Relationship-based Fundraising… It IS Worth the Investment

Anyone who is involved in raising revenue knows that having a plan is critical. Whether you’re raising funds in a nonprofit, raising capital for a new business venture, or looking to fund community revitalization through municipalities, having a funding plan gives you a roadmap to revenue. While all of these endeavors require a different approach and will spark funding from different entities, I believe that revenue success isn’t just having the roadmap. It requires building relationships with your potential funders so you can deeply engage and enroll.

Why, you may ask? Well, there is both research that supports this, as well as practical evidence, my own included. Plus, just think about it; if you want a funder to say “yes” to your proposal, they need to know your organization, like what you’re doing, and trust that you’re going to deliver. You don’t get to this state of enlightenment through a proposal only. And if you do, the same research shows that you’re in the minority. 

In my own experience as a fundraiser at a nonprofit organization, upwards of 90% of grant funding came from funders with whom we had an existing relationship. And some funders made an increased investment of nearly 700% over time. But why?

I think it can be traced back to three factors; know, like and trust. 

Know- The funder knows the organization’s name, and something about it. Perhaps they have met a staff or board member as well. Or perhaps they know the organization from a distance as a thought leader in the space, a subject matter expert, or a peer organization to other grantees. However the funder knows the organization, they will be more likely to respond to an email, or remember meeting someone at a networking event. 

Like- Beyond knowing the organization, the funder likes something about the organization. Whether it’s mission, leadership, status in the field, vision for the future. Whatever it is, the funder sees alignment between you and them. Without alignment, there will be no funding. First comes mission alignment, (you need infrastructure, they fund infrastructure), then comes alignment on methodology, impacted beneficiaries, organizational culture, etc.

Trust- If you have been funded, and completed the project on time, and fulfilled other deliverables, congratulations, you have earned trust. If you have not been funded yet, you’re still building up the trust factor. Trust is trust, no matter whether it’s between you and your spouse, you and your boss, or you and your funder; it matters! I’m not talking about trust-based philanthropy, which is a whole new level of trust. But trust in the way of knowing that if they fund your organization, project or business, you will deliver. Because at the end of the day, your funder answers to a board too. Need I say more?  

The funder in my experience that invested at a 700% increase did so because we established an open relationship, where they could express their needs as a funder, and we could have open discussions about our needs and visions as a nonprofit. In doing so, we were able to find some big ways to partner that also leveled up our relationship status. 

So, the next time you’re developing your funding strategies, think about how you’re cultivating and leveraging relationships too. While building relationships can take time, and requires patience, it can also pay off in big ways.