Effective fundraising is what keeps the lights on and the programme running. As social entrepreneurs, we must master this skill so we can continue our work without being distracted by a constant shortage of funds.
While my experience has taught me that there is no formula, I’ve also learnt that there are steps one can take to increase the probability of success. These apply regardless of your organisation’s size.
1. Start small and build from there
As nonprofits, we persevere against all odds when it comes to our programme. Why shouldn’t we apply the same approach to fundraising?
Fundraising is relationship building
Fundraising is really about how well you’re keeping your funders engaged—before and after they have given you money. Don’t ask for funds as soon as you meet someone. Instead, ask people to help you for instance with marketing, MIS or technology. Later, when they’ve been part of your journey and are willing to associate their name with yours, you can ask: “Do you know people who can offer financial help?” By this point they will be happy to make those introductions.
We very quickly want to ask for money. My lesson is, don’t.
Once they support you, you need to treat them as co-travellers, not outsiders. Ideally, you want to be able to establish the kind of rapport with them where you can speak openly about a strategic or operational challenge, and seek their guidance.
Be patient and persistent
In September 2015, I was trying to get a meeting with a corporate, whose CSR strategy aligned with Arpan’s work. I met with a mid-level person who connected me to her peer in CSR. I tried setting up an in-person meeting, but she kept saying: ‘no, we don’t have enough money,’ and ‘let me get back to you.’ I would listen and then follow up in four weeks. Then in two months, and then again. I spent all of 2015 and most of 2016 following up.
In 2016, I happened to meet one of my mentors. I mentioned that I had been trying to get a meeting but hadn’t succeeded. He made one call and within a month the meeting happened—finally, in December 2016. We got funding in March 2017.
So it took two years and a lot of patience—from reaching out in 2015, to getting a meeting in December 2016, and finally getting some money in March 2017.
Photo courtesy: PT Money
Be diligent about building the funnel
Success is as much about the numbers as it is about the relationships. You have to look at your sales process and conversion ratios, how many people you need to meet, and how many submitted proposals will get converted.
Success is as much about the numbers as it is about the relationships.
For instance, we started 2016-17 with 88 conversations. Thirty-six of those didn’t work out. We have 34 live conversations in the ‘funnel’, another 13 are at the proposal stage and five are closer to conversion.
The broader the funnel, the higher the chances of something working out. Many will drop out and it’s important to realise that the average conversion timeframe is around nine months to a year. There are no shortcuts.
In the beginning, focus on wholesale grants
I have found that it’s easier to raise wholesale grants (over Rs 5 lakh) than retail (Rs. 1,000 from multiple donors). While retail can be tempting, focus on it at a later stage as it requires time and effort, which you may not have in the initial years. Also, having a basket of funders is important because it mitigates the risk to your organisation should a funder drop out.
2. Cultivate new relationships
Build your network, and find someone to recommend you
Fundraising takes hard work to constantly put yourself out there, and try to get as many meetings as possible. In my experience, if you spend your time fretting about the money and don’t go and do the work that’s required for it, it’s not going to happen.
Having an influential individual recommending you is half the battle won. When Arpan goes into a meeting with a recommendation from, say, the chairperson of Goldman Sachs, we’re taken seriously. Get people you know to open doors for you. I haven’t raised a single grant above Rs 1 lakh without somebody introducing and recommending us.
Finding the right person with the influence is key. You have to know who this person is and then put your foot in the door.
Work around corporate cycles
A sales cycle typically takes 6-9 months from the first meeting to getting funded. What speeds up the process is timing.
All CSR approvals happen at the board meeting of the Working Committee therefore knowing the timelines and systems for different corporates is key. Companies also meet quarterly or half-yearly to discuss CSR. If they’ve just finished their six-monthly meeting, it’s unlikely you will get presented for another six months.
Focus on what they’re asking for; not what you want to tell them
Your donors are usually entrepreneurs or corporate sector professionals. They thrive on numbers and percentages and you must be able to talk their language.
Whether you’re writing a proposal or going into a meeting, you need to know what they’re really asking. Too often we’re focused on what we want to say, rather than what they want to know.
Make your cause their agenda
In many cases, your cause may not be ‘important’ to funders. When we started, Arpan’s work on addressing the issue of child sexual abuse was on nobody’s agenda. I needed to change that, and make the issue occupy their mind space.
Maintain at least a 12-15-month cash flow.
For this, I would need to articulate its importance, and the solutions Arpan had developed to deal with the issue. You have to educate your donors and get your issue on their agenda. Articulating how your work overlaps with their priorities also helps.
With a new donor, start small; with old donors, ask big
Rather than seeking large grants upfront, start small. It’s easy to get donors to commit to a small grant at first. Once a corporate becomes a partner, it is rare that they will drop out. In the first year, take the time to also learn what their attitudes and value systems are and if there can be continued alignment.
Learn to say NO when it doesn’t align with your strategic focus
For resource-constrained nonprofits, it can be tempting to follow the money and, for instance, go to different geographies. But it’s important to stay true to your core. Plus, defining strategic direction is a role that is better played by board members and advisers. If one must acquiesce to a donor, as can be the case at times, it’s best to ensure that there’s a strong strategic reason in doing so.
3. Nurture existing relationships
Build credibility
During Arpan’s initial years, I applied for the India NGO award that was being run by a global foundation. Though I hadn’t heard of them, I figured an international entity would bring us some credibility. We applied in the sub-Rs 1 crore category, and won. I then used this win to go to existing and new donors, knowing that both typically tend to feel assured of work that has received external validation.
External validation matters
Similarly, strong M&E—both internal as well as through an external agency—assures funders that your organisation is open to learning, credible and externally validated. This is important because all funders want to know the outcomes from their investments. M&E also helps guide your organisation’s strategic direction and bring your donors along as your grow.
4. Build a team
Cultivating and nurturing funder relationships is time consuming and takes effort; often, there’s over-dependency on the Founder/CEO. Start building a team to support fundraising efforts. If funding is limited, hire interns to scout leads. Mid to senior programme staff can help with writing proposals. As budgets increase, hire a senior person and slowly build a team just for fundraising. Look at it as an investment rather than an expense.
