April 24, 2017

Fundraising from new age philanthropists

A new breed of philanthropists is emerging--do you have what it takes to engage with them successfully? Here’s a four-step guide to help you fundraise effectively from these up-and-coming donors.

4 min read

New age philanthropist

Noun: A new breed of funders passionate about solving social problems and keen to bring their business acumen, skills and funds to high impact non-profit organisations.

Characteristics: ambitious, curious, a problem-solver and likely to be personally involved in their philanthropy.

In the pursuit of social justice and systemic change, social entrepreneurs require financing to create, test, innovate and scale their work. Diversified funding is essential, but too often organisations become proficient at fundraising from a particular type of donor and, in the process, quickly hit a ceiling.

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If you stay true to your goals and mission, there are only a finite number of foundations to secure funding from. And this may limit your ambitions.

Fortunately, there is an emerging breed of philanthropists that is more likely to provide flexible funding and invest in building organisations. These donors–who operate very differently from traditional foundations–are keen to be directly involved in their giving and recognise that they can offer both skills and money.

Their initial grants are in the range of USD 25,000-50,000 and increase with time. Starting out, they often also don’t hire staff to manage their grants. Engaging with them entails building a relationship with a successful business leader or entrepreneur and your approach will, therefore, have to be very different.

1. Educate your donor

Foundations play a vital role in the funding ecosystem and their depth of grassroots knowledge, research and expert staff can be invaluable for a social entrepreneur.

When approaching a foundation, you have likely researched how your implementation approach meets a set of criteria or a request for proposal. You already know what the foundation is looking for. Your challenge is explaining clearly enough that you are delivering and measuring the outcomes they want to fund. You don’t to need to educate a foundation.

“Foundation staff typically have graduated from various academic programmes focusing on the development sector and have decades of work experience that gives them deep insight into on-the-ground realities” explains Deval Sanghavi, co-founder of Dasra, a strategic philanthropic organisation.

However, when pitching to new philanthropists, you are unlikely to know in advance what they are keen to fund; often they are themselves on a journey to understand, learn and decide where and what they would like to support.

Explain not only what you do and the impact you want to have, but why your work is required.

You will probably need to educate philanthropists new to the sector, explaining not only what you do and the impact you want to have (your usual pitch), but also why your work is required. If you can tempt a philanthropist away from the office and take them into the field, you may have the start of a very deep relationship.

New philanthropists are worth the investment in education. Whereas partnering with foundations can deepen domain knowledge, working closely with philanthropists–many of whom have succeeded in business–can bring in a wealth of skills such as marketing, strategic, operational and funding.

2.Share strategy

When pitching to a new philanthropist, share your thinking around strategy. Entrepreneurs want to know that you have thought about your organisational needs for the medium term and not just the short term. If you have the right level of detail, you can make a clear ask and have a good shot at receiving that funding.

As Maharshi Vaishnav, development director at Educate Girls, a leading nonprofit, recommends, “Programme funding is relatively easy to manage. To attract less restricted funding, you need a transformative vision for scale. You need to start thinking about growth and the things that will help you get there such as second-line management, systems and technology.”

3. Make time

Educating and strategising with potential donors takes time, so prepare for a much longer lead time when dealing with new philanthropists.

“Social sector leaders need to present three- to five-year strategic plans, be able to articulate how they can leverage both skills and capital from the funder, and spend more time educating them on the development sector overall instead of just focusing on their pitch,” says Deval.

School girls in uniform sitting in a classroom

Photo courtesy: Charlotte Anderson

One of the most effective donors I’ve worked with spent several months visiting education projects across rural India. After a field visit, the nonprofit engaged him at a strategic level from the very beginning. It took a lot of the founder’s time, but this investment has reaped many rewards.

The donor went on to become a board member of the nonprofit, raised substantial funding from new donors and continues to make unrestricted multi-year donations to the organisation’s work.

 4. Leverage your board

Finally, relationships and people matter. New philanthropists want to get close to the founder or CEO of an organisation and gain insight into their thinking. A fundraising manager is unlikely to be the right person to build this kind of a relationship, and founders often have too much on their plate.

This is where a board with a clear fundraising responsibility will be critical, as the ‘peer ask’ from a heavyweight board member is what could swing the decision. Enabling your board to fundraise alongside your founder or CEO can help lighten the load and help you reach more potential donors.

There are, of course, exceptions to every rule. Many foundations are very open to funding institution-building costs. And new philanthropists, who may be risk-takers at their work, could prefer a more emotional and traditional approach to their philanthropy.

Take this new generation of philanthropists seriously, invest the time, and actively seek their partnership.

All said, I would strongly encourage you to take this new generation of philanthropists seriously, invest the required time and actively seek their partnership. They are now bringing  in large amounts of capital to the sector and will be the catalysts of significant social change.

Alison would like to thank Maharshi Vaishnav from Educate Girls and Deval Sanghavi from Dasra for their valuable inputs to this piece.

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Alison Bukhari

Alison Bukhari is a non-profit management professional with over 15 years’ experience in the Indian social sector. She lived and worked in India for eight years with Magic Bus and Dasra, and has a number of clients through her consultancy practice. She is currently the UK Director of Educate Girls and works for a number of donors and NGOs advising on their work in India.