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00:00:01
Finding Private Funding When Federal Funding Disappears.
55 Plays3 months ago
In this episode Tom discusses how organizations dependent on federal funding can prepare themselves to find private support.
Recommended
Transcript
Introduction to the Abundant Vision Fundraising Podcast
00:00:05
Speaker
Welcome to the Abundant Vision Fundraising Podcast. Whether you are a seasoned professional or a first-time fundraiser, we have the advice you need to take your next step toward major gift mastery. I'm your host, Tom Dauber, President of Abundant Vision Philanthropic Consulting.
00:00:25
Speaker
Now, most mornings, I like to start my day with my wife having coffee. Usually we we sit there, we chat, we we talk about the problems in the world, the problems in our lives, and and how we might go about solving them.
Impact of Changes in Federal Funding
00:00:44
Speaker
Now, one of the things that's out there quite a bit that we we both see a lot, my my wife was in higher ed for a good long time, and and so was i is is the issue of federal funding and and how the new administration is making changes there.
00:01:01
Speaker
Now, this is not a political podcast by any means, and I have no intention of weighing in on any of that. But as we were talking today, i was reminded that there's some real opportunities.
00:01:16
Speaker
A lot of folks, especially in higher ed, you know the research types that were dependent upon and NIH funding, ah but also you know other nonprofits that benefit either directly or indirectly from federal funding, a lot of those folks are are in a real place of panic right now. And I'm not saying they shouldn't be. Again, i try to stay neutral on that stuff.
00:01:39
Speaker
But, you know, in this crisis, there is opportunity.
Exploring Alternative Funding Streams
00:01:44
Speaker
And I wanted to take a minute to talk about that and and even how just changing the way you're thinking about what's happening just a little bit could help you unlock some alternative streams of funding that you may not have realized were there.
00:02:04
Speaker
I mean, you think about, you know, All the folks out there that are collaborators with the federal government on social so services or or state ah government who is indirectly, you know, who they're who's being funded by the federal government.
00:02:20
Speaker
You know obviously the people that are, you know, thinking about NIH grants or appropriations or or other types of of funding from the federal government. Or even in some cases, you might have a nonprofit that distributes money that they receive ah from the federal government to other nonprofits.
00:02:41
Speaker
I even think, you know, we've we've got a kid who's just getting ready to graduate but from a program in chemistry. And, you know, I'm hearing through some of my connections that that a lot of graduate programs are are freezing their acceptance of of new PhD candidates, you know.
00:03:00
Speaker
And so, you know, we're thinking about him and his future. And of course, ah even, you know, if he were to go into pharma or something, how's How's the changes in the FDA going to impact ah the pharmaceutical companies and their hiring? And so so these things are all on our minds right now.
00:03:17
Speaker
And I'm sure on yours as well. But but here's here's a
Making a Compelling Case for Private Funding
00:03:21
Speaker
thing. you know there's there's there's two There's two things that can really help any fundraising effort.
00:03:29
Speaker
the The first one, and the most important, of course, is a compelling case that makes real impact, that shows real impact, right? It's... yeah it's It's not someone going out.
00:03:42
Speaker
and And if you are a person who's maybe not used to ah soliciting private funds, Like if you if you're a person that goes after federal grant dollars, you're you're probably not going to get this. You're probably going to have a lot of presuppositions about what private support looks like. And so you might think that it's it's influence peddling or arm twisting or begging ah for money. and it And it really isn't that.
00:04:10
Speaker
What it is, it's it's it's inspiring people. um that That's what we want to do here. we We want to make such an awesome case for our work that any anyone would be crazy to pass up an opportunity to invest in it.
00:04:26
Speaker
And and believe believe you me, you may not know this, but there are lots of people out there who are wealthy, who care about the world, who have a sense of social responsibility to use their money wisely.
00:04:41
Speaker
and and who are looking for opportunities to make a difference. and and And what's also true is many of those people have family members that they care about that have been impacted by you know various diseases or various social issues or or or various sorts of things that your nonprofit, your research, the work that you do may directly address.
00:05:08
Speaker
Now, the trick, of course, is finding those people and in in learning what they care about and and then making the case. But all I'm saying is this, is anybody can raise money If they can demonstrate to the world that what they're doing is matters, it's compelling, and it makes an impact in this world for good, right?
00:05:28
Speaker
so So that's the first piece, a compelling case that makes a real impact.
Creating Positive Urgency in Fundraising
00:05:33
Speaker
The second thing that can really help any fundraising effort is a true sense of urgency. Now, while it's true that telling someone we're going to go out of business without your help does create a sense of urgency, that type of sense of urgency, you might get some money, but you may never get any money ever again.
00:05:54
Speaker
Because you know when you approach things like that, you're also telling the person who's probably good with money that you're bad with money and you're and you're not a sustainable organization and you're probably not handling your your finance as well. right so So that type of sense of urgency, a negative sense of urgency that casts your organization in a bad light, that's the type you want to stay away from them.
00:06:18
Speaker
However, if If you can show a sense of urgency because you know if if the funding doesn't come in right now, here's the opportunity we're going to miss.
00:06:29
Speaker
Sometimes in a funding scenario, there is sort of this this intersection of of opportunity that makes this moment right here, right now, the time to invest.
00:06:43
Speaker
This is the ground floor of an opportunity. There is a unique time. to impact this issue before things get out of control or to make a difference in kids' lives now ah while while they're while they're young and growing and it's a foundational experience for them. Or this is the time to invest in this type of research because there's so many people that are going to benefit from it, right?
00:07:08
Speaker
I think think about those those of you who are maybe on the ecological side of things. You might might be thinking, wow, we better get ahead of global warming now while there's still a chance, right? Now, um ah or whatever the research area that that you're thinking about it's It's that intersection that shows why timeliness and support is really important now and why supporting it later or never is is not going to be helpful, right?
00:07:39
Speaker
So that's that's how you create a sense of urgency. Now, now it's true. A lot of folks, especially in higher ed, but in other nonprofits as well, will talk about campaigns, right? And they'll have a campaign deadline, ah which is great, right? Because what that does, i mean, honestly, campaign deadlines, organizations get to pick when those start and end.
00:08:01
Speaker
Now, sometimes those will be rooted in real things in in real time that that are not arbitrary, but oftentimes they are arbitrary.
The Role of Campaign Deadlines
00:08:10
Speaker
um And that's okay.
00:08:11
Speaker
ah but But ultimately, a campaign really, in in many ways, is it's it's an artificial um timeframe, really to create a sense of urgency. and We want to get to a million dollars by this date, right? Well, why?
00:08:26
Speaker
you know well Sometimes orgs can be a little weak in in explaining why that is. But ah you know I know some some folks that I've worked with where it's like, wow, we've got this opportunity to buy this piece of property right now.
00:08:42
Speaker
And if we don't get on the ball, ah to do these things, well, then we're going to really be missing out and and our mission is going to be compromised as a result, right? So but I'm not speaking against campaigns, but I am just speaking to why they're so prevalent is because they also create a sense of urgency.
00:08:58
Speaker
Well, as you all well know, um a change in the way the federal government disperses grants and such, that's definitely creating the sense of urgency, right?
00:09:11
Speaker
ah People are concerned. Everybody is. you know whether Whether you're on the right or you're on the left in this issue, the change in you know in a and NIH funding and the the change to ah you know the overhead ah from 50% to 15%, that's going to affect people and that's going to affect universities and because they're used to funding of of a certain type in a certain way.
00:09:35
Speaker
What I'm saying if... if If you've not thought about private funding, because maybe you haven't had to, this is a good time to do it. Because you now have cause to say, wow, there's a need.
00:09:53
Speaker
This need was being taken care of by the and NIH. It's not anymore. we We can't count on that now. So now we have to look to other institutions, people, organizations, right?
00:10:05
Speaker
Now,
Shifting Focus to Private Funding
00:10:06
Speaker
part one of that, I was talking about how a compelling case um is so important to fundraising. My hope is that anyone who's a regular listener to the show,
00:10:17
Speaker
may have spent some time building that strong case because it's something I harp on a lot as a consultant, and as a podcaster, right? um Now, if you haven't, if you're sitting there saying, well, Tom, I don't know how I would describe ah the work I do in a way to convince people it's important.
00:10:34
Speaker
Well, come come talk to me. ah Shoot me an email. ah We can get together and it'll cost you some money, but I'm happy to help ah in that area. It's something I'm good at. But I know i know that that many of you, you know you've just you've not had to build that type of case for support. you know Maybe you've written some grants to the government and and that's a completely different thing ah in terms of how you make that case, right?
00:11:02
Speaker
you're You're using probably a lot of numbers and charts and figures and and that sort of thing. and And those things can be helpful in in personal private sorts of fundraising attempts and probably a little bit more helpful with foundations specifically.
00:11:17
Speaker
But people are different than organizations. The decision factors that go into saying yes to a solicitation, a request, they're different.
00:11:30
Speaker
They're different. they They really have a lot more to do with the emotion of the thing. um Now, it has to make sense. It can't just be, oh, you made me cry, so I'm going to give you a million dollars. but But you've got to really make a case that provokes emotion.
00:11:46
Speaker
and And the way you you provoke that emotion is is very much by, a understanding what that donor cares about, but then showing how your organization connects to that.
Adopting an Abundance Mindset
00:12:01
Speaker
So so that's that's where I want to focus today, right? I want to help you pivot from thinking only about federal funding ah and and really begin to see the opportunities that may be in front of you in the midst of what feels like a crisis.
00:12:18
Speaker
so So step one. And this is this is my mantra here ah for my my company, right? There is no lack of money in the world. There is only a lack of vision.
00:12:30
Speaker
You've got to buy into that. You've got to really believe that there is money out there to be had. There are people that care about making a difference in this world and and who have money to give, even in a tough economy.
00:12:44
Speaker
you know we're We're experiencing some changes in the stock market right now that are bad for a lot of people. It's so important, though, that you don't project your own scarcity mentality and maybe even your own personal approach to philanthropy on other people that are out there.
00:13:01
Speaker
There are many people who give more when times are bad, right? We saw that during the like the Great Depression and and even during COVID. like Times were bad during COVID. The economy was was crunching down, yet there were some wonderful acts of generosity that were out there during the pandemic, right?
00:13:20
Speaker
but But people step up to help others when they see there's a need during a time of crisis, right? and and And so you've got to trust that that's true.
00:13:31
Speaker
Now, the the next thing you need to really be rooted in um and and really understand is how you and the work you're doing, your organization, how are you making a difference to help others?
00:13:45
Speaker
Tom Dauber here for Abundant Vision Philanthropic Consulting. Fundraising can be hard work and it can be hard to mentally get into the place you need to be in order to see new opportunities.
00:13:57
Speaker
Everyone struggles with it. We are like the fish in the fishbowl who just can't see the water they're swimming in. That's when having outside expertise comes in handy.
00:14:08
Speaker
For 25 years, I've been helping nonprofits analyze challenges, discover new ways forward, and develop clear plans that lead to greater fundraising levels. Now I am available to help your organization develop the abundant vision it needs to inspire new levels of philanthropy at your nonprofit's work.
00:14:27
Speaker
Check out AbundantVision.net to start your journey toward greater fundraising success today. Now, back the show. Now, this is too broad of a topic for me to answer for you on this podcast. But again, it's something that if we had a conversation, you know, we could walk through that and and figure that out.
00:14:47
Speaker
but But if you're, you know, let's let's just say you are a researcher at a college or a university, right? why is your research Why does your research matter? I mean, clearly it matters.
00:14:58
Speaker
you You wouldn't have selected it as your area of expertise if it didn't matter to you. and and so Certainly, you're not the only person in the world that this matters to you.
00:15:11
Speaker
You've got to really be thinking about what you're doing and how does it help others, and and not just not just like directly,
00:15:22
Speaker
but indirectly you know, how does the help you provide impact over a long term, the broader world around you, right? You know, there's there's a great story that I share a lot. I've shared on the show a few times. I'm going to share it again. And I stole it from a book that I don't have in front of me. And I can't remember the name of it, but it's not mine. So the guy that came up with this, thank you.
00:15:49
Speaker
But yeah it it tells a story of three bricklayers, right? And person comes up to the first bricklayer and says, what are you doing? And the bricklayer says, hey, I'm laying bricks. Well, good for him.
00:16:01
Speaker
Goes to the next bricklayer and says, hey, what are you doing? He goes, I'm building a church, right? And then he goes to the third bricklayer and says, hey, what are you doing? The third bricklayer, he says, I'm connecting people with God, right?
00:16:13
Speaker
so So you can see each of the bricklayers were doing the same exact thing. But each of them had a a a successively broader vision, more expansive understanding of the impact of the work they were doing, right?
00:16:30
Speaker
And in which which one of those there's bricklayers do do you think you'd you'd feel better about helping? well Well, sure. The the one who was trying to connect people with God, that's a much grander vision, right?
Communicating the Broader Impact
00:16:44
Speaker
and a noble concept really than, than just laying bricks or even building a church for that matter. You know, I, I saw this in real life once I, there was a um an HVAC issue that was preventing, um,
00:17:00
Speaker
the organization I was working for, for, for doing ah research. They, they, they needed more ah air supply in order to run their, their hoods to do more experiments. Right. um And, and this facilities guy, I'd known him for years. He's been around the university a long time. but And um it was kind of taken some time because, you know, sometimes, you know people, you know, people have different priorities. Right. So I saw him and,
00:17:29
Speaker
And I asked him, I said, hey, de do you know what you're doing? i mean, not in terms of like, do you know how to do the work you're doing? was like, do you know do you know what youre what you're working on? And he goes, well, yeah, we're just but just trying to increase the the airflow here. We're trying to repair this this issue. I said, well, you know that's not just what you're doing.
00:17:49
Speaker
you know These labs that we're trying to do experiments in, these labs are trying to cure cancer. you know And the more experiments we can run, the the more shots we have on goal towards trying to make steps towards finding a cure.
00:18:05
Speaker
You should have seen him straighten up. This was a man who I'm sure had been impacted, had loved ones impacted by cancer in his life. I'll tell you what, that that project got got done just a little bit more quickly, I think, because he knew what was on the line, right?
00:18:20
Speaker
It wasn't just getting hoods operational. it It was playing a part, even if it was a small one, to help cure cancer. But being able to talk more broadly about you know how something you know impacts the world is so important. like even if you're Even if you're a researcher in environmental sciences and you're studying some insect, and i'm I'm certain and I don't know it, but but what whatever bug you're studying yeah as as an entomologist is,
00:18:53
Speaker
I'm almost certain that that if you look at the the broader picture of ecology, if if that bug isn't around, something bad happens. Either something that eats it has problems or something that it eats gets out of control, right?
00:19:09
Speaker
and and And so then you can start drawing the bigger picture. You know, if you're if you're a social services group, you know, maybe you help kids. the The thing you want to be thinking about here isn't...
00:19:21
Speaker
oh isn't just, oh, we're helping kids. Talk to me as a donor about what what happens to those kids after they graduate. you know how does How does that education impact future careers?
00:19:36
Speaker
And how do those future careers impact health outcomes for them and their family? What's it going to mean for their children or their grandchildren that that they had this help?
00:19:47
Speaker
Is there going to be generational impact? bet there is. But you've got to take the time to think that through. What is that generational impact? And and and and that's that's the change you need to share with people, right?
00:20:01
Speaker
Now- As you understand how the help you're providing impacts the broader world around you, the the next thing you got to know too, though, is what are the costs to fund that impact, right?
00:20:13
Speaker
And now this this part might get hard because you know in you know in the world, especially like NIH funding, you know you're you're talking big grants, And and it's it is harder to find big grants, right? but ah Bigger donations. But they are out there.
00:20:29
Speaker
but But the piece of it that gets a little tricky is is that is that overhead piece, you know, is the indirect ah costs, which are like, they've historically been 50% for R1 institutions. And private organizations don't typically tolerate ah that type of thing.
00:20:47
Speaker
They're going to want to know what it is you're spending their money on. Indirects, for better or for worse, sometimes you don't necessarily know where that's going. so So you're going to want to be really, really clear about what the needs are.
00:21:03
Speaker
And you're going to want to think about that broadly. like Like if it is a research project, right? You're going to want to think about if you're like a professor, right? what percentage of my time is spent on this research project?
00:21:16
Speaker
And you're going to want to include that percentage of your FTE into into that that dollar request. I think the mistake that sometimes people make and that actually limits the size of the the solicitation that they're making is that they they don't think about that. They don't necessarily think about you know the space they're using because they already have the space.
00:21:39
Speaker
So they're not thinking about, well, I really should be helping keep the lights on with a portion of this request because this request is directly impacted by that. Or I should be thinking about you know ah the percentage of my salary that's going into this project because really without that salary, this project doesn't happen.
00:21:58
Speaker
right So you want to think about all the different things. and And really what you should do is is kind of build a business model. plan that that describes the entire enterprise involved and and what what the total cost of that thing is.
00:22:15
Speaker
and And why that's important is funders private funders typically don't want to be the only person funding something. you know So if you ask them for 100%, of of the need, they're proud they may say no, right? unless it's Unless they're really into what you're doing and who you are, they may say no to that.
00:22:35
Speaker
um And so the bigger the the picture you can paint about the total cost of the thing you know, the the better that's that's going to be for you.
00:22:46
Speaker
So again, build out kind of a business plan that describes the entire thing and really shows how each cent is going to be spent and even when, right?
Planning for Funders
00:22:56
Speaker
You want your potential donor to understand, you know,
00:23:01
Speaker
if it's a million dollar project, we need 500,000 upfront. like Without the 500,000, we don't have the equipment, ah the supplies, all the things that we need to really even get started. right And then you know we need 250K every six months but the next for the for the rest of the remainder of the year or two years or whatever it is.
00:23:27
Speaker
in order to to finish the project. You want to you want to spell all that out. Because what a donor doesn't want is to be told, yeah, if you give me a million dollars, this project will happen.
00:23:39
Speaker
Well, again, most of these people are you know have some success and some some savvy when it comes to money. They're going to say, well, how are you going to spend it? When are you going to spend it? Do you need it all now? And you know and And the other thing too is when you know the timing, it also gives you a little bit more flexibility in your solicitation because maybe maybe the person would say no if you ask them for a million dollars cash right now.
00:24:04
Speaker
But if the truth is you you only need a quarter million dollars a year for the next four over a four-year period, maybe they would say yes. maybe they've you know Maybe they've got the the budget to afford to give you a quarter million dollars a year for four years.
00:24:18
Speaker
ah not yeah for for years So you get a yes where you would have gotten a no, but you can only get to to those sorts of things when you actually take the time to to do do the planning um and get your head around what what the math should look like.
00:24:35
Speaker
You know, lastly, you know, you've also got to believe that private fundraising can support your work.
Believing in Private Fundraising's Potential
00:24:44
Speaker
I've been in situations before in organizations where people have felt as if no one will support our work.
00:24:53
Speaker
No one's interested in in this and kind of a woe is me, scarcity mentality sort of approach. But then if you look around the world i nonprofits, what you'll see is other organizations doing similar work, getting private donations.
00:25:11
Speaker
And so you're sitting there saying, well, no one supports this type of work. Well, that's that's simply not true. um You're looking at yourself and and and you're not really understanding what's what's real, right?
00:25:23
Speaker
so So you've got to believe that private fundraising can support your work or else you'll never put the work into it um that you need to to be successful. And and and trust me, this will take work.
00:25:37
Speaker
This will not happen overnight. It's very rare. that someone just goes out and immediately finds the type of donor they need for the thing they need. ah But if you will change the way you think about philanthropy, if you will take the time to meet with potential donors, if you'll do the homework to be able to talk about your work in a compelling way, and if If you ask, if you ask for the help that you need to make the change that the world needs, I believe that you're going to find a good bit of that funding. Now, I'm not promising you that whatever the funding streams were that you got from the federal government are just going to come right back through other sources, but but at least you can get some of that, right? Right.
00:26:26
Speaker
So why not take that opportunity right now when people are concerned about these things, when you don't have to you don't have to convince people that the the funding scenario in the world has changed.
00:26:37
Speaker
It's all over the news. People are feeling nervous. and And folks that have a proclivity for giving, some of them really are like, well, how do I fix this? What do I do? Well, here's something you can do.
00:26:50
Speaker
you can You can help this one researcher or you can help this this one program that was always dependent on on federal funding. You can be the one to make the difference here, right? People want to hear that type of message.
00:27:02
Speaker
and And you don't have to feel bad about letting them know, i know this is a tough time. and And in no way do I want to make light of what's happening. a lot of people are losing their jobs.
00:27:13
Speaker
lot of folks are struggling right now trying to understand the world that we're living in. my My hope in in sharing this episode today is is just to help you find a little bit little bit of hope during this time and and maybe some approaches to support your work that you haven't tried before.
00:27:32
Speaker
Because I've seen it happen. I've seen it happen. like i you know I'll give you just a real quick example four before we close up here.
Success Stories in Private Donations
00:27:39
Speaker
you know I know of a researcher who's a cancer researcher who was pretty much an NIH funding sort of sort of guy.
00:27:46
Speaker
And you know there was a certain amount of startup money that that this person needed for their lab ah if they were going to make make a move to a new organization.
00:27:58
Speaker
now Now, typically, again, that type of money is is usually going to come through federal grants and and those sorts of things. But in this particular case, it just wasn't available. and And so we we went to donors. you know we so We started calling people that we knew ah this person was a cancer researcher. And we started calling people that what we knew cared about the organization and who cared about this area of research.
00:28:23
Speaker
We said, hey, this is a thing that's happening. we don't We know this is last minute. This isn't the way we normally like to make our requests. But we know you care.
00:28:35
Speaker
We knew you'd want to know about this opportunity because if we can get the funding we need right now, you know we can we can do this thing. And this this will make a difference for the reputation of our school, for the quality of our research, and and for the state of you know cancer research overall.
00:28:52
Speaker
We can do this with your help. and and we got we got some great gifts out of that. We had one person offer on the spot to give us half a million dollars. um It was fantastic.
00:29:03
Speaker
so So what I'm saying is no matter what field you're in, there are people that care about things related to that. And you know if again, if you need some coaching, if you need some help, that's what I do.
00:29:16
Speaker
Give me a call, reach out, go to my website, abundantvision.net and schedule some time with me. ah Love to talk with you about it. And if you need a coach, I'm available.
00:29:30
Speaker
Thanks again. Hang in there and look forward to our next episode together. Now, if you've enjoyed this podcast, please be sure to subscribe and give us a five-star rating on your podcast provider.
00:29:42
Speaker
I'm your host, Tom Dauber. Thank you for joining me as we journey together towards major gift mastery on the Abundant Vision Fundraising Podcast.