Stop Hitting Your Head Against the Fundraising Wall

I was in Atlanta recently speaking at NeighborWorks America's National Fundraising Symposium. I really love speaking to nonprofit staff and board members who are in the trenches trying to raise money for their organizations.

The same thing that happened in Atlanta always happens. The group started out tired, uninspired and worn out with fundraising. But then I started to describe financing, and the light bulb went on. For the rest of the day when I talked with attendees, or heard them talking to each other, they would try out this new word, this new concept — "financing."

But it's not just semantics. Financing is a fundamentally different approach to every aspect of a nonprofit organization. For the group in Atlanta, I laid out the five main tenents of it:

Create a financing plan
Nonprofits must create a comprehensive strategy for bringing enough, and the right kind of, money in the door to achieve their strategic goals. This includes revenue and capital, programs and infrastructure dollars, and all funding sources. Money must be understood and used as a tool, instead of feared and sequestered.

Connect mission and money
The financial woes of many nonprofit organizations often stem from a misalignment of mission and money. A nonprofit leader who creates a financial engine for her organization that is fully connected to and supportive of its mission (instead of detracting or isolated from it) will enjoy financial sustainability.

Diversify funding
Relying on only one or two funding sources, particularly foundation grants that make up less than 2 percent of all the money flowing to the nonprofit sector, is a dangerous strategy. It is far better to create a robust and diverse money mix that fits well with your nonprofit's mission and competencies.

Invest supporters
As mounting research demonstrates, donors are increasingly looking to become engaged in the nonprofits they support. And they are looking for impact, not just a place to write a check. In order to attract these donors, nonprofits must articulate their value and convince supporters to become partners in creating social change.

Find money to build
The time for scraping by and never having enough money for the right technology, staff and systems is over. Instead, nonprofits must become savvy about capacity capital and start raising the money they need to build the organizations their missions require.

It is so inspiring to see people who are on the front lines of creating stronger schools, neighborhoods and communities in this country suddenly realize that it doesn't have to be so hard. You can stop beating your head against the fundraising wall.

Nell Edgington is president of Social Velocity. Reach her at info@socialvelocity.net