Types of Funding Pitches
Here are framing devices or pitch types we often use to rationalize the ASK. In an abridged form:
The Gap: Using a gap number to justify the ASK.
- Tuition: Tuition is $6K, cost per student is $8K. Gap is $2K. Could ask someone to underwrite THE GAP for five students.
- Project: Receive federal grants to the tune of $45K/year for $60K/year program. Ask someone to fund the gap for three years = $15K/year or $45K ASK.
Leverage: We need to raise X to generate 10X.
For example, if you need $10,000,000,000 you can go out and ask for the first $1M to help you leverage the remaining amount.
The Widget: Break down projects/programs/model into a cost per person or cost per unit. Package this as the ASK. Typically, I use the widget to create the simplest and strongest sell.
- “One kid for one year.”
- See also: See Chipotle vs. Max and Erma’s
Funding the Prototype: This is a different way of funding your annual operating budget for a start-up. Communicate how your model works and what is needed to make the model happen… can then run a funding pyramid.
Example: This year we need $1M to build the prototype and we’ll need:
1 @ $200K
2 @ $100K
3 @ $75K
4 @ $50K
6 @ $25K
Funding the Vision: Think of this as funding the model/prototype and future projects/priorities for the next 3-5 years. If you will, this is ‘the campaign pitch’ but with a more holistic view of ALL funding priorities. Within Funding the Vision:
- Leadership Commitments: Top tiered commitments that validate the funding plan.
- Momentum Commitments: TIMELY gifts. Could be Leadership or not… but means so much because of the timing. Provides a lot of leverage, energy, etc.
TRANSFORMATION: Justifies all caps on this one. Sometimes it’s simply about a number that would completely TRANSFORM your organization, the investor, etc. This is a rationale that extends far beyond a ‘campaign lead’.
Project Sponsorship: “Can you underwrite the medical program for three years @ $30K/year?”
- Note: If it were me… get rid of the notion of asking people to fund ‘operating’ or ‘infrastructure’. Literally everything you do can be packaged as a project, priority or program.
Angel Investment: “We’re going to need 10 investors at X to get this idea off the ground. We’re taking something of an angel-investment type-approach. Can you be one of these angels?” – Very much about timing, the level, and the funder.
Strategic Partner: Often a corporation or foundation that provides ongoing, high-level funding support on an ongoing basis. It’s a great relationship because you [the org] are a means of delivering on the funder’s priorities in the community or sector.
Protection: This is a rationale or way of asking someone to ‘protect’ and annual investment with a planned gift/legacy gift. More on that here.
Obviously, you don’t need all of these. I’m hoping the brief descriptions can spark some answers to common questions like:
- “What do we ask for?”
- “How do we package our operating to justify a big ask?”
- “How do we rationalize the number?”