12 Step Program...

Step Ten

Financing the Organization

Now that the CMC is up and running, the question that needs to be answered is, "Where do you find the money to finance your dreams?" Two areas need to be addressed at this time: grants and building a donor base.

The Danger of Depending Solely on Grants
Of all the money given in a single year by corporations, individuals, foundations, and through bequests, foundation giving accounts for approximately five percent. Corporate giving is another five percent, gifts through bequests are another ten percent, and individual giving accounts for the remaining 80 percent. Foundations are not where the money is.

Foundations like to fund new, start-up programs or special projects. More often than not, they will not give large sums of money for ongoing operating costs. If they fund a project, they want to know where the money will come from in subsequent years, because it will not be coming from them.

The current success rates for grants is approximately seven percent. That means that 93 percent of all requests to foundations are turned down. Before applying for a grant, do the necessary research. Resist the temptation to use the shotgun approach to grant writing. Only apply to foundations who have a track record of funding the programs that your organization is proposing.

The longer you rely on grants and ignore building your base of individual donors, (or friendship lists), the more project-oriented and dependent you will be. The mistake that is so often made is to fashion programs after available grants. When this mistake is made, strategizing your programs based on what money is out there, it allows the grant-makers to design your programs based on their values and whims, not your vision and mission.

Build a Solid Long-lasting Donor Base
Why we get involved in the organizations we do, why we choose certain people for our friends, and ultimately, why people give to an organization, is because we have a self-interest in doing so. In other words, self-interest is a given, a constant; it's always there in the driver's seat. The sooner you discover and begin interacting with people's self-interests, the sooner you can customize your needs to their desires, to make them a perfect fit. Build your donor base by getting acquainted with individuals who agree with your program.

Why People Give
Chances are that the reasons people give are: believe in the cause, peer pressure, good for business, to give back for services received, to change the world, status, recognition, feels good, tax deduction, build community, vicarious artistic pleasure, guilt, fear, etc. Regardless of their motive, we need to remember to ask for the gift.

The bottom line is: PEOPLE GIVE BECAUSE THEY ARE ASKED. The old cliché of fundraising is still true: "The right person has to ASK the right person for the right amount at the right time."

Suggestions for Further Reading

Burlingame, Dwight and Lamont Hulse. Taking Fund Raising Seriously: Advancing the Profession and Practice of Raising Money. Jossey-Bass Publishers, 1991.

Cutlip, Scott M. Fundraising in the United States. Transaction Press, 1990.

Lindahl, Wesley. Strategic Planning for Fund Raising: How to Bring More Money Using Strategic Resource Allocation. Jossey-Bass Publishers, 1992.

Mixer, Joseph R. Principles of Professional Fundraising: Useful Foundation for Successful Practice. Jossey-Bass, 1993.

Russo, Henry A. & Associates. Achieving Excellence in Fund Raising. Jossey-Bass Publishers, 1991.

Selzer, Michael. Securing Your Organization's Future: A Complete Guide to Fundraising Strategies, Foundation Center, 1987.