How to Fundraise

for a Stronger Nonprofit

©Social Velocity

“Nonprofits that build robust infrastructure (like sturdy IT and financial systems, fundraising processes, and other essential

overhead) are more likely to succeed than

those that do not.”

- Ann Goggins Gregory & Don Howard, “The Nonprofit Starvation Cycle”

The Starvation Cycle

Funders Demand More for

Less

Nonprofit Skimps on

Staff, Systems

Nonprofit Is Less

Effective

Fewer People Served,

Changed

The Starvation Cycle

Funders Demand More for

Less

Nonprofit Skimps on

Staff, Systems

Nonprofit Is Less

Effective

Fewer People Served,

Changed

The Starvation Cycle

Funders Demand More for

Less

Nonprofit Skimps on

Staff, Systems

Nonprofit Is Less

Effective

Fewer People Served,

Changed

The Starvation Cycle

Funders Demand More for

Less

Nonprofit Skimps on

Staff, Systems

Nonprofit Is Less

Effective

Fewer People Served,

Changed

Overhead is NOT a Dirty Word

Overhead is NOT a Dirty Word

% of Dollars Spent on ProgramsFocuses on inputs, rather than impact

Overhead is NOT a Dirty Word

% of Dollars Spent on ProgramsFocuses on inputs, rather than impact

Compares apples to oranges

Overhead is NOT a Dirty Word

% of Dollars Spent on ProgramsFocuses on inputs, rather than impact

Compares apples to oranges

Forces nonprofits to “hide” infrastructure costs

Distinction is meaningless and destructive

Then...Overhead expense ratio

20%+ is unacceptable

Then... ...And NowOverhead expense ratio

20%+ is unacceptable

Financial healthFinancial ratings tablesFundraising efficiencyWorking capital ratioRevenue & expense growth

Accountability & transparency

Independent boardAudited financialsPolicies/proceduresInformation sharing

Results reportingAlign mission and $Results logic & measures

ValidatorsClient voiceEvaluations

Then... ...And NowOverhead expense ratio

20%+ is unacceptable

Financial healthFinancial ratings tablesFundraising efficiencyWorking capital ratioRevenue & expense growth

Accountability & transparency

Independent boardAudited financialsPolicies/proceduresInformation sharing

Results reportingAlign mission and $Results logic & measures

ValidatorsClient voiceEvaluations

Money

Core Competencie

sMission

Connect Mission & Money

Financing is...

A long-term strategy for bringing enough money in the door to achieve

your mission.

Financing is...

A long-term strategy for bringing enough money in the door to achieve

your mission.

How much can we accomplish with what we can raise?

Financing is...

A long-term strategy for bringing enough money in the door to achieve

your mission.

How much should we raise to accomplish our goals?

How much can we accomplish with what we can raise?

Board, Staff,

Donors

Money Strategy

Infrastructure

Sustainability

Funding Sources

Programs

Message

Fundraising Vs. Financing

Worn out Excited, engaged

Annual, programs Long-term, all costs

Inadequate Fully funded

Weak

Few

Strong

GrowingFlat or declining

Diverse, Robust

Community changeNeed

Board, Staff,

Donors

Money Strategy

Infrastructure

Sustainability

Funding Sources

Programs

Message

Fundraising Vs. Financing

Worn out Excited, engaged

Annual, programs Long-term, all costs

Inadequate Fully funded

Weak

Few

Strong

GrowingFlat or declining

Diverse, Robust

Community changeNeed

Board, Staff,

Donors

Money Strategy

Infrastructure

Sustainability

Funding Sources

Programs

Message

Fundraising Vs. Financing

Worn out Excited, engaged

Annual, programs Long-term, all costs

Inadequate Fully funded

Weak

Few

Strong

GrowingFlat or declining

Diverse, Robust

Community changeNeed

Board, Staff,

Donors

Money Strategy

Infrastructure

Sustainability

Funding Sources

Programs

Message

Fundraising Vs. Financing

Worn out Excited, engaged

Annual, programs Long-term, all costs

Inadequate Fully funded

Weak

Few

Strong

GrowingFlat or declining

Diverse, Robust

Community changeNeed

Board, Staff,

Donors

Money Strategy

Infrastructure

Sustainability

Funding Sources

Programs

Message

Fundraising Vs. Financing

Worn out Excited, engaged

Annual, programs Long-term, all costs

Inadequate Fully funded

Weak

Few

Strong

GrowingFlat or declining

Diverse, Robust

Community changeNeed

Board, Staff,

Donors

Money Strategy

Infrastructure

Sustainability

Funding Sources

Programs

Message

Fundraising Vs. Financing

Worn out Excited, engaged

Annual, programs Long-term, all costs

Inadequate Fully funded

Weak

Few

Strong

GrowingFlat or declining

Diverse, Robust

Community changeNeed

Board, Staff,

Donors

Money Strategy

Infrastructure

Sustainability

Funding Sources

Programs

Message

Fundraising Vs. Financing

Worn out Excited, engaged

Annual, programs Long-term, all costs

Inadequate Fully funded

Weak

Few

Strong

GrowingFlat or declining

Diverse, Robust

Community changeNeed

Board, Staff,

Donors

Money Strategy

Infrastructure

Sustainability

Funding Sources

Programs

Message

Fundraising Vs. Financing

Worn out Excited, engaged

Annual, programs Long-term, all costs

Inadequate Fully funded

Weak

Few

Strong

GrowingFlat or declining

Diverse, Robust

Community changeNeed

RevenueOngoing

Supports day-to-day

BUYS services

Beds for a homeless shelter

A Money Distinction

RevenueOngoing

Supports day-to-day

BUYS services

Beds for a homeless shelter

Vs. CapitalOne time

Supports

BUILDS organization

Technology, evaluation, development staff

A Money Distinction

Capacity Capital BUILDS a Nonprofit

TechnologySystemsPlanningDevelopment staffTrainingLeadership development

Nonprofit lacks infrastructure

Capacity capital strengthens the nonprofit

Nonprofit achieves more outcomes, impact

Nonprofit lacks infrastructure

Capacity capital strengthens the nonprofit

Nonprofit achieves more outcomes, impact

Nonprofit lacks infrastructure

Capacity capital strengthens the nonprofit

Nonprofit achieves more outcomes, impact

But raising Capacity Capital

requires your nonprofit to have a

Theory of Change

Community Resources Nonprofit

Community

change

The Theory of Change

Community Resources Nonprofit

Community

change

The Theory of Change

Community Resources Nonprofit

Community

change

The Theory of Change

Inputs ($, kids, tutors, staff)

Activities (provide

literacy tutors to

at-risk kids)

Outputs (# kids, #

hours)

Outcomes (better

reading, better scores)

Impact (stronger schools, educated citizens,

economic parity)

The Theory of Change

Inputs ($, kids, tutors, staff)

Activities (provide

literacy tutors to

at-risk kids)

Outputs (# kids, #

hours)

Outcomes (better

reading, better scores)

Impact (stronger schools, educated citizens,

economic parity)

The Theory of Change

Nonprofits usually

stop here

Inputs ($, kids, tutors, staff)

Activities (provide

literacy tutors to

at-risk kids)

Outputs (# kids, #

hours)

Outcomes (better

reading, better scores)

Impact (stronger schools, educated citizens,

economic parity)

The Theory of Change

Nonprofits usually

stop here

But this is where it

gets really compelling

Young Readers brings at-riskstudents to grade level in reading, resulting in:

More succeeding students

Better schools

A more educated workforce

A more equitable economy and community

Begging

“With your support, we can provide more tutors for children.” 

Investing

With your support, children…Learn to read at grade level by 3rd grade

Investing

With your support, children…Learn to read at grade level by 3rd grade

Which leads them to… Do better in school

Graduate from school

Succeed in life and work

Investing

With your support, children…Learn to read at grade level by 3rd grade

Which leads them to… Do better in school

Graduate from school

Succeed in life and work

As our partner, you help create…More contributing citizens

Lower social costs

A stronger, healthier community

$350K in Capacity CapitalNew donor database

Online giving software

Staff

Training

Market research

Marketing materials

Case Study

$350K in Capacity CapitalNew donor database

Online giving software

Staff

Training

Market research

Marketing materials

ResultsAnnual revenue up $1.6 M (40%)

Number of donors up 36% to 19K+

Case Study

1. Create a capacity building plan

4 Steps to Raising Capacity Capital

1. Create a capacity building plan

2. Develop a capital goal

4 Steps to Raising Capacity Capital

1. Create a capacity building plan

2. Develop a capital goal

3. Create a pitch

4 Steps to Raising Capacity Capital

1. Create a capacity building plan

2. Develop a capital goal

3. Create a pitch

4. Find prospects

4 Steps to Raising Capacity Capital

1. Create a Plan

1. Create a Plan

What must change in your organization? Goals

1. Create a Plan

What must change in your organization? Goals

Over what timeframe? Timeline

1. Create a Plan

What must change in your organization? Goals

Over what timeframe? Timeline

What are the steps to get there? Tactics

2. Develop a Capital Goal

2. Develop a Capital Goal

What must change?Better technology and systems

Long-term planning

Development staff

Leadership coaching

Board training

2. Develop a Capital Goal

What must change?Better technology and systems

Long-term planning

Development staff

Leadership coaching

Board training

What will it cost?

# of Gifts

Gift Amount

Total $s

# of Prospects

Lead Gift 1 $15,000 $15,000 4

3 $10,000 $30,000 12

5 $5,000 $25,000 20

8 $2,500 $20,000 24

10 $1,000 $10,000 20

TOTAL 27   $100,000 80

$100K Capital Goal

# of Gifts

Gift Amount

Total $s

# of Prospects

Lead Gift 1 $15,000 $15,000 4

3 $10,000 $30,000 12

5 $5,000 $25,000 20

8 $2,500 $20,000 24

10 $1,000 $10,000 20

TOTAL 27   $100,000 80

$100K Capital Goal

# of Gifts

Gift Amount

Total $s

# of Prospects

Lead Gift 1 $15,000 $15,000 4

3 $10,000 $30,000 12

5 $5,000 $25,000 20

8 $2,500 $20,000 24

10 $1,000 $10,000 20

TOTAL 27   $100,000 80

$100K Capital Goal

# of Gifts

Gift Amount

Total $s

# of Prospects

Lead Gift 1 $15,000 $15,000 4

3 $10,000 $30,000 12

5 $5,000 $25,000 20

8 $2,500 $20,000 24

10 $1,000 $10,000 20

TOTAL 27   $100,000 80

$100K Capital Goal

# of Gifts

Gift Amount

Total $s

# of Prospects

Lead Gift 1 $15,000 $15,000 4

3 $10,000 $30,000 12

5 $5,000 $25,000 20

8 $2,500 $20,000 24

10 $1,000 $10,000 20

TOTAL 27   $100,000 80

$100K Capital Goal

# of Gifts

Gift Amount

Total $s

# of Prospects

Lead Gift 1 $15,000 $15,000 4

3 $10,000 $30,000 12

5 $5,000 $25,000 20

8 $2,500 $20,000 24

10 $1,000 $10,000 20

TOTAL 27   $100,000 80

$100K Capital Goal

# of Gifts

Gift Amount

Total $s

# of Prospects

Lead Gift 1 $15,000 $15,000 4

3 $10,000 $30,000 12

5 $5,000 $25,000 20

8 $2,500 $20,000 24

10 $1,000 $10,000 20

TOTAL 27   $100,000 80

$100K Capital Goal

3. Create a Pitch

3. Create a Pitch

PlanWhat is your plan for building capacity?

3. Create a Pitch

PlanWhat is your plan for building capacity?

BudgetWhat do you need and what will it cost?

3. Create a Pitch

PlanWhat is your plan for building capacity?

BudgetWhat do you need and what will it cost?

Projected ROIWhat will the results be?

More productivity?More revenue?More outcomes?

4. Find Prospects

4. Find Prospects

3 Criteria

4. Find Prospects

3 CriteriaCapacity: to give at the needed level

4. Find Prospects

3 CriteriaCapacity: to give at the needed level

Connection: to a peer at the nonprofit

4. Find Prospects

3 CriteriaCapacity: to give at the needed level

Connection: to a peer at the nonprofit

Concern: for the mission

4. Find Prospects

3 CriteriaCapacity: to give at the needed level

Connection: to a peer at the nonprofit

Concern: for the mission

Start Inside & Move OutBoard of Directors with capacityMajor Donors Other “Friends” (volunteers, advisors)Foundations/individuals

Learn More…

Launch a Capacity Capital Campaign

Step-by-Step Guide

Learn More…

Launch a Capacity Capital Campaign

Step-by-Step Guide

Download Here

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