or know someone who knows someone) within the target organisation. Naturally, you should pursue funding sources that you have better access to. ‘Belief’ stands for the alignment between your cause and those that your target organisation funds. For instance, an organisation that funds health is likely to be a high priority for our organisation, provided they fund health in India. Lastly, ‘capacity’ stands for the quantum of their funding. Funders that offer very large cheques are not likely to fund your organisation if their contributions exceed your estimated budget by a significant amount; on the other hand, funders who contribute negligible amounts in relation to your budget may not be worth chasing.
3. Keep your marketing materials ready
Now that you know your budget and have identified funders to approach, it is time to prepare your fundraising materials; these are critical to any fundraising discussion.
- Introductory blurb: While Indian CSR prefers longer introductory e-mails, we have found that global foundations respond better to shorter ones. Tailor your outreach approach to the donor’s profile.
- One pager: This one-page description should contain a tagline that simplifies what your organisation does. The tagline we use is, “We deliver healthcare where there is no doctor.” Your one pager should also briefly touch upon your reach, the geographies in which you operate, the problem you’re trying to solve (and how you’re doing it), as well as your impact. You can conclude with your estimated budget and contact details.
- Pitch deck: This is essentially a longer version of your one pager, but should be no more than 10–15 slides. We’ve noted that the design quality of your deck matters, so we recommend getting it professionally designed (in line with your brand) and ensuring it isn’t text heavy.
- Template grant application: Having this document ready will help you quickly fill out the application forms that a funder may send to you after you’ve made the initial approach. It should contain answers to the various questions that are typically found in a grant application: What’s the problem you’re solving? What’s your solution to this problem? Who are your competitors in this space? What makes your organisation unique? What’s your theory of change? And so on.
- Funder FAQs document: This document should contain some of the common questions you get asked by funders and the responses to them. These are likely to be unique and based on the nature of your organisation.
An important part of preparation is reaching out to your network to see who they know at your target funder organisations. LinkedIn Premium is an excellent tool for achieving this with respect to international foundations. Network with other founders and CEOs, and ask them for an introduction to donors they may know. Most of our money at Intelehealth today comes from referrals by an existing donor or a peer CEO.
4. Find champions for your work
Having a respected and well-connected board of directors is critical to effective fundraising. If you aim to focus on CSR or foundations in India, the US, the UK, or Europe, bring on relevant board members from those regions. Their names will cultivate trust and credibility, even if they may not necessarily have the networks to introduce you to different funding agencies. Include your board members in calls and meetings with decision makers, as their presence and advocacy can help achieve a favourable outcome.
When approaching a funder, try and find an internal champion—a person within the target organisation who will advocate for you. This individual should be selected based on their accessibility and influence within the organisation. They, in turn, will help you access the funder’s decision makers and investment committees.
If there’s one thing that resonates most with funders, it’s when they feel that what you’re saying comes from a place of honesty. Therefore, it is crucial to ensure that the conversations you engage in with them display your authenticity and integrity.
5. Communicate with your donors regularly
Your relationships with your funders have to be nurtured if they are to last. The first step to ensuring this is maintaining your donor database. Intelehealth uses this Excel template to actively track and manage leads and conversions. You can also use a CRM such as HubSpot or Salesforce. Subsequently, regularly engage with your donors through monthly or quarterly newsletters, calls, or other channels. Sharing an annual impact report with your donor also helps. I recommend reading Unicorns Unite; it’s a great book that taught me a lot about building long-lasting partnerships between funders and nonprofits.
6. Perfect the process
Finally, success depends a great deal on setting up and following processes around your fundraising strategy. Here are some steps that will help maintain the rigour and regularity required to improve your chances of success.
- Budgeting exercise: Re-budget before the start of every financial year. It helps you keep track of your organisation’s financial needs.
- Target setting: Budgeting should immediately be followed by setting targets for your fundraising, as it determines who you approach and the quantum of money you ask for.
- Fundraising material development: Refresh your fundraising materials at the start of each year as it ensures that they remain relevant and accurately depict your organisational needs and competencies.
- Prospecting and donor research: Add new leads and enhance existing leads through research every month to make sure that you have a strong pipeline of potential funders.
- Pipeline review: Conduct a weekly review of your fundraising pipeline to keep track of the status of various leads and conversions.
- Follow-ups: Follow up fortnightly or monthly (if needed) with potential funders to prevent stagnation and drop-offs.
- Budget review: Review your budget every quarter so that you can adjust your fundraising targets as needed. The same should be done for your fundraising materials.
- Donor engagement: Keep your funders informed of how their money is being put to use through monthly/quarterly newsletters and annual touchpoints such as impact reports.
It may seem overwhelming to do so much, especially if you are from a small organisation where you are the only fundraiser or have just one other person with you. Being disciplined and setting aside time to fundraise helps. For example, block off two hours every Monday at the same time to review your pipeline, schedule your follow-ups for the week, and send out any communication materials for engagement. Once a quarter, you can spend a day meeting with your CFO to adjust your budget. You can also block off one day every six months to refresh your communication materials. If you don’t set aside the sandboxed time, it won’t happen. Staying disciplined is an integral part of the fundraising process.
It’s important to remember that fundraising is a lengthy exercise. Months (or even a year) can elapse between the initial approach and the final approval. Being disciplined about managing your funder pipeline is an effective way of staying on track. While door opening constitutes 20 percent of the fundraising work you will do, the rest is following through.