For most nonprofit organizations, the economic downturn that began more than a year ago has made it increasingly difficult to find the funds needed to sustain current staffing levels and operations – and ultimately service.
According to the Foundation Center, the instability of global financial markets has made fundraising by nonprofits increasingly challenging as donors can no longer give as generously as in the past. Add to this a nosediving stock market, and you realize that foundations also may be forced to reduce their grantmaking, as their endowments shrink.
The same is true for corporate giving, which a late summer Chronicle of Philanthropy report said would remain flat or decrease. Just a few weeks and a Wall Street meltdown later, the Boston Globe reported that struggling or acquired financial firms without a separate charitable foundation will decrease or even stop giving entirely.
The same article reported that loss of such giving giants as Merrill Lynch & Co. and Lehman Brothers and disappointing sales by Macy’s, CVS and other generous corporate givers is already being felt by nonprofits.
But in the midst of this gloomy news, nonprofit organizations can weather the recession and even prosper, according to Roger Sametz, president and founder of Sametz Blackstone Associates, by strengthening their brands and diversifying their fundraising.
Don’t Rely on the One Strategy Approach
According to Sametz, most nonprofit organizations rely too heavily on just a few ways to raise revenue. This is not a path he would advise in good economic times and certainly not in the current marketplace.
“Whatever your historic mode of support has been, it’s probably not diverse enough,” says Sametz. “No matter what your size, understand that if you’ve been dependent on foundation grants or if you’ve been dependent on something you can sell, great. But you need to think about the three, four, five different ways that you can diversify your income stream.”
Of course, using only a few methods to raise funds is understandable, because most nonprofits have limited amounts of time – and staff – to devote to fundraising.
Perhaps the key fundraiser in your organization is the executive director. And maybe she or he understands how to approach foundations but doesn’t know how to develop a major giving program. Maybe there is a development director who has significant experience with corporate giving but doesn’t have as much experience with making the “ask” with foundations.
But despite staff or budget limitations, your nonprofit organization can increase fund-raising success.
Diversify Your Fundraising
The key to increased fund-raising success is diversifying your nonprofit’s income stream. However, says Sametz, realize that you will need different skill sets for different fund-raising methods. He suggests that once you understand the need for diversification, you should:
- Decide which fund-raising methods you will pursue
- Figure out what additional skills or people are needed to have success with these fund-raising approaches (staff and volunteers)
- Look at how the concept of brand supports your fund-raising efforts
The Role of Brand in Fundraising
“The concept of brands is very important for nonprofit organizations,” says Sametz. “Historically, there was this notion that it [brands] was about toothpaste or blue jeans, and not relevant [in the nonprofit sector].”
But a nonprofit’s brand is really a succinct way to get across what you mean, what your value is to a constituent group, what you promise, and ideally what you deliver to the group. It is about the attributes you want people to associate with your organization.
If successful fundraising requires you to use diverse strategies, strengthening your brand allows you to more rapidly connect with a more diverse set of potential funders.
What Makes Your Nonprofit Unique
For example, if you approach a foundation for funding, they want to know what organizational attributes make you an appropriate match for their strategic giving. Corporate funders and individual donors want to know which nonprofit organization most closely reflects their values.
When dollars are tight, as they are now in a recession, you want potential funders to easily and quickly understand what makes your organization uniquely qualified for their support.
“A foundation, given two proposals that are equally sound to do x or y in a community, is going to be heavily influenced by what that organization is about,” explains Sametz. “One organization will get funded and the other won’t, and a lot of that is brand.”
Sharing the Emotional Component
Brand also gets across the emotional component of what your nonprofit is all about. It helps donors to understand your mission, the benefits of your programs and the way you deliver on your promises.
According to Sametz, in many ways brand is like fund-raising shorthand. You don’t have to begin your conversation with potential funders by explaining what you do, why and how you do it, and what you accomplish. “You start that conversation at square two and not minus one,” he says. “You won’t have to explain why you’re not like the guy they are confusing you with.”
Components of Your Nonprofit Brand
An important part of your organization’s brand is its high level message. Nonprofit organizations, says Sametz, tend to be program focused and may not have a strong central message to convey to funders. This means that an organization will miss an opportunity to sell from the brand down versus from an individual program up. You miss the high-level visibility which is important for capturing significant funding.
Once you have developed a high level message, then you want to develop the more targeted messages that will resonate with various constituencies. Sametz refers to this next tier of messaging as “the ways in.”
For instance, one of Sametz clients, an environmental group, understood that its core constituents cared about birds. But research showed that a lot of people cared about global warming and educating children to be stewards of the land, and these potential donors did not know that the client excelled in these areas.
The client clarified its brand with this new information, and expanded its messaging accordingly to speak to the various constituencies. As the client approached each constituency for funding, it shared with them the organizational, or high level, message, and then the conversation quickly moved to the targeted message.
This helped the client diversify its income stream, bringing new donors into the organization around programs it had long championed but which few outside the noprofit had known existed.
How to Develop Your Nonprofit's Brand
How do you develop or strengthen your brand and its components, especially when your nonprofit has limited staff and financial resources? According to Sametz, it is useful if you can enlist the support of an organization or company such as his, but your staff can do this work themselves with time and effort.
First, do your research. Start by listening to people, board, staff, constituents, even competitors. There will be threads that go across all groups.
You can do quantitative research, which Sametz says is good for finding out what a number of people think about your brand, and qualitative research to get an in-depth understanding of current and potential donor’s perceptions about your nonprofit.
Both of these can be done at low cost.
Low and Lower-Cost Quantitative Research Methods:
- Online web surveys: These require email addresses, but can be done at a low cost.
- Phone surveys: These are more expensive, but you get both qualitative and quantitative results. You are assured of getting the most appropriate person to speak with about your nonprofit.
Low and Lower-Cost Qualitative Research Methods:
- Have face-to-face conversations over tea with individual donors.
- Host informal or formal focus groups, face-to-face conversations over tea with groups of donors.
- Facilitate conversations with trustee
- Facilitate conversations with and staff.
“We meet with people – trustees, donors, etc. – all the time,” says Sametz. “You hear the many different ways that people are connected to your organization.” He and his clients receive valuable information and are sometimes pleasantly surprised at how frank and insighful individuals in one-to-one and group meetings.
He advises that for group meeting avoid meeting with groups of more than 30, since “you usually hear the same information after speaking with 15 or so people.”
“A few years ago, any kind of market research was prohibitive, and people didn’t believe that they needed to have tea,” he laughs. Now you can build a good foundation for your brand with an online web survey, 20 chats and some testing.
Expanding Your Brand
Other ways to build your brand, connect with new donors in order to diversify your funding stream include:
- Training your board and staff to share your high level and targeted messages clearly.
- Developing a visual system that ties it all together, such as a portfolio of ideas and initiatives that build recognition. This is important when going out to meet with donors. You want them to see your logo and materials, and immediately connect them to you. Remember that production costs are the same or even less after the upfront costs. It is worth the cost, and there are even some opportunities for funding or pro bono services.
- Lastly, evaluating at every step.
“Organizations often make the mistake of crafting their high level and targeted messages and developing the visual component of their brand in their conference room without checking this against what the outside world thinks,” says Sametz. He advises that you get feedback on a regular basis and freshen your brand as you add new programs, change high level staff members, etc.
Keeping your brand strong is closely ties with your ability to diversify your funding stream – especially during these challenging economic times. So keep your eye on your brand, and look at new ways to raise funds with a strong message and energized team.