INN Development Director Lawrence Horne, who has more than three decades of fundraising and nonprofit management experience, offers this advice to startups.
Thousands of resources exist to help nonprofits find and keep track of prospective funders, leaving many startups unsure where to begin. First you must realize that fundraising has no magic wands or silver bullets. You must come up with a methodical, organized approach appropriate to your own situation. It’s a three-step process:
Evaluate your potential sources of support
Make lists of all the possible financial supporters in your own space, working from your inner circle outward. Approaching well-known national foundations is not a realistic starting point. Readily available donors are more likely to be found in your own community or state. Once you have a robust list, you can evaluate which prospects are most available. That research and vetting process, which journalists are well-equipped to perform, will help you prioritize your development efforts.
Decide how to track your development work
A Google search for “basic fundraising tracking form” will give you a wide variety of choices, many of them free. If you are adept at developing your own databases, you can peruse the forms you see online to decide what data fields to include. If you have only basic spreadsheet skills, and decide to download a template ready-made to use in software such as Microsoft Excel, it is wise to customize it to your needs. Thinking like a journalist, ask yourself what information you’ll need to get out of your records in the future. For example, your current funders may all be local, but you may soon wish you had a “state” column in your spreadsheet, because of legal requirements to register for accepting donations in other states.
You will find plenty of advice online suggesting that you need to buy or license database software to manage your development. Companies such as Salesforce, a software service provider worth more than $20 billion, provide powerful tools for customer relationship management (CRM) that are beyond the needs of a startup. Blackbaud Raiser’s Edge and DonorPerfect are examples of fundraising and relationship management software designed for nonprofits. Startups may find themselves investing in CRM software at some point when basic lists and spreadsheets are no longer doing the job.
Even if you have only a few funders now, plan ahead to break your lists into types of donors. Our section on revenue models explained the different sources such as membership, subscriptions, grants and major gifts. Decide how to segment and label these resources in your spreadsheet or database. For example, you may set the cutoff between “individual donor” and “major donor” at $250 per year or $5,000 per year. Many organizations decide that $500+ or $1,000+ should be considered major gifts. You should list foundations and community sources of support in ways that help you prioritize your outreach to them, for example, dates that grants expire and deadlines for applications.
Institute your tracking system
Once your tracking process has been established, use it systematically to expand your development efforts. The minute anyone expresses any interest in your work, the contact should be recorded and placed into your fundraising tracking tool. You’ll want to have a process to follow up with possible new supporters and to contact them through their preferred channels.
Some prospects identify themselves to you by following you on social media, signing up for your newsletters, registering on your website or attending your events. If you are a news nonprofit that distributes content through other publishers, you should always seek opportunities to make your funding needs known to the audience you reach. You can embed links to your own website or social media channels.
Try to work out mutually beneficial exchanges of donor or subscriber lists with similar organizations to grow your pool of funding prospects. Nobody is likely to hand over a list just because you ask. But the more systematic you have been in making your own tracking tools, the more likely you are to have something worthwhile to exchange. Your tracking prowess also will give you data to show institutional funders and major donors why you are worthy of their support.