9 Types of Funding Pitches
Made a reference list this AM of some of the framing devices or pitch types I/we often use to rationalize the ASK. In an abridged form:
• The Gap: Using a gap number to justify the ASK.
o Tuition: Tuition is $6K, cost per student is $8K. Gap is $2K. Could ask someone to underwrite THE GAP for five students.
o 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.
Note: Yesterday I was on the phone with an organization that needs to raise $5M to generate $1Billion. To make my point. They need to raise $5M to generate $1,000,000,000,000.
• 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.
o “One kid for one year.”
o 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 $1.1M to build the prototype.
Going to need:
o 1 @ $200K
o 2 @ $100K
o 3 @ $75K
o 4 @ $50K
o 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:
o Leadership Commitments: Top tiered commitments that validate the funding plan.
o 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 that one. Sometimes it’s simply about a number that would completely TRANSFORM our 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, the funder, etc.
• Strategic Partner: Often a corp or fdn 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.
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?”
—————-Update Added Nov 9 ————-
I forgot one.
- 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.