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:
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?”
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.
Having a funding rationale answers the question: “Where does the money go?” It’s tied directly to packaging your CASE: Your Priorities and Projects and Programs, around your IMPACT.
The CASE should be all about the WHAT and HOW you will USE FUNDS to deliver your impact.
“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 over the next 1,000 days. Here’s what we would use the funds for – 1000 Families in our Literacy Program, increase 1:1 teen Mentoring by 30%, excellent data and evaluation, and 10 new school relationships.”
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.”
Our most used frameworks is the Altitude Framework – Used to order thinking, communications, and storylines; to develop Engagement Tools; and, to think through the Flow of a Visit.
This framework is used for everything from visits to strategy sessions to dealing with objections. However, it’s best use is COMMUNICATION and SIMPLIFICATION of your message.
14,000’ is the view and perspective from the ‘top of the mountain.’ (In the Rockies, they’re called ‘fourteeners.’) At this altitude, the air is thinner and the raptors soar. If 30,000’ is about vision, 14,000’ is about focus. A place to talk about Business Models and Strategy, but most importantly, a place to finding clarity around Priorities.
One of our favorite devices for simplifying your message at 14,000’ is The Rule of 3.
The Rule of 3 is a magical rule for SIMPLICITY.
As human beings, we’re wired to understand, internalize, and remember threes. Politicians know this, as does the media. Neuroscience tells us that the brain actually finds harmony in threes.
One is lonely (no choice.)
Two creates an either/or conflict. (Sophie’s Choice, anyone?)
Not only is Three just right (thank you, Goldilocks) but anything more than three is too complex!