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Daily Nuggets: A For Impact Blog

Maximizing Relationships Requires a Funding Rationale


The absence of strong Funding Rationales (a.k.a. your reason for needing funds) likely means your organization is not maximizing relationships.

At a major-gifts level* there needs to be some specificity in terms of funding a specific program, outcome, or priority initiative. (See 10 Types of Funding Rationales).

If you don’t have a specific Funding Rationale then one of two things usually happens:

  1. The commitment is not maximized.

    People give to support a mission or a cause, and they invest more to support specific impact (or outcome).  Our experience has been that a portfolio gives 3x more when you’re able to clearly define a strong funding rationale!!!  

    This is the difference between asking,”Will you invest $10K in our vision?”  And, “Will you invest $10K to help with this priority and these outcomes that will help us deliver on the vision?”
  2. Funders (over) restrict the funding.

    When we see this, it’s an indication that the funder is creating a rationale because yours is not clear enough!

    Note: While restricted funding is not bad in and of itself, gifts committed with restrictions crafted by the funder hinder an organization’s efficiency or focus. Said another way, if you don’t define your priorities/rationales then someone will do it for you.

*For most organizations this is $10K+ and could come from an individual, corporation, or foundation.

Set Your Goals for Engagement!


A few weeks ago we published “10 Action Steps to Help you Engage in 2016.” Over the next 10 weeks, we are going to use each action step as a week long theme to help you get it done!

This week’s theme is: Set your goals of ENGAGEMENT.

Set your 2016 Goals for Engagement now! These goals need to be SPECIFIC, WRITTEN and MEASURABLE.

Here are 3 Examples:

  • The ‘33 GIFTS’ Plan

    We will ENGAGE with our TOP 50 PROSPECTS in order to generate 33 COMMITMENTS, which will provide 90% of our funding needs!

    This will be a SELF-FULFILLING PROPHECY.

    E.g. We will generate $1 Million from:

    1 Gift of $200,000
    2 Gifts of $100,000
    4 Gifts of $50,000
    10 Gifts of $20,000
    16 Gifts of $10,000+
    33 Totaling $1 Million

    Note: Need $5M? Multiply the right column by 5. (Or 4 for $4M and so on.)

  •  

  • The ‘Spartan 300’ Plan

    We will ENGAGE with our BEST 300 prospects (including our Top 33), which will generate buckets of money to Fund Our Vision.

    E.g. We have 3 members of our SALES TEAM, and we will collectively make 30 VISITS ENGAGEMENTS a month for 10 months (using August and December for R&R).

    We will use a 3x3x3 goal which challenges us to collectively make 3 visits a day, 3 days a week, 3 weeks out of the month.

    Note: If you have one member of your sales team, divide this goal accordingly: The ‘Spartan 100’ plan!

  •  

  • The ‘1,000 ENGAGEMENT’ Plan

    As a larger For Impact organization with 6 committed Relationship Managers, we will make 1,000 VISITS/PRESENTATIONS this year.

    Each of our 6 Relationship Managers will have a Portfolio of 300 Qualified Prospects. Each of us will make 167 VISITS/PRESENTATIONS (ENGAGEMENTS) this year.

    We will average 15 QUALITY VISITS a month and do all of the appropriate preparation, predisposition and follow-up.

    We will do ‘DISCOVERY’ on every visit and with every prospect. We also commit to make the FULL PRESENTATION around the TRIPLE ASK for TODAY, TOMORROW and FOREVER (Annual Operations, Campaign Priorities and a Legacy/Planned Gift.)

    *20% of these 167 visits will become our TOP 33 gifts for each Relationship Manager.

Your Funding Plan Supports Your Case


A few weeks ago we published “10 Action Steps to Help you Engage in 2016.” Over the next 10 weeks, we are going to use each action step as a week long theme to help you get it done!

This week’s theme is DO THE MATH.

A big epiphany for organizations we work with continues to be – your funding plan actually is part of your case for support.

To me, the funding plan is the HOW behind the big picture dollar goal and the big picture dollar goal is what you need to deliver on your vision. So, in essence, this is HOW you will deliver on your vision. Is that important? You bet!

I’ve found that most organizations don’t have a funding plan – They haven’t done the math.

Three simple action steps to get you there:

  • Determine the dollar amount you need for both operations and projects. What is the lump sum? 80% of organizations can’t answer this question.
  • How many investments would you need and at what amounts to achieve this goal?
  • When? (One year? Three years? Five years?)

The funding plan does a few things as it relates to your case:

  • It makes it believable and achievable.
  • It shows a potential investor how she/he would fit into the funding vision.
  • It also illustrates that you’re not just picking a number out of the air – there is logic – Which gives you and your investors confidence.

Extra bonus: There are times when you can actually ask the potential investor, “Where do you see yourself in this plan?” Then, you let them select a dollar level – Something we call “The Clueless Close.”

Do the Math to Simplify Your Funding Story


A few weeks ago we published “10 Action Steps to Help you Engage in 2016.” Over the next 10 weeks, we are going to use each action step as a week long theme to help you get it done!

This week’s theme is DO THE MATH.

Doing the Math means owning and internalizing an understanding of your numbers. Your numbers tell an important part of your story.

Doing the Math also means taking the time to simplify the numbers in a way that others – Your board, your prospects and your staff – can understand.

In our For Impact World you must:

DO THE ‘BLUE‘ MATH around your Cause and Case and Impact. i.e. How many people/families/students/patients/kids do you impact? Or how many people/families/students/patients/kids NEED this impact?

DO THE ‘RED’ MATH around your Staff, People and Operations.
i.e., What are the people or operational costs associated with delivering your current or desired impact?

And DO THE ‘GREEN’ MATH around your Income, Funding Plan, Goals, etc.
i.e, What is your total need for the year or next 1,000 days based on the BLUE and RED and how will you get there?

Note: Here is a list of questions you can ask your CFO or CEO to get the information you need for math.

Next, use this Math to frame your Funding Rationales. Funding Rationales help to answer your Prospect’s question, “What do you need from me?” and help you get ‘numbers on the table’ tied to a Person, a Program, a Project or a Funding Plan. For example:

A unit of Impact.

One of the simplest ways to do your math is around a Unit of Impact – A Person, A Student, A Family, A Village, A Patient – You get the idea. Quick math:

You can use this math to ask a prospect, “Can you help us by underwriting 10 students this year?” or “How many students would you like to underwrite this year?”

Your Gap, or even better, the cost of EXTRAORDINARY Impact.

Gap math is a common way to do your math and simplify a funding rationale.

 

 

I recently worked with a fantastic Hospice organization who refuses to talk about the gap and instead asks prospects to fund Extraordinary Care for every family. This Hospice has (fluctuating) revenues from reimbursements, but they don’t cover everything. This is where philanthropy comes in – For $1000 you can underwrite Extraordinary Care for one of the 3000 families they serve each year.

The true cost of programs.

This is a big one. Organizations frequently underestimate the true cost to deliver a program, which is essential to a funding rationale. Knowing the real numbers boosts confidence in the ask and helps the funder buy in. You can ask someone to underwrite part or all of the program.

Along with the previous point, you can do the math to tie programming costs to impact in multiple ways. Here’s a clean and simple example to illustrate the concept using the example above. The Read Aloud Program impacts 1600 Kindergarteners and their families (80 classrooms/20 students per class at 40 schools.) You can do the math to create simple funding rationales:

$80,000 to underwrite the program for one year, or;
$2,000 per school, or;
$1,000 per class, or;
$50 per student.

Funding a Project or Priority.

This is commonly used with a ‘campaign mindset’ – projects or priorities that have a larger funding goal than some of the examples above. Casting a vision, packaging up three year Priorities or Projects and then understanding a dollar amount/funding rationale for each.

For example, “As we discussed, our vision is to be there for every family who needs Hospice Care in this community. Part of achieving that plan is to secure a Hospice House where we can care for people who can no longer stay at home, or have no home. Can we talk to you about being part of this plan?”

or

“We’ve put together a plan to scale and innovate in our three core areas – Family Literacy, Read Aloud Programs and Teen Services – that would require $1.3M of the next 1,000 days. Here’s what we would use the funds for – 1000 Families in Literacy Program, increase 1:1 teen Mentoring by 30%, excellent data and evaluation, 5-10 new school relationships…”

(more…)

Creating Great Funding Rationales


A few weeks ago we published “10 Action Steps to Help you Engage in 2016.” Over the next 10 weeks, we are going to use each action step as a week long theme to help you get it done!

This week’s theme is BUILD YOUR FUNDING RATIONALE.

In this video we cover the ‘Last 3 Feet’ tied to Creating Great Funding Rationales (hint: “Unrestricted” does not make a great Funding Rationale!)

  • Create a Funding Rationale tied to a Unit of Impact if possible – “Our goal is to underwrite all 3000 of our families each year at $1500 per family. How many families can you help support?”
  • Package up your Programs – “Here is the Impact we’d like to have in each community and it will take about $100,000 per community to make it happen.”
  • Use a Leadership Circle membership goal as it relates to the Opportunity to Save, Change and Impact Lives – “When we have 50 members in our Leadership Society (@$10,000+ per year) it allows us to innovate new programs and provide core support to existing impact. It also allows us to move quickly when needed – To save and change more lives.”

Previous video in this sequence: Using Altitude to develop your Presentation.

How to Create a Funding Rationale Tied to Impact


A few weeks ago we published “10 Action Steps to Help you Engage in 2016.” Over the next 10 weeks, we are going to use each action step as a week long theme to help you get it done!

This week’s theme is BUILD YOUR FUNDING RATIONALE.

Essentially there are three ways to create a funding rationale – the three P’s. You can ask someone to invest in:

A PERSON

It would be more accurate to refer to this final rationale as a ‘unit’ but then I would lose alliteration. You can do the math to figure out the cost to impact one student, one class, one session, one exhibit, one visitor, etc. This could be a total cost or a ‘gap cost.’

A PROGRAM

This could include seed funds to launch a program, sponsorship for a program or gap funding for a program. The cost of the program is set against the impact of the program – You’re selling the impact of the program.

A PLAN

Commonly used with the ‘campaign mindset.’ Cast your vision, attach a dollar amount, articulate a funding plan then ask someone to be a piece of the plan.

You can use one, two or all three – but you must HAVE a simple funding rationale:

“Could you sponsor a classroom? (or 5?)”

“Could you underwrite the program this year and next?”

“Could we ask you to take the lead on this plan?”

Set Your Goals for Engagement!


Set your 2016 Goals for Engagement now! These goals need to be SPECIFIC, WRITTEN and MEASURABLE.

Here are 3 Examples:

  • The ‘33 GIFTS’ Plan

    We will ENGAGE with our TOP 50 PROSPECTS in order to generate 33 COMMITMENTS, which will provide 90% of our funding needs!

    This will be a SELF-FULFILLING PROPHECY.

    E.g. We will generate $1 Million from:

    1 Gift of $200,000
    2 Gifts of $100,000
    4 Gifts of $50,000
    10 Gifts of $20,000
    16 Gifts of $10,000+
    33 Totaling $1 Million

    Note: Need $5M? Multiply the right column by 5. (Or 4 for $4M and so on.)

  •  

  • The ‘Spartan 300’ Plan

    We will ENGAGE with our BEST 300 prospects (including our Top 33), which will generate buckets of money to Fund Our Vision.

    E.g. We have 3 members of our SALES TEAM, and we will collectively make 30 VISITS ENGAGEMENTS a month for 10 months (using August and December for R&R).

    We will use a 3x3x3 goal which challenges us to collectively make 3 visits a day, 3 days a week, 3 weeks out of the month.

    Note: If you have one member of your sales team, divide this goal accordingly: The ‘Spartan 100’ plan!

  •  

  • The ‘1,000 ENGAGEMENT’ Plan

    As a larger For Impact organization with 6 committed Relationship Managers, we will make 1,000 VISITS/PRESENTATIONS this year.

    Each of our 6 Relationship Managers will have a Portfolio of 300 Qualified Prospects. Each of us will make 167 VISITS/PRESENTATIONS (ENGAGEMENTS) this year.

    We will average 15 QUALITY VISITS a month and do all of the appropriate preparation, predisposition and follow-up.

    We will do ‘DISCOVERY’ on every visit and with every prospect. We also commit to make the FULL PRESENTATION around the TRIPLE ASK for TODAY, TOMORROW and FOREVER (Annual Operations, Campaign Priorities and a Legacy/Planned Gift.)

    *20% of these 167 visits will become our TOP 33 gifts for each Relationship Manager.

Funding Frameworks – Illustrated


In this video we illustrate a few funding frameworks inside of our sample engagement tool.

Reminder: You don’t need to use EVERY framework in your engagement tool. Simplicity is the goal!

Here are some links to support this video nugget.

Do the Math to Simplify Your Funding Story


Doing the Math means owning and internalizing an understanding of your numbers. Your numbers tell an important part of your story.

Doing the Math also means taking the time to simplify the numbers in a way that others – Your board, your prospects and your staff – can understand.

In our For Impact World you must:

DO THE ‘BLUE‘ MATH around your Cause and Case and Impact. i.e. How many people/families/students/patients/kids do you impact? Or how many people/families/students/patients/kids NEED this impact?

DO THE ‘RED’ MATH around your Staff, People and Operations.
i.e., What are the people or operational costs associated with delivering your current or desired impact?

And DO THE ‘GREEN’ MATH around your Income, Funding Plan, Goals, etc.
i.e, What is your total need for the year or next 1,000 days based on the BLUE and RED and how will you get there?

Note: Here is a list of questions you can ask your CFO or CEO to get the information you need for math.

Next, use this Math to frame your Funding Rationales. Funding Rationales help to answer your Prospect’s question, “What do you need from me?” and help you get ‘numbers on the table’ tied to a Person, a Program, a Project or a Funding Plan. For example:

A unit of Impact.

One of the simplest ways to do your math is around a Unit of Impact – A Person, A Student, A Family, A Village, A Patient – You get the idea. Quick math:

You can use this math to ask a prospect, “Can you help us by underwriting 10 students this year?” or “How many students would you like to underwrite this year?”

Your Gap, or even better, the cost of EXTRAORDINARY Impact.

Gap math is a common way to do your math and simplify a funding rationale.

 

 

I recently worked with a fantastic Hospice organization who refuses to talk about the gap and instead asks prospects to fund Extraordinary Care for every family. This Hospice has (fluctuating) revenues from reimbursements, but they don’t cover everything. This is where philanthropy comes in – For $1000 you can underwrite Extraordinary Care for one of the 3000 families they serve each year.

The true cost of programs.

This is a big one. Organizations frequently underestimate the true cost to deliver a program, which is essential to a funding rationale. Knowing the real numbers boosts confidence in the ask and helps the funder buy in. You can ask someone to underwrite part or all of the program.

Along with the previous point, you can do the math to tie programming costs to impact in multiple ways. Here’s a clean and simple example to illustrate the concept using the example above. The Read Aloud Program impacts 1600 Kindergarteners and their families (80 classrooms/20 students per class at 40 schools.) You can do the math to create simple funding rationales:

$80,000 to underwrite the program for one year, or;
$2,000 per school, or;
$1,000 per class, or;
$50 per student.

Funding a Project or Priority.

This is commonly used with a ‘campaign mindset’ – projects or priorities that have a larger funding goal than some of the examples above. Casting a vision, packaging up three year Priorities or Projects and then understanding a dollar amount/funding rationale for each.

For example, “As we discussed, our vision is to be there for every family who needs Hospice Care in this community. Part of achieving that plan is to secure a Hospice House where we can care for people who can no longer stay at home, or have no home. Can we talk to you about being part of this plan?”

or

“We’ve put together a plan to scale and innovate in our three core areas – Family Literacy, Read Aloud Programs and Teen Services – that would require $1.3M of the next 1,000 days. Here’s what we would use the funds for – 1000 Families in Literacy Program, increase 1:1 teen Mentoring by 30%, excellent data and evaluation, 5-10 new school relationships…”

(more…)