One of the best, most under-utilized ways to give leverage to a fundraising team is by creating fundraising products.
That’s products, not programs.
Nonprofit fundraising is a constant uphill battle: to raise enough money, and to raise the right kind of money. And since most philanthropists choose not to give when they believe there’s a risk they won’t have an impact (“people look for any excuse to avoid giving a donation and then rationalize their skinflint behavior to avoid feeling selfish” says HBS professor Christine Exley), nonprofits respond by creating projects.
Project-based fundraising can work, but just as often it pushes an organization off mission; or it doesn’t provide enough money to pay staff and keep the lights on; or it obliges the organization to keep a program going when it’s not working; or it results in an organization that is so constrained in what it must deliver that it never creates new things.
The better solution is to create fundraising products.
First, some definitions.
Think of a program as an existing, understood and defined set of activities. The activities-based orientation lends itself to highly-specific budgeting, and setting expectations around “we will do these specific things in this way at these times.” Uncertainty is low, as is freedom.
Conversely, a fundraising product is a narrative that sits comfortably between “fund our entire organization” (unrestricted giving) and “fund this set of activities” (a program). It as an initiative around which you create a compelling narrative, one that mobilizes a set of people to make something (new) happen.
Some of the ingredients in a successful fundraising product are:
- Clarity about what will be built in a specific time period (e.g. “over the next 24 months we are building a new initiative to support income-generating activities among a group of high-performing grantees.”)
- A defined total fundraising amount (e.g. a few million dollars)
- A compelling narrative that clearly connects the dots between the funds being raised and the change that will result, and an underlying business logic (this one’s up to you)
- A minimum threshold for funders to participate (“our core group will each give a minimum of $250,000 over three years”)
- Clear roles for the funders in the co-creation of this initiative: how they will help shape the initiative, how information will flow to them, exclusive opportunities to come together as a group and with your team/the people and organizations you’re investing in. (e.g. you’re creating a virtual board for the initiative)
The beauty of this approach is that it empowers both the organization and the funders, plus it gives the fundraiser the tools she needs to mobilize more capital: the bigger story has been created (narrative), there are a limited number of seats around the table (scarcity), the fundraise for this program will start and end (deadline), there is a defined funding amount to be part of that group (dollar thresholds), and the role of the philanthropist in the work that will unfold is well-understood (membership in a group).
When done right, a great fundraising product supports everyone’s success: the funders (who get a real hand in creating and accompanying something new and meaningful); the fundraisers (whose effectiveness you’ve just tripled); your organization (which will get the flexible capital it needs to do something important); and your beneficiaries / customers (who are more likely to participate in an offering that, by design, can flex to suit their needs and feedback).