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Funds: How Shall I Raise Thee? Let Me Develop the Ways

Fundraising without a broader strategy for funds development can lead your organization down a rocky road, argues funding strategist Quinetha Frasier. Without a sustainable blueprint for development over time, she shows that new programs or facilities may be forced to shutter just as quickly as they opened.

A small liberal arts college undertook a two-year fundraising campaign to raise $1.3 million to renovate a historic building which had gone unused for six years. Over the course of just 15 months, it engaged alumni and major corporate sponsors to raise $300,000 and obtained the remaining $1 million from a Department of Interior Historic Restoration Grant. Nine months later, renovation was complete, and the building was ready to house classes, community programs and a new library.

Sounds like a success story, right?

Unfortunately, the college’s initial plan did not include attracting funds to support on-going needs for maintenance, programs or staff. Their scramble to raise additional funds was unsuccessful, and they were forced to close the doors to the building just one year after its re-opening.

"Fund development" implies that organizations will bring funding to a more advanced or effective state, to mature.

Fundraising “raises” funds, and involves lifting them to a higher level. It does not, however, necessarily include a plan to maintain them. The term “funds development,” however, implies that organizations will bring funding to a more advanced or effective state, to mature. That is, in fact, what most of the 1.28 million US nonprofits strive for - an effective, advanced system of maintaining their operating and program funding. Having spent more than 15 years working with a myriad of organizations across the country, I have witnessed the distinguishing factors of nonprofits that grow and thrive. The most prominent characteristic of these organizations is an active financial sustainability plan, or funding strategy.

Why Funding Strategy is Crucial to a Nonprofit’s Livelihood

It is commendable when an organization successfully raises funding for a project or program through grants, events and/or major donors. However, it is vitally important for nonprofits to have a strategy in place to grow and sustain these funding sources. The strategic process allows you to visualize the ways new funding will intersect with a range of other restricted and non-restricted sources - how grants will fit into their “funding portfolios.”

At Strategic Funding Group, we specialize in grant funds development. As a part of our process, we spend considerable time with each client taking a long-term approach to identifying, soliciting and maintaining sufficient grant funds. Early on in these strategy sessions, we explore four major areas:

- Organizational processes
- Current funding sources
- Plans for expansion

- Potential program or project changes

These considerations are vitally important to financial sustainability because they form the basis for a multi-dimensional approach to the funding research process.

Fundraising should not be a destination.

There are three main reasons why a funding strategy is crucial to a nonprofit’s livelihood. First, it saves time and resources; selecting which grants to apply for is just as important as the actual grant writing. When an organization opens its funding research process to any funder who will have them, they are engaging in what I call “fishing in the Atlantic Ocean.” Researching every one of the funders who generally support “education” or “housing” wastes the time and effort of the organization staff. Rather, staff should have a clear definition of each of the organization’s programs and activities, especially the qualities that make them unique. This will streamline the funding search and yield more relevant results.

Secondly, it creates a blueprint for the organization to build upon throughout its fiscal year. A funding strategy increases lead time by establishing specific action items and tasks such as forming purposeful partnerships, developing best practice program models and budgets, and enlisting local support. Having an annual to-do list helps to direct the nonprofit’s activities, while will ultimately lead to greater funding opportunities.

Finally, a funding strategy sets the stage for leveraging dollars in the long-term. Taking a year-by-year outlook at funding opportunities gives you the foresight to apply for a wide spectrum of applicable funding. This is a responsive, not reactive, approach to grant-seeking. For example, a firm commitment of federal grant dollars makes a strong case to major donors, who see that the organization plans to create a “multiplier effect” for their dollars while sustaining current program funding.

Given the choice between raising a one million dollar budget for 2012 and developing a way to maintain a one million dollar budget over the next three years, most of us would choose the latter. This is the subtle difference between fundraising and funds development: strategies that lead to long-term sustainability. Fundraising should not be a destination; it should be a part of a well-thought-out funds development strategy that will ensure longevity and longstanding community engagement from our nonprofits.

Quinetha Frasier, MBA, is a Funding Strategist for Strategic Funding Group, Inc., and a faculty member of GCN's Nonprofit University.

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