Raising Investment Capital and Fundraising – Not the Same

ID-100449256
Image courtesy of jk1991 at FreeDigitalPhotos.net

In 2016, I worked with five nonprofits engaged in The Patterson Foundation’s Margin Mission Ignition program. After completing a strenuous business planning process, it was time for these organizations to implement their plans. A key part of any social enterprise plan – and ultimately successful implementation – is raising investment capital.

It’s not uncommon for nonprofit organizations to pursue social enterprise activities to diversify their revenue. However, even organizations that have previously had great fundraising success, sometimes find challenges when trying to raise the investment capital needed to implement their social enterprise endeavor.

Fundraising for social enterprise investment capital is different than regular fundraising – but, not completely different. All types of fundraising share some basic principles.

You’ve likely been part of fundraising before, so let’s start with the similarities.

Cultivation
Fundraising is about building relationships on behalf of your organization and cultivation is the biggest part of this. Sometimes when we are so excited about an idea (like our new social enterprise), our enthusiasm leads us to skip the cultivation step – a big mistake! To cultivate a potential investment capital prospect, a nonprofit must reach out and seek to build a relationship.

Listening
The most critical skill in fundraising, both traditional and investment capital, is listening. When cultivating investors, our natural inclination is to “pitch” our idea by doing all of the talking. STOP TALKING and listen to your prospect (they are often filled with great ideas). The more we listen and learn from them, the more they will engage with our project.

Ask
After all of that sharing and listening, surely the prospective investor knows we need their support, right? NO! Every successful investment invitation needs to include an ask. If you’re not specific in what you need, the prospect could either give you something you don’t need or nothing at all.

Shared Values (Mission)
Investment capital donations have the very same core as all other donations: shared values. A social enterprise may have the strongest business plan, leadership, etc. but if the mission of the organization does not inspire the prospective investor of their shared values, no investment will ever take place.

 

See, you’re more prepared that you realize. Now, let’s talk about how raising investment capital and fundraising are DIFFERENT.

Non-Financial Support and Engagement
Social enterprise investment donors don’t want to write a check and walk away. They want to participate and provide support beyond cash contributions. This participation varies by investor, so you have to pay attention (see Listening above) and respond to each donor accordingly. As you cultivate the relationship, think of how their expertise could bring value to your new venture – marketing, leadership, mentorship, coaching. Be careful not to see their desire for engagement as a threat to your plan. Instead, use it as an additional research opportunity and battle-tested resource.

Business Plan Required
Donors who invest in social enterprise want to see that careful planning has gone into the project. Your organization must be ready to demonstrate how you conducted research that lead to thoughtful planning. As a general rule, a nonprofit should never embark on a social enterprise without careful planning. Knowing your investors will want to see that plan just reinforces the importance. Don’t take their questions (sometimes challenging) as lack of interest, they are looking to make a good investment.

Innovation Appealing
Typically, donors who invest in social enterprise are attracted to innovation. While creating your business plan, take the time to highlight new ideas (and understand them thoroughly) so you can share them with potential investors. Some social enterprise ideas aren’t brand new but are new to your nonprofit. Make sure that you focus on that innovation.

Risk Tolerant
Investment donors tolerate more risk than typical nonprofit donors — with innovation comes risk. Investors know that a venture may not succeed. They are often more comfortable with the risk than the nonprofit leadership. But when a project fails, the investor wants to see that you learned from it and take the time to make improvements going forward.

Performance Measurement
Investment capital donors are interested in how things are going throughout the implementation of your social enterprise. Be sure to have a plan for communicating with donors once your enterprise is operational. Measure performance and communicate with investors. Don’t worry if all of your measurements aren’t exceeding expectations. But, be sure to include what adaptations are being made so they can see that their investment provided an opportunity for your organization to learn and improve.

While there are some new things to consider while raising capital for a social enterprise, you and your organization have completed some of the hardest parts through the research and plan development process. At the funding stage, everyone is excited about getting this new project started and you can use that excitement to make an impression on potential investors

I hope with the realization that you can build on what you already practice in fundraising in your organization, that you approach this with confidence.

A quick note: this blog was written for The Patterson Foundation’s blog. If you’ve never read it, you should. It’s loaded with great information.

6 Reasons NOT to Attend Planet Philanthropy

Screen Shot 2017-05-23 at 9.35.32 PM

Planet Philanthropy is coming to Tampa June 25-27 – hooray! The Florida fundraising conference moves around the state each year and for the first time in many years, we are hosting it right here in downtown Tampa. I think this is fabulous but I realize not everyone agrees with me. So for those who aren’t sure, here are 6 reasons not to attend (and why I think they are wrong).

1.  It’s too close to home so it won’t be fun
Sometimes the fun of attending a conference is getting to know a new city, I get that. But when is the last time you explored your own city? Our colleagues at the downtown jewels like Florida Aquarium, Tampa Theatre, and the Tampa Bay History Center, support amazing missions that make Tampa a fun location for any event. I encourage you to stay at the Hilton Downtown Tampa and have the full conference experience. I’m going to.

2. My organization doesn’t pay for it
I understand that challenge because I have been there. More than once in my career my employer didn’t support continuing education but I came to the realization that I had to make the investment in my own career. Fortunately, Planet Philanthropy is affordable and you can minimize travel expenses. If you decide not to stay at the hotel, valet parking is available at a very reasonable price.

3. I’m not a CFRE/I’m already a CFRE
You might think that CFRE hours don’t matter to you because you aren’t pursuing that certification but I would encourage you to consider that you might pursue it in the future so keep track of your continuing education hours now. If you already have the CFRE designation, Planet Philanthropy will give you a healthy number of continuing ed points for your next recertification (and it’s coming faster than you realize…it’s always coming faster than you realize).

4.  The networking won’t be good because everyone will be from Tampa
This is a statewide event and while the Tampa Bay area will be well represented, the presenters, exhibitors, sponsors and guests will be from across the state and across the country.

5.  I’ve been in fundraising a long time and I’ve seen/heard it all
With that in mind, the conference planning committee has been diligently researching best practices and securing presenters to cover the latest and greatest.  Click here to see the full list of offerings.  If you’ve been in fundraising a long time, it may be time for you to take a mentoring role to our younger colleagues.

6.  I’m between positions so the timing’s not good
I’ve witnessed more than one spontaneous recruitment at Planet Philanthropy through the years. A nonprofit CEO once told me they would never send another development director to Planet Philanthropy because the last two had used it to get a new job. (Note: I think the problem there is with the CEO but that’s a topic for another blog, another day)

You may have other objections to overcome in order to attend. I encourage you to overcome those challenges and get yourself registered today. Hope to see you there (or here)!

One more thing to share: I am honored to be presenting “Best Practices for Fundraising from a Modern Family,” where I’ll talk about the differences in how generations give. 

Mentors

nancy-cropped

I didn’t go looking for a mentor but one sort of showed up in my life. Let me tell you how: right out of college I was working in residential mortgage lending, a terrible fit even though my dad had been a banker. A contact I made through some volunteer work encouraged me to apply for a job in fundraising at a hospital. At that time, my boyfriend’s mom ran a nonprofit so I called her to see what she thought about a job in development. She was very encouraging and helped me through the interview and hiring process. She became a tremendous mentor and fundraising turned out to be a good fit for me. Full disclosure: I married that boyfriend. Just so I’m completely clear: my mother-in-law has been my greatest, but not my only, mentor. I know how amazing that is because many people struggle just to communicate with their in-laws.

If she were writing this blog, Nancy Leonard would have started at the dictionary, so I did. The dictionary says “mentor” is of Greek origin and defines it this way:
     Men’-tor – Noun
     1. A wise and trusted counselor or teacher
     2. An influential senior sponsor or supporter
     Synonyms: adviser, master, guide, preceptor

I like that “mentor” has Greek origin because she was the Executive Director of a Greek letter women’s fraternity for over 20 years. She would assure you that “fraternity” is the right noun because the organization is older than the word sorority. She was like that. She wouldn’t have raised her fist for women’s rights or bristled if you tried to correct the statement. She knew her stuff and generously taught the rest of us so much.

That’s a good trait in a mentor: extensive knowledge but no need to show it off. Here are some other traits I’ve valued in my mentor:

Bright – she was very smart and had a love of learning that insured she kept getting smarter. Her brightness also extended into her sense of humor.

Talented – she was musical, artistic, a brilliant writer and a relentless proofreader.

Respected – she was a leader in her field and set a great example on how to earn respect through years of dedicated service to others.

Varied experience and interests – she started as a business teacher (and could write in shorthand!) but also hosted a children’s TV program, and directed public relations for one of Indianapolis’ biggest festivals. Add to those: a love of sports, musicals, politics and current events and I had a mentor who could help in a lot of areas.

Genuine interest in helping younger people – I was not her only mentee, I was one of dozens. She used her positions – both personal and professional – to help younger people. She had empathy for our challenges. But if I’m going to say “empathy” I must stress not sympathy. Nancy never let me wallow in self-pity. If I didn’t like a situation, she encouraged me to change it or change my attitude.

Ability to offer critique, not criticism – she could have the tough conversations with me but always left me feeling like I could get better.

Willing to be honest with me – not be critical or harsh but she encouraged me to look at things objectively and take the appropriate action.

Willingness – many talented people have been a good influence on me but her willingness to invest time and energy into my life is what made her a true mentor.

I am realizing now that my life is filled with mentors. Some have been long-term and close, while others have been in my career for a brief time. That is an additional trait: the right fit at the right time, whether through a formal program or just coincidence.

I remember the first time someone introduced me as their mentor. I was shocked and pressured. Had I signed up for that assignment? Was I worthy? Had I really added any value? Since then, I’ve learned to answer those questions with a resounding “YES!” As a way of thanking my mentors, I am committed to being available for those around me.

I’ve been thinking about mentors because January is National Mentor Month. I originally wrote this tribute when my “wise and trusted counselor” passed away.  I’ve had the opportunity to reflect on how blessed I was to have known her. I’ll close by saying: thank you to all of my mentors. I appreciate what you have done for me. Most especially, thank you to Nancy Leonard – mentor, mother-in-law and friend.

What Are We Doing: Fundraising or Development?

Nametag
Image credit: Jennifer Davis Dodd

Since starting my job at Lakeland Regional Medical Center Foundation more than 25 years ago, I’ve been explaining what I do. That’s natural; since my title included “development,” and many people weren’t sure what I was “developing.”

Throughout my career, my titles have included “development” and “advancement” in several iterations (associate, director of, officer). To simplify I’ve usually explained, “I’m a fundraiser.” But since I’ve been at this for a while, I’ve realized there is more to what I do than fundraising.

Let’s start with some definitions from the Association of Fundraising Professionals’ Dictionary:
Developmentnoun; the total process by which an organization increases public understanding of its mission and acquires financial support for its programs
Fundraiseverb; to seek donations from various sources for the support of an organization or a specific project
Fundraisernoun; a person, 1. paid or volunteer, who plans, manages or participates in raising assets and resources for an organization or cause. 2. an event conducted for the purpose of generating funds.
Philanthropynoun; love of humankind, usually expressed by an effort to enhance the well-being of humanity through personal acts of practical kindness or by financial support of a cause or causes

I’ve noticed that we can’t even decide what to call ourselves within our professional field. Click through these links to discover the various ways we describe ourselves:
Association of Fundraising Professionals
National Philanthropy Day
Association for Healthcare Philanthropy
Council for Advancement and Support of Education
Certified Fund Raising Executive

We can’t even decide whether we want “fundraising” to be one word or two.

What Really Matters

My dad used to say, “I don’t care what you call me, just don’t call me late for supper,” and I think that applies here. It doesn’t matter what you call it, what matters most is how you do it.

Development is about developing relationships on behalf of your organization.

Fundraising is a transaction.

If development were a line, fundraising would be a spot on that line.

Here’s what matters most: how do you treat your donors? Do you treat them as a means to a transaction? Or do you treat them like friends and family, like someone who has a relationship with your organization?

If you’re treating them like a transaction, they won’t stay.

If you build a relationship, they will stay.

So what do you call it at your organization? Development, fundraising, or some of both? And how do you approach it: like a transaction or a relationship?

No matter what your job title might be, don’t strictly fundraise. Invest your energies in developing relationships with the donors who support your organization.

Hand Written Notes: Who to Write

Blank notecards
Image courtesy of phasinphoto at FreeDigitalPhotos.net

Here you sit, pen in hand with a blank note card – now what? In my last 2 blog posts I’ve extolled the virtues of writing hand written notes and talked about some of the occasions that would warrant a hand written note. This time I’m shifting my focus to who should receive those handwritten notes.

I believe that hand written notes should go to more than just donors. Consider these suggestions:

Donors

  • write to a donor who makes a significant gift, remember not just significant to your organization but significant to the donor. Even if the official thank you letter comes from someone else in your organization, send your appreciation for their generosity.
  • send a note to a donor who made a program accomplishment possible bonus: send a photo with the note for extra impact.
  • create a list of donors who have given for a significant number of years and send them occasion notes throughout the year.

Prospects

  • send a note to someone you’ve identified as a prospective donor but haven’t been able to meet in person. Send a photo of something meaningful that demonstrates your mission in action.
  • write a note to a prospect who has indicated interest but you’ve had trouble getting a face to face meeting to follow up. Invite them again for a tour or a visit to your program.

Volunteers 

  • send a note to every volunteer, eventually. Depending on the size of your volunteer workforce, this could be a monumental task. But make a list and get started with a few notes a week. You’ll get to everyone, eventually.
  • look for people who are helping you but you might not have classified them as an official volunteer. For instance, someone who provides valuable advice when you are planning a special event.

Colleagues

  • write a note to the people who report to you thanking them for a job well done. Appreciation should be expressed throughout the year, not just at annual review time, and a personal note is a gracious way to deliver it.
  • send a note to the staff in other departments who make your work possible. None of us could do what we do without the people in surrounding departments. Even if it’s part of their job descriptions, your colleagues will appreciate your appreciation.
  • write a note to your bosses recognizing their dedication. Don’t forget to thank up the chain of command, too.

This list is by no means comprehensive. Look around to discover who else will benefit from a sincere expression of your gratitude for their part in your success.

Happy writing!

Hand Written Notes: What to Write

ID-1004942
Image courtesy of Simon Howden at freedigitalphotos.net
In my last blog post, I extolled the virtues of handwriting notes. (Click here to read that one) If I convinced you that writing notes is a good idea, you might be wondering “what should I write about?” I’ve got some ideas for you.
Appreciation for volunteering – many of your donors also volunteer for our organizations. Think about board members, event volunteers, program volunteers and all of the other unpaid labor that keep your nonprofit functioning.
Impact of a program a donor supported – because we are there everyday, we sometimes forget about the impact of our organizations, the magic that happens. The next time you see some of that magic, think of the donors whose gifts enabled that to happen. Write them a quick note to tell them about it. Bonus: enclose a picture with the note.
Celebrations – send a note for a donor’s birthday or anniversary. If you know they’ve accomplished something, send them a note of congratulations.
Condolences – if a donor has experienced a loss, send them a card expressing your concern.
Newsletter with a note – the next time your organization is sending a mass mailing newsletter, pull a few key donors off of the list and send theirs first class, in an envelope, with a personal note.
When you haven’t had personal contact in a while – if a donor has been out of touch or hard to reach, send them a quick note and tell them they are appreciated.
Writing notes is habit-forming. Once you get started, it will become more natural. Let me know if I missed any good reasons for a hand written note and I’ll add it to my list.
Happy writing!

Hand Written Notes: Why?

ID-10050742
Image courtesy of Simon Howden at freedigitalphotos.net
I completed an experiment recently:
I saved all of the mail that came into our household for one week. You would be amazed!
So much junk mail. Several bills. A few medical items.
I collected our mail to create a hands-on learning experience in a class I was teaching at the Nonprofit Leadership Center.
Tom Ahern, in his book Keep Your Donors, says we divide our mail into three categories:
  1. “Stuff I canNOT ignore, or something bad will happen to me.”
  2. “Stuff I can SAFELY ignore, and NOTHING bad will happen to me.”
  3. “Stuff I could be interested in. I’ll save that for a second look.”
As a class, we dug through the Leonard family’s week of mail and sorted accordingly.
We found several hand addressed items: a wedding invitation, a birthday card, and a post card thank you note from a favorite charity. While we were sorting it became crystal clear to me what I’ve been teaching for many years: hand written items are very powerful. Their power/value has grown even more in the age of electronic communication.
Let’s be honest, the mail we send from our nonprofit will never be in stack one. The “stuff I can’t ignore” stack is for bills, insurance information, and items from my children’s schools. No matter how much our donor may care about us, our fundraising communications can be ignored without consequence. That leaves us fighting for a spot in the pile of interesting things.
The next time your procrastinate sending handwritten thank you notes, ask yourself how you are going to move from stack two to stack three? (another way to say it: how do you keep from getting thrown away?) The answer is: write something by hand. How can we make this practical?
Try this experiment:
  • Create a list of 200 donors who have supported your organization.
  • Print the list.
  • Each Monday morning put 5 notecards on your desk.
  • During the week, look for reasons to write a personal note to one of those donors.
  • Each time you do, put a check mark on the list.
  • Before you go home on Friday, make sure you have written your five notes for the week.
  • Repeat.
If my math is correct, after 40 weeks, you will have written 200 notecards. Watch what happens. Your relationships with your donors will begin to grow and from that your fundraising will be more successful in the long run.

Plan Leads to Fundraising Success

 

 

Screen Shot 2016-04-07 at 5.32.53 PM

Exciting news: new online class is approved for 3 points toward CFRE certification

Not all online classes are created equal – I get that. Many online classes involve watching slides and listening to a lecture. Our class is completely different. We call it discussion-style because the class is a series of video conversations between Louanne Saraga Walters and me. We walk through the steps to create a fundraising plan and include worksheets. This isn’t just watching, it’s doing.

3 times you’ll benefit from the new Fundraising Succe$$ class:

1.  Need a new development plan
If you are raising money without a plan, STOP. Well don’t stop raising money but stop trying to get it done without a plan. I’ve got the help you need. Fundraising Success: The Complete Development Plan will walk you through step by step to get you from where you are now to where you want to be. Feel like you are out there on your own? Creating a development plan can fix that. One of the key steps is defining your team.

2.  Time to update your plan
If you have a development plan but it’s been a while since you looked at it, that’s a sign that you need to update it. A development plan should be a living, active document (printed or digital) that everyone on your fundraising team uses to know where you are going and how you are going to get there.

3.  Need CFRE points
Fundraising Success: The Complete Development Plan is applicable for 3.0 points in Category 1.B – Education of the CFRE International application for initial certification and/or recertification. Once you complete the online videos, we’ll send you the points tracker. If you are already certified (congrats!), use the points toward your next recertification. If you are pursuing it, use them toward your initial certification. Not sure what I’m talking about? Click her for CFRE info

But don’t take my word for it, take the class and let me know what you think. The Udemy platform allows for student/instructor interaction (that’s you and me). This is the first in a series that provides the tools you need to experience fundraising success in your nonprofit.

If you’re reading this blog, I’d like to offer you 10% off your registration of Fundraising Success: The Complete Development Plan. Register now and let’s get started.

You Are Here

IMG_0948
It happened again last week: I got turned around at the new outlet mall. My son and I were shopping for some new items at the Disney Store and we parked in our usual place near Starbucks. But I can never seem to remember which row of shops to head down. What did we do? Used the mall map and found the “YOU ARE HERE” indicator so we could map out the best route to the Disney Store. What does this have to do with a development plan? Everything!
Many nonprofits stay plenty busy with fundraising activities. Enough to do is never the problem. The problem is usually doing the right things. The place to start is by determining where you are currently. Here’s how to start: make a list of everything you are currently doing related to fundraising and development. It’s not complicated but it’s a step that many people skip.
3 Steps to Find “You Are Here”
  1. Make a list – begin with a brain dump. List everything you do related to fundraising and development…everything. If you are part of a team, ask the rest of your team to help you. Look back at your calendar from the past year. Think back to the items on your to-do list.
  2. Examine the results of those activities – now that you’ve made your list, write down the results. Look at the revenue and expenses for each activity. Now take that a step farther: were there other benefits? For instance, a stewardship event doesn’t show a positive net income but if it gave you an opportunity to engage your donors, be sure to list those benefits. Examine the results in terms of deeper engagement with your existing donors.
  3. Determine what you want to keep, delete, add – based on the results, what is worth keeping? Make notes on how it can be improved. Now look at the things that didn’t raise much money and didn’t provide other benefits. Make the (sometimes painful) decision to eliminate those activities. At this step, take time to note the things that are missing from your development program.

Once you determine where you are, you’ll be better ready to decide where you want to be and how you will get there. That’s what a development plan can do for you: identify where you want to be and map out how to get there.

I’ve created a new online course with Louanne Saraga Walters of The Philanthropy Show. The discussion-style course will walk you through creating a complete development plan. It includes video instructions and valuable tools to create a development plan that will increase your fundraising results.  I’m delighted to offer a discount to my blog readers.
Click here for more info and to get your discount.

What 3 Things?

ID-100258663
Image courtesy of Stuart Miles at FreeDigitalPhotos.net

I was meeting with an Executive Director and a newly hired Development Director to work on a development plan for their organization. The development director had extensive experience in the for-profit sector and had volunteered with the organization. However, this was his first adventure in professional fundraising. As we wrapped up our meeting, the ED turned to me and asked, “What three things would you tell him as he gets started?” What a great question! At first I was taken by surprise. After a quick minute of thought here’s what I shared:

1. Always have a story
We know our organizations so well but have to remember that the people we meet everyday won’t know it as well as we do. Telling an impactful story is the most effective way to demonstrate your mission in action. Forget the statistics about impact. Don’t bother saying that you are a 501(c)3. Tell me a good story to pique my curiosity. Invite me for a tour. That’s how you will begin to build relationships for your organization.

2. Listen more than you talk
Now that you’ve got a story to tell, tell it well then shut up and listen. Especially when we are new to an organization, we are compelled to demonstrate how much we have learned. Stop that. Tell your story, then stop and listen to the responses. When you are meeting donors who already support your organization, ask them questions and learn from them. (Not sure what questions to ask? My favorite resource for that is from fundraising expert Karen Osborne here)

3. Write it all down
In the busy life of a professional fundraiser, we are tempted to move quickly from one task to the next without taking the time to record important information. I warned my new colleague not to skip that step. For instance, when we are meeting with a donor and practicing “listen more than you talk,” we will probably learn new information that we think we will always remember. Unfortunately, we won’t. Write it down so that it will be recorded and available for you (and the development staff that follows you – and the data shows that you won’t be with your organization forever).

Some months have passed since this interaction and I’ve had a chance to reflect on the three things that came to mind.

Would I change my answers?

I wouldn’t. I still think these are the three things a new development director should keep in mind as they get started.

This blog originally appeared on the Nonprofit Leadership Center of Tampa Bay’s blog.