< Back to Search

CCF/SCF Tools Value-Driven Donor Development

Published: September 14, 2012
Audience:
Strengthening Communities Fund (SCF), Compassion Capital Fund (CCF)
Category:
Guidance, Policies, Procedures, Tools

 

 

Overview

1. Reframing Your Approach: The Problems With Fundraising

 

Convincing a donor of your way of thinking is difficult to do.

Traditional fundraising focuses on changing minds to create believers. Most nonprofits believe in what they do – on the need that exists and the solutions offered. When walking into a meeting with a potential funder, the aim is to convince the donor of a particular way of thinking, and to have them invest accordingly. The problem with this approach is that it is difficult to lure someone away from the priorities, beliefs, and values they already subscribe to and are being paid to uphold.


When you build your case to a generic audience, you end up speaking a different language than the donor.

The language used to describe a program tends to be generic in the sense that the same description is cut and pasted into every grant proposal (and into every conversation). The problem with this is that the terminology used to describe your mission, values, or outcomes may be significantly different from the terminology the donor uses to articulate its mission and priorities. You end up speaking two different languages, and relying on the donor to translate your proposition into something the funder cares about. The moment you expect a funder to connect the dots for you is the moment you’ve put all of your hard work at risk.

 

By focusing too heavily on what you need, you may lose sight of what you are offering to the foundation.

Rather than asking for a handout, offer an opportunity. Investing in your program is an opportunity for foundations to fulfill their mission. The challenge with making this case is that you really have to understand what funders want to accomplish, and be able to articulate how that aligns with your work.

2. The Value-Driven Donor Development Approach

As an intermediary, you are in a unique position to offer value to both nonprofits and foundations.

As an intermediary, you are the hollow groove of the hourglass. For nonprofit providers (the bottom half of the hourglass), your special access to foundations, along with your experience developing donors and writing grants, can connect them with funding opportunities. For foundations (the upper half of the hourglass), your knowledge of who is doing innovative and effective work in the nonprofit sector, along with your ability to design TTA plans targeted to their grantee’s needs, can connect them with effective nonprofits.


 

The value-driven approach to donor development seeks to align what funders want with what you have to offer.

The value-driven approach requires that you customize your pitch – using language that the donor understands, framing your work as an opportunity for the donor to fulfill their mission. This lesson will walk you through a simple three-step process to transform your development strategy.


    3.  Listen, Identify

 

Before you can figure out how to approach a foundation or potential donor, you need to do your research.

When conducting research, there are two basic questions that you need to answer:

    Which foundations/donors align with my program’s areas of expertise?
    For each foundation I’m interested in, how do they describe their mission, and what are their concerns and priorities?

In answering these questions, you are trying to figure out what value you can add so you can package what you offer in a way that is palatable and interesting to the funder. There are a number of online resources that can help connect you with potential donors as well. A good place to start is the "Nonprofit Fundraising and Grantwriting Page" of the Free Management Library located here.


Outlining the central elements of a funding opportunity helps structure fundraising efforts.

There are a number of aspects related to each potential funder that you should chart. The first is the foundation’s "Funding Priorities." This describes the types of work that most interests the funder. As you identify these priorities, make sure to document them using the same language as the funder. Next, identify the "Areas of Alignment" – both in terms of services and region – between the nonprofit and the potential funder. Finally, generate additional questions you would ask the funder at a potential meeting.


 4. Understand Your Value

 

After you understand your target foundation’s priorities and concerns, determine how to position your services as a value-add that the funder wants to invest in.

You should be able to articulate why funding a particular set of services represents an opportunity for the funder. As a purely practical matter, funders are interested in hearing what you can do for them. Be able to clearly answer that question in the form of a value statement.


Outline how your services match with the funder's priorities to create a value statement.

First, identify the funder's priorities using their language, and dig as deep into their philosophy as you can. Describe the services you offer, allowing yourself to be creative in how you slice and dice your work. For instance, include work you could offer if you teamed with the right partner. Finally, create a value statement that serves as an opportunity to practice framing your value in language the funder will connect with. Be specific and realistic – a funder will not respond well if you promise more than you can deliver.


 5. Capture the Concept

 

Concept papers easily communicate your value-add.

When you hand out a concept paper to a room, recipients should immediately understand who you are, what you do, and why that should be of interest to them. The most important points to communicate in a concept paper are the outcomes you will achieve and the value those outcomes will add to a funder’s mission. Concept papers should entice a potential funder to want to know more.


Communicate main points simply, while using an assortment of visual aids.

Concept papers are skimmed, not read. Someone should be able to interpret the main points of this document while you speak to them. A successful concept paper uses a limited amount of text, puts important points in bold, and employs a lot of graphics. The reader's attention should be drawn to points that declare, "This is an opportunity for you, funder!"