Technology companies know how to raise money. Non-profit companies and start-up social enterprise companies should take their example as a potential way to raise funds. If you know anything about the tech industry, you know that they are excellent at raising investment capital.
So my question to you is: do you just rely on the old methods and models of raising money for your new social enterprise? Or, can you think outside the box and see how to raise capital, get your foot off the perpetual philanthropic fundraising pedal, and then switch to focus on programmatic goals?
When you want to fund your initial social sector organization, you need to be clear about the fundraising mindset. The most successful tech companies that raise millions of dollars from the beginning are looking for a specific amount of money. In addition, they are also clear about the goals they want to achieve with this money.
Having this kind of thinking is very important and is a mental shift from traditional philanthropic fundraising. You see, most nonprofit executives view their fundraising as an ongoing piece of their operation. It happens every day and at the same time they look to run their programs.
In the technology industry, a company will increase its start-up capital and concentrate on getting the job done. They devote all their energy to achieving the goals and showing their followers that they have what it takes to achieve it. Then, when they have achieved these goals, they enter a next stage of fundraising.
Imagine being able to go through a fundraising campaign, raise capital, and then put that work aside and focus exclusively on the programs.
Investment in talent
Technology companies are not afraid to put money into talent. If you want to set up a non-profit or social enterprise, you should not be afraid of this investment. Here’s the offer – you want the best people on your team. To be successful, you want to hire the absolute best program director. You want the best marketing professional to bring your brand to the masses.
But with that, you need to be prepared to tell your funders. I have written several times in the past about the fact that nonprofits receive funders and pay their staff. This is because the social sector has done a terrible job communicating and explaining why it makes sense to pay for the best talent.
By investing in talent, you get a team of professionals who will make it a reality. The goals set for the investment will be met if you have the right talent to work with you. This requires competitive money.
The days when a funder donated to your pet’s charity with little expectation of results are gone, as they should be. Today’s funders want to see results and impact. They want results. Technology and the low cost of obtaining data analysis tools have caused more funders (even general gift givers) to want to put their money where they can get tangible results.
You need to get the data. The whole world today is measured. I don’t think that’s not the case. Be prepared to present to your funders the metrics and data they need to know that you have been successful. And, when you participate in a second or third round of fundraising for another goal or project, they will be more willing to support your vision.
Where to look for funding
Traditionally, nonprofits sought out major donors, institutional funders, and the government to raise money. Although crowdfunding has been around for a long time, technology has allowed the social sector to become more creative about how they raise funds.
But beyond that, if you’re thinking about raising funds for your start-up social enterprise, you’ll need to think differently about your fundraising.
Angel investors can support your first stage of financing for operational and program development.
A single institutional funder or a handful of large funders can achieve a significant portion of your initial goals.
Risk philanthropists are looking for the most innovative and innovative organizations to fund.
A co-founder with deep pockets can help you raise funds in whole or in part. You can have the idea and the programmatic piece and your co-founder can help you fund it during the initial phase.
Whatever you do, if you want to start a new social or non-profit enterprise, don’t just think of the traditional fundraising plan as the way to success. I encourage you to look at the tech industry as a model to get that initial round and beyond the capital you need to succeed.