Identifying and Pursuing Funding Sources

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1 . Identifying and Pursuing Funding Sources OCASI 2007 Executive Directors Forum

2 Workshop Objectives: Climate Change Understand Canada s s current funding climate, how it has changed and the potential impact of these changes on the funding strategies and the fundraising process for your organization. 2

3 Workshop Objectives: Funding Options Be able to describe the different types of funding options available to your organization and the inherent differences, advantages and disadvantages of each option, as they relate to your organization s s overall funding plan. 3

4 Workshop Objectives: What is a Funding Strategy Be able to describe the elements of a funding strategy and the importance of planned fundraising versus episodic fundraising. 4

5 Workshop Objectives: Fundraising Plan Meets Strategic Plan Understand how a fundraising plan is related to your organization s s strategic and operational plans. 5

6 Workshop Objectives: What Do Funders Expect? Understand the mind-set of today s s funders and their general expectations of the funder- recipient relationship. 6

7 Workshop Objectives: Building Sustainable Relationships Learn how to initiate and build successful and sustainable relationships with funders. 7

8 Workshop Objectives: Learning to Fish Understand where to find the information you need to research potential funders and funding options. 8

9 Canada s s Funding Environment: Perspectives The total number of non-profit organizations has increased resulting in greater competition for funding and other resources. There are now 80,000 non-profit organizations across Canada, all competing for funding as well as volunteers and other kinds of resources. From Building Sustainable Non-Profits, The Waterloo Region Experience, Centre For Research And Education In Human Services & Social Planning Council Of Cambridge And North Dumfries 9

10 Canada s s Funding Environment: Perspectives There has been a marked shift away from a core funding model, which funds organizations to pursue their mission. The new model is project-based and is characterized by contracts that give funders increased control over what the organization does and how it does it. From Funding Matters: The Impact of Canada s s New Funding Regime on Nonprofit and Voluntary Organizations, Canadian Council on Social Development 10

11 Canada s s Funding Environment: Perspectives Government downsizing and downloading have increased pressures on non-profits to become more efficient and accountable, while funding has been reduced to short-term term government grants and contracts. In fact, 81 per cent of non- profit funding now comes from short-term term government grants and contracts. From Building Sustainable Non-Profits, The Waterloo Region Experience, Centre For Research And Education In Human Services & Social Planning Council Of Cambridge And North Dumfries 11

12 Canada s s Funding Environment: Perspectives Many of the participants from small, community-based organizations which make up the lion s s share of nonprofits in Canada said they felt increasingly marginalized. They were frustrated in their efforts to navigate the funding landscape, often o seeing larger organizations expand the range and scope of their activities, including fundraising. Groups from ethno-cultural communities in particular were very conscious of differences in organizational capacity and resources to pursue their activities. From Funding Matters Phase II: Final Report,, Canadian Council on Social Development 12

13 Canada s s Funding Environment: Perspectives Funders are increasingly requiring organizations to make joint submissions with project partners and to demonstrate that they have secured funding from other sources (financial or in-kind contributions) before extending their support. From Funding Matters: The Impact of Canada s s New Funding Regime on Nonprofit and Voluntary Organizations, Canadian Council on Social Development 13

14 Canada s s Funding Environment: Perspectives Nonprofits have to recognize that they're businesses, not just causes. There's a way to combine the very best of the not-for forprofit, philanthropic world with the very best of the for-profit, enterprising world. This hybrid is the wave of the future for both profit and nonprofit companies. From Genius At Work - An Interview with Bill Strickland, CEO of the Manchester Craftsmen's Guild and the Bidwell Training Center Inc. 14

15 Individuals/Households Funding Options: Types of Funders Governments: Federal, Provincial and Municipal Corporations: Corporate philanthropy or corporate giving is the act of corporations donating some of their profits, or their resources, to nonprofit organizations. Corporate giving is often handled by the corporation, directly, or it may be done through a company foundation. Corporations most commonly donate cash, but they also donate the use of their facilities, property, services, or advertising support. They may also set up employee volunteer groups that then donate their time. Definitions from Joanne Fritz, About.com,, nonprofitguide@about.com 15

16 Funding Options: Types of Funders Federated Funds or Subsidies: A federated fund or subsidy is a cooperative enterprise, owned and a controlled by the nonprofit members, whose purpose is raising program and operating capital for each member agency. It serves as a contribution vehicle for donors to direct charitable dollars to the groups and issues about which they care. A donor gift to the federation is usually distributed to all the member organizations, or donors can target gifts to specific groups in the federation. For example, the United Way. Definitions from Joanne Fritz, About.com,, nonprofitguide@about.com 16

17 Foundations: Funding Options: Types of Funders Community Foundations A community foundation is composed primarily of permanent funds established by many separate donors for the long-term benefit of the residents of a defined geographic area. Community foundations provide services to donors who wish to establish endowed funds without incurring the administrative and legal costs of starting independent foundations. For example, The Kitchener and Waterloo Community Foundation. A good source of information on Community Foundations is Community Foundations of Canada, Definitions from Joanne Fritz, About.com,, nonprofitguide@about.com 17

18 Foundations (con t): Private Foundations Funding Options: Types of Funders Private foundations are non-governmental and non-profit. They are generally founded by an individual, a family or a group of individuals, and are organized either as a nonprofit corporation or as a charitable trust. For example, the Atkinson Charitable Foundation and the Maytree Foundation. Definitions from Joanne Fritz, About.com,, nonprofitguide@about.com 18

19 Foundations (con t): Family Foundations Funding Options: Types of Funders Funds from family foundations are derived from members of a single family. At least one family member must continue to serve as an officer or board member of the foundation, and as the donor. The family member plays a significant role in governing and/or managing the foundation throughout its life. Most family foundations are run by family members who serve as trustees or directors on a voluntary basis-receiving no compensation. For example, The Bill and Melinda Gates Foundation. Definitions from Joanne Fritz, About.com,, nonprofitguide@about.com 19

20 Foundations (con t): Corporate Foundations Funding Options: Types of Funders A corporate foundation is a private foundation that derives its grantmaking funds primarily from the contributions of a profit- making business. The company-sponsored foundation often maintains close ties with the donor company, but it is a separate, e, legal organization, sometimes with its own endowment, and is subject to the same rules and regulations as other private foundations. For example, the Unilever Canada Foundation. Definitions from Joanne Fritz, About.com,, nonprofitguide@about.com 20

21 Funding Options: Types of Funders Your Organization and Self-Funding: Membership Fees Events Sale of Goods and Services Investing Social Entrepreneurship Social entrepreneurship is about starting and growing business ventures that simultaneously contribute to your organizational capacity, mission impact and financial bottom line. From Social Entrepreneurship Basics,, Andy Horsnell and John Pepin, Canadian Centre for Philanthropy 21

22 Funding Options: Sources of Revenue for Non-Profits Revenue By Source: Core Nonprofit Sector, 2003 (Not including hospitals, universities and colleges) From Satellite Account of Nonprofit Institutions and Volunteering 1997 to 2003, Statistics Canada 22

23 Funding Options: Important Differences Funder Type Advantages Disadvantages Individual/Household Donations Governments Funds Federated Funds Corporations/Corporate Foundations Community Foundations Private/Family Foundations Self-Generated Funds 23

24 What is a Funding Strategy: The Elements of A Good Plan A A good fundraising strategy will include a balance of these techniques and sources. Establishing unrestricted, ongoing funding is the most important, followed by other funding that will grow the organization and ensure its future. Definitions from Joanne Fritz, About.com,, nonprofitguide@about.com 24

25 What is a Funding Strategy : Episodic versus Planned Fundraising Ongoing Funding: Annual Giving Any organized effort to secure gifts on an annual basis to support yearly budgets or general operations. Funds are typically raised through h mail or direct solicitation efforts. For example, Holiday Campaign. Sale of Products and Services Some non-profits own stores, produce products or provide services that can represent a substantial income stream. For example, Girl Guides is one obvious example with its annual sale of cookies, and Goodwill Industries is probably the largest nonprofit retailer. But other organizations sell logo- branded merchandise (World Wildlife Fund) or specialized services. s. Definitions from Joanne Fritz, About.com,, nonprofitguide@about.com 25

26 What is a Funding Strategy: Episodic versus Planned Fundraising Ongoing Funding (con t): Multi-Year Grants A grant-giving giving organization such as a foundation may provide restricted funding for a particular project or program. If the grant covers a period of time (say 5 years), then the money can be considered ongoing support port for the length of the grant. This money can only be used for the named project (restricted). Definitions from Joanne Fritz, About.com,, nonprofitguide@about.com 26

27 What is a Funding Strategy: Episodic versus Planned Fundraising Episodic Funding: Episodic funding can come from foundation or corporate grants, special s events, or a bequest. These funds may be restricted to one purpose or devoted to unrestricted use by the organization. For example, bequest b to provide a security system for a women s s shelter. Definitions from Joanne Fritz, About.com,, nonprofitguide@about.com 27

28 What is a Funding Strategy: Additional Elements Two types of funding fall outside the scope of ongoing and episodic methods and include a wide range of sources: Capital Campaign: A capital campaign is a multi-year fundraising campaign with a particular goal such as: funding a new building. raising funds for a particular project, such as cancer research. increasing a particular asset such as an endowment. Planned Giving: Planned giving programs enable a donor to confer a gift at the time t of his/her death; or to give a large gift immediately while receiving income during the donor's life. Definitions from Joanne Fritz, About.com,, nonprofitguide@about.com 28

29 What is a Funding Strategy: Fundraise for the Future Funding Strategy Type Funder Year 1 Year 2 Year 3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Multi-Year Subsidy Grant Grant Grant Grant Grant Grant Grant Foundation Foundation Foundation Foundation Self-Generated Funds Self-Generated Funds Self-Generated Funds United Way Citizenship & Immigration Canada Citizenship & Immigration Canada Ontario Women's Directorate Provincial Government City of St. Catharines Municipal Government Municipal Government Maytree Trillium New (Community) New (Corporate) Events New (Annual Giving Program) New (Partnership)

30 Fundraising Plan Meets Strategic Plan: Aligning Your Efforts For while funding and financing are not the only things that matter when it comes to an organization s s capacity and sustainability, they matter a great deal. The funding source matters, the funding mix matters, and the funding vehicle or mechanism matters. The generation of financial resources has a profound impact on the ways in which organizations structure themselves, make decisions, deliver programs, set-up governance structures, and define their missions. From Funding Matters Phase II: Final Report, Canadian Council on Social Development 30

31 Fundraising Plan Meets Strategic Plan: Aligning Your Efforts From Creating and Implementing Your Strategic Plan A Workbook for Non-Profit Organizations (2 nd Edition), J. Byson and F. Alston 31

32 Fundraising Plan Meets Strategic Plan: Aligning Your Efforts Risk Management Plan Human Resources Plan Budgets Fundraising Plan Strategic Plan (Funding Strategies) Information Technology/ Website Plan Crisis Management Plan Social Marketing Plan Communication Plan 32

33 Fundraising Plan Meets Strategic Plan: Aligning Your Efforts Funding Strategies Fundraising Plan From Creating and Implementing Your Strategic Plan A Workbook for Non-Profit Organizations (2 nd Edition),, J. Byson and F. Alston 33

34 From A Code of Good Practice on Funding, Government of Canada, Voluntary Sector Initiative What Do Funders Expect: The New Ideal Value in the delivery of programs and services Strengthened sustainable capacity Co-operation operation and collaboration Innovation Diversity and equitable access Accountability Transparency and consistency Efficiency and effectiveness 34

35 Building Sustainable Relationships Think about the relationship from the funder s s point of view: if it was your money you were handing over, what would you expect in return? To be kept in touch with progress? To be told if there are problems? To hear about progress made in the longer term? To be invited to the occasional event or Annual General Meeting? From Partnerships: Profits and Not-for for-profits Together,, Martha Parker (The Muttard Fellowships) 35

36 Building Sustainable Relationships: What is IIIISM? 1. Identify 2. Inform 3. Involve 4. Invest 5. Steward 6. Maintain Six Step Process The IIIISM model was developed by the Conservation Fund for the National Park Service 36

37 Building Sustainable Relationships Step 1: Identify Make a list of funders that are likely to support the work of your organization. Learn about the funders organization, values, mission, goals, and funding practices/history. Understand the type of effort the funder wants to support (core operation, projects, capital purchase or project). Clarify the funder s s application process, requirements and deadlines. Understand what type of relationship the funder wants to have with your organization and/or the funded project. 37

38 Building Sustainable Relationships Step 2: Inform Be prepared to brief the funder in the following areas: your background and role in the organization the organization s s vision, mission, mandate, values and goals why there is a need for the project, program or service, and who will be served the results that you expect from the project, program or service and how you will measure them how the project, program or service advances the mission of your organization and relates to its long term plans who you are partnered with in the project, program or service and how the community being served supports your efforts the organization s s leadership and how it will guide the success of the project, program or service. 38

39 Building Sustainable Relationships Step 3: Involve Fundraising is a two-way way engagement. Good quality funder involvement is key building a long-term relationship. Find creative ways to involve your funder in the project, program and/or your ongoing operation. Ask your funder for their advice and act on that advice. 39

40 Building Sustainable Relationships Step 4: Invest You must ask for the funding, but remember that you are not asking for yourself personally, but rather, for an organization that is providing an essential service. Prepare a one-page proposal outlining your request for funding and have it available for your initial discussions with the funder. If available, always use funder-prescribed application forms or outlines. Complete forms with precision, adhering to the provided guidelines. Attached all required documentation. Meet all deadlines. Follow-up on your submission after a reasonable amount of time has passed. 40

41 Building Sustainable Relationships Step 5: Steward Acknowledge receipt of funds personally. Prepare and submit progress reports to funder. Satisfy all ongoing reporting obligations. Build a funder album or file with photos, clipping, articles, press releases, success stories, accolades, and letters of appreciation. Notify the funder if problems arise that could affect the outcomes of the project, program or service. 41

42 Building Sustainable Relationships Step 6: Maintain Continue to support the fund-raising relationship and discuss projects that are mutually supportive of both organizations. Provide opportunities for funders to reconnect with your ongoing operation, staff, board, partners, and community. Keep your funders up-to to-date on new initiatives, projects and major changes in your organization. Stay current on the activities and priorities of your funder organizations. 42

43 Learning To Fish: Funding Resources Online resource sites dedicated to non-profits, e.g. Charity Village ( Imagine Canada ( Online research, e.g. Canadian Council on Social Development ( Online databases, e.g. Big Online ( Online sites dedicated to fundraising and philanthrophy, e.g. Association of Fundraising Professionals ( 43

44 Learning To Fish: Funding Resources Government Sources, e.g. Voluntary Sector Initative ( isbc.org), Strategis ( Canada Customs and Revenue Agency ( e.html), Statistics Canada ( Online newpapers and newswire services, e.g. Report on Business ( Canada Newswire ( 44

45 Your Presenter is an independent management consulting practice that focuses on analysis, planning, evaluation, and support for NPOs including; interim management services, organizational reviews, financial management, strategic planning, re-structuring, training, and facilitation. In addition, consulting services are performed in a manner that is socially responsible and consistent with an anti-oppression/anti-racism framework. Gina Vergilio Telephone: gvconsult@rogers.com 45

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