“Ask Pamela” is a collection of real life conversations between Pamela Hawley, an established social entrepreneur, and Mike Del Ponte, an up-and-coming social entrepreneur. Pamela was a co-founder of VolunteerMatch and is the founder and CEO of UniversalGiving. Mike Del Ponte is founder and CEO of Sparkseed.
It seems like most nonprofits struggle to fundraise in the early days, and then when they have a big success – in terms of publicity or a large grant or donation – the funds seem to flow. What advice would you give to new organizations that have not yet had one of these big successes? <1:30 pm November 24, 2009>
Mike, this is an interesting question that refers to both nonprofit and for profit start-ups. Some organizations get significant funding early on, while others bootstrap for years. A lot of this will depend on your leadership and focus, as well as how you want to fund your efforts. Some of it is as you describe — that support comes in after you are successful. You’re right to say that this is common.
People like to jump on the bandwagon after they see success. Being the first person to say “yes” is challenging for most people. Being the 1,000th person to say “yes” is much easier! As entrepreneurs, it is our job to have that “yes!” mentality, otherwise our organizations won’t get off the ground.
Entrepreneurship is riveting, stimulating, inspiring, and invigorating. It’s also hard. Those who choose this road know they don’t want to give up. It’s not an option in their heads (even though sometimes they have to due to market timing, personal reasons, etc.) So I’d make sure you stay very streamlined in the beginning, be judicious with your finances, and get as many pro-bono services as you can. Keep it simple. Start by asking yourself, “What do I really need?”
Regarding funding, you may need to go to friends and family. You may need to use some of your savings. You should go to current funders and ask if they have a reference. And you should cast a wide net to attract new funders. Go to the Foundation Center and identify some very likely fits – donors who will understand their involvement with your organization as beneficial to them and you.
Once you have identified these donors, ask for a warm reference to other potential funders. The point is, in all your relationships, try to find commonalities that help the donor connect with you. The more you do this, the more likely you will get funding and increase your base of committed donors.
Then, of course, focus on revenue. Focus on that model as soon as you can. I certainly find it easier to work with a company and demonstrate value, than to ask funders for money. But some people prefer the fundraising. This is a leadership style choice.
It’s not that working with companies to generate revenue is easier than traditional fundraising. You still have a long outreach/sales process, and have to work very hard. But I like it because when you close a company, you are delivering value through a practical service. Funding usually occurs because the donor supports your idea in general. For me personally, I am more comfortable when clients are buying a socially conscious service. It confirms that UniversalGiving’s services provide value.
One note about your question above. You say, “When they have a big success… the funds seem to flow.” I don’t think we can ever rest on our laurels. Every day is a new day. I don’t know of any organization that consistently feels the funds just flow. We always have to work at it, cultivate relationships, hold to our standards, improve our products and services, and consistently focus on the long-term.
I will say that after five to eight years of doing the above, you can see ‘the flywheel effect’ that Jim Collins and Jim Porras talk about in Good To Great. After ‘pushing up the water’ on the water wheel, eventually, all the hard effort of pushing that water up begins to flow down the other side and gather momentum. Partnerships, press, and funding do come in abundance. That can certainly happen. Even still, we should maintain quality, a hard work ethic, and consistent devotion to excellence while the water is flowing!