Financing Articles

Cheat Sheet / Updated 11-28-2022

Whether you wind up helping as a volunteer, joining a staff, or serving on a board, you connect with a nonprofit organization because, first and foremost, you believe in the work it’s doing. At some point, you realize that the fundraiser’s role is right at the heart of the organization. Without funding, the organization wouldn’t be able to do any of the good work that got you hooked in the first place. Here, you'll discover a fundraiser’s important tasks, the folks who make up a fundraising department, and tips for continued success.

Article / Updated 11-28-2022

As if a fundraiser’s job weren’t hard enough, sometimes the economy takes a tumble, causing contributions to your organization to slow down. You may need to revamp your fundraising message to make it clear that demands on your program are up, but donations are down. It’s also a good idea to take a look at your budget to see what you can live without until funding picks up again. Use the following tips to help you get started: Know what your organization needs, daily, monthly, quarterly, and yearly. Make contingency plans — know when changes in funding will affect programming or staffing. Increase your efforts to add to your annual fund. Be as realistic as possible — and be candid with your board, staff, and constituents. Use the downturn in giving as a prompt for your givers. Maintain an attitude of “we’re all in this together.” Cut costs where you can — by reducing print pieces and increasing e-mail contact, for example. Use your resources — past board chairpersons, engaged donors, fundraising professionals — to help you navigate through challenging times.

Article / Updated 11-28-2022

The backbone of your fundraising campaign is a strong case statement. A case statement outlines what need your agency addresses, how you address it, what makes your organization unique, and how others can help, whether through time or money. Here are some tips to keep in mind as you write your first draft: Make it clear. Be concise and focused in your mission statement, goals, objectives, and program information. Make it urgent. Give your reader a reason to care about your cause today. Make it complete. Address the five Ws — who, what, when, where, and why — and include them in your case statement. Make it interesting. Tell stories. Both success stories and heart-tugging stories stir the emotions of your readers. Paint images in your readers’ minds. Visual words and action words activate your readers’ imaginations and help them remember your mission. Don’t overdo it. Tugging on heartstrings requires an even hand. Resist gushing. Do your homework. Make sure your facts — financials, program design, staff info, and plans — are accurate and well researched. Include a call to action. Give your readers a clear way to help. Reread, revisit, and revise. Write your best draft, take two aspirin, and ask for reviews — from past donors, volunteers, staff, and your board. Figuring out what others think of the case statement helps you communicate more clearly and compellingly, which, in turn, helps your case statement hit its mark.

Article / Updated 11-18-2022

Fundraising is a never-ending task for most nonprofit organizations. Although you may raise money with various campaigns for different programs within your agency, your overarching fundraising strategy requires you to Write your mission statement — make it clear and memorable. Develop a case statement that reflects who you are and what you do. Develop a fundraising plan. Choose dynamic leaders for your fundraising campaigns. Involve your board in various aspects of your fundraising strategy. Continually build, slice, and dice your donor list. Build an online audience with social media. Use all communication avenues — in person, by phone, through social media, the Web, e-mail, newsletters, and print — to connect with your donors. Assess your effectiveness in all campaigns and do more of what works — and less of what doesn’t.

Cheat Sheet / Updated 04-20-2022

Funding for your business can come from a bank in the form of a loan or from a variety of other sources. You may draw on support from friends and family, strangers connected through the Internet, or investors, including business angels and venture capitalists. You can also create a revenue stream through your invoices or sell shares.

Cheat Sheet / Updated 03-10-2022

Navigating the world of venture capital as you seek to raise funds for your business can be scary and confusing because of the high stakes. After you identify whether venture capital is a good choice of funding for your company, you can begin to seek out investors. When seeking venture capital, you need to know who the venture investors are and where to find them. You also need to take certain steps to prepare yourself and your company for the scrutiny you’ll experience as potential investors strive to learn more about your company as they decide whether it is a good candidate for venture capital.

Article / Updated 04-25-2017

One of the most valuable networking tools you can use is an infographic. Kelly Hoey of WIM says she wouldn’t have been so successful without diverse relationships. The figure shows her infographic indicating the relationship to organizations and people critical for the success of her organization. Credit: Women Innovate Mobile network map 2012 You can use Post-it notes on the wall, a mind-mapping program, or a free infographic program, but get it down. President Lyndon Johnson kept communication channels open with senators and representatives. He knew his success with Congress required good relationships and kept this as a priority. He kept big maps on his wall that had the following information: Where each bill was in committee What stage the bill was at What needed to happen for the bill to reach the next stage He called individual congressmen, who could be obstacles at any stage, helped them understand how important this was to him, and promised whatever needed to get it through. Keep in mind these words by Sir Arthur Conan Doyle: “Skill is fine, and genius is splendid, but the right contacts are more valuable than either.”

Article / Updated 04-25-2017

In your business plan and in your crowdfund investment campaign pitch, you told the crowd what you needed to do, when you needed to do it, and how you were going to do it. Those are your milestones. Summarize them into bullet points and put them on a piece of paper. In his book Mastering the Rockefeller Habits (Gazelles, Inc.) — which is a great read, by the way — entrepreneur guru Verne Harnish uses a very simple tool to help entrepreneurs hit their milestones. He tells them to take the list of milestones and break it into priorities. Figure out your Top 5 priorities, and then identify one priority that supersedes the others — the Top 1 of the Top 5. For example, if you’re starting an organic farm, some of your tasks include getting the seeds and animals, buying equipment, and signing the lease on the land. Your first priority should be signing the lease; it’s your Top 1. Within that priority you have various tasks: contacting the land owner, reading the documents, having them reviewed by attorneys, and so on. You need to spell out and prioritize each of these tasks (even the very mundane ones). Checking off these items (working on 1 percent at a time) will make you feel like you’re progressing. That’s what the Rockefeller Habits are all about. Work on that Top 1 until it’s done, and then move on to the second priority. Tell people about your Top 5. Make it a game. Share it with your crowd. They’ll appreciate the fact that you have a game plan in action. If you need help deciding what to do and when to do it, use the chart shown. It helps you prioritize your tasks based on their importance and urgency. On the vertical axis, you have Urgency. You assign each task a number from 1 (not very) to 10 (very) based on how urgent it is that you get this task done quickly. On the horizontal axis, you have Importance. For each task, you assign a number from 1 to 10 based on its relative importance to your overall vision. After you chart your tasks, the upper-right quadrant of the chart is where you find the most urgent and most important thing(s) you have to do; anything that falls in that quadrant is a Top 5. Moving left, you have urgent but not so important things to do. In the lower-right quadrant will be tasks that are important but not so urgent. And finally, the tasks that are not very important or very urgent will appear in the lower-left quadrant. Do this exercise now, and organize your tasks based on your results. This is now your game plan for where to focus your attention.

Article / Updated 04-25-2017

If you haven’t been scared you away from crowdfund investing yet, that means you probably have some tolerance for financial risk. How much tolerance? That’s a question only you can answer (ideally with guidance from a financial advisor). Creating an investment portfolio that meets your needs demands first assessing your level of risk tolerance. If you have nerves of steel and can withstand rocky financial times without selling every investment at the worst possible moment (when its value has fallen to the floor), you’re pretty high on the risk tolerance scale. If you lie awake at night worrying that your stock index mutual fund ticked a quarter of a percent lower that day, you’re in an entirely different risk zone. Depending on how much risk you can stomach and what your long-term goals are, you should diversify your investments — spread them among various asset classes — accordingly. The term asset classes refers to groups of investments that share certain characteristics, including risk. Low-risk government bonds constitute one asset class, and high-risk junk bonds constitute a very different asset class. In between you have federal agency bonds, corporate bonds, international bonds, and more. Within the equity world, you have large-cap stocks, small-cap stocks, international stocks, value stocks, growth stocks, emerging market stocks, and more. (The word cap here refers to capitalization, which is an estimate of a company’s value arrived at by multiplying its total number of outstanding shares by the current price of a single share.) For every asset class, this truism holds: The lower the risk it represents, the lower the return (or potential return) it offers. Conversely, the higher the risk it represents, the higher the return (or potential return) it offers. That’s why people don’t get rich quick buying government bonds, and it’s why people who take chances on risky stock classes have a fairly good chance of ending up either richly rewarded or completely broke. Higher-risk asset classes also tend to be much more volatile than lower risk asset classes. If you buy a U.S. Treasury bond, you don’t expect a lot of volatility from that investment; you know how much return you’ll be getting. If you buy stocks in an emerging-market nation, on the other hand, you don’t have a clue what your return will be in any given year. You hope to jump on the roller coaster while the car is pointing uphill, but you never know when you’ll reach the crest and start rushing down the other side. Many financial advisors make their living helping people determine how to craft a portfolio that fits all their needs, including their risk tolerance and need for returns. Most people (though certainly not all) find that as they get closer to reaching their long-term goals, such as retirement, their risk tolerance decreases. Therefore, a portfolio cannot be a static thing; as your life circumstances change, you and your financial advisor must be prepared to adjust your investments accordingly. The beauty of diversifying your portfolio with a variety of asset classes is that you can still invest in some of the high-risk classes, including startups and small businesses, without risking your long-term goals. As long as you know that crowdfund investing is firmly planted on the high-risk end of the investment spectrum, and as long as you maintain strict control over your investment choices, you absolutely can fit it into your portfolio. Just don’t assume that all (or even any) of your crowdfund investments will turn into the next Google. Chances are very, very good that they won’t.

Cheat Sheet / Updated 03-27-2016

Crowdfund investing is a new funding opportunity for small businesses and startups that holds tremendous potential, but it's not a free-for-all. Entrepreneurs, business owners, and investors alike should know the legislative boundaries set by the JOBS Act (which opened the door to this funding resource in 2012), the risks involved in this type of funding, and the potential rewards it offers both to companies and their supporters.