A healthy fundraising attitude and efficient fundraising cycle
by Scarlett Varga
Fundraising is at the cornerstone of a think tank’s strategy. It limits or enforces the sustainability of its activities and credibility. Having the correct fundraising mentality and addressing the balance of power that exists between the non-profit sector and its funders is vital. This article will put forward three important elements of fundraising mentality that are crucial to ensuring a partnership of equals between fundraisers and funders, before outlining an effective fundraising cycle.
“Asking for money” has a negative connotation in many cultures and fundraisers often see themselves on the weak end of the conversation. These individual attitudes will influence our “fundraising readiness” and confidence. It also creates an unhealthy imbalance of power between funders and fundraisers. Non-profits should not shy away from defining the value of the work they are trained to do and communicating the impact they wish to achieve.
In today’s challenging environment there is an even greater need for think tanks to have access to flexible funding instead of fighting the bureaucracy and instability of temporary funding. Funders are realizing, slowly but surely, that their giving patterns need some reform to tackle those challenges and support positive change – more dialogue in this direction is crucial and should be facilitated by funders and think tanks alike, for a healthier balance of power.
Transparify, the initiative that provides a global rating on the financial transparency of think tanks, asks a very pertinent question: “Can any think tank still accept funding from any source without immediately coming under suspicion of having been “bought” by some public or private vested interest?”
A basic condition of a good funding model is for it to guarantee that a think tank remains independent to govern itself, to have exclusive decision-making power on which issues it pursues, to shape the content of its output and the composition of its team.
However, our efforts for independence are no good if they are hidden. It is something that needs to be demonstrated, not said. Being transparent and going public with finances, staff affiliations and external evaluations reinforces a think tank’s identity as a provider of public good and gives confidence to audiences and funders.
In the for-profit world, there is arguably a much higher degree of clarity on financial issues. In a 2009 article, the Stanford Social Innovation Review claimed that the importance of a funding model is much more prevalent in the non-profit world than in the for-profit one: “Running a nonprofit is more complicated than running a comparable size for-profit business. When a for-profit business finds a way to create value for a customer, it has found its source of revenue; the customer pays for the value. With rare exceptions, that is not true in the nonprofit sector. When a nonprofit finds a way to create value for a beneficiary […] it has not identified its economic engine. That is a separate step.”
Think tanks, as laboratories for improving public policy, can find it hard to put a clear value and, by extension, price tag on the impact they achieve, not to mention that this impact is often hard to attribute with clarity. Monitoring and evaluation practices are therefore crucial. They allow you to showcase one’s impact, which helps in building credibility and trust with future supporters.
Funders seek to support think tanks that have a strong vision and a set of values that guides them in delivering results. A funder that wants to see impact will look for original ideas and sound arguments; they will not favor an over-compliant grantee who tries simply to tick boxes and bends to the maximum for the sole purpose of obtaining the funding. If they do work with this type of organization, then they have misunderstood what a think tank is – and are not the right partner for you.
There is no one-size-fits all funding model or a perfect matrix that describes the various types of key funding models that think tanks must religiously follow. I do think, however, that all think tanks must invest the necessary resources to define a model that best suits their own mission and needs, and actively communicate that model to their stakeholders, internal or external. As such, your ideal funding model might have diversity of sources at its core, especially if you are a more established organization with a few years of experience and Full Time Equivalents (FTEs) that can manage those relationships. Or, you might opt for a project-based model where earmarked funding can help you set-up shop and kick-start your activities right in the moment when what you offer is in high demand (and you do not have the time to wait until a diverse core funding plan comes together).
Existing models can stand as a useful basis for comparison. Scouting the “competition” for new funding ideas is crucial - it informs us about the state of the sector and possible winds of change. There is an incredible amount of wealth that our society has created during the past decades that is available to be tapped into. Building creativity into our fundraising model from the start is vital while defining it too rigidly shuts that down.
Against this backdrop, an efficient fundraising cycle should have 5 specific elements:
- Prospect and monitor: A good friend of mine used to say “fundraising is like fishing. The donors’ environment is a big lake with many fish. You need to fish them out, but it takes a lot of patience and dedication”. And this is an on-going process, even when one has a stable funding model. If your funding model is corporate-based, you will need to have a very good grasp of the movement of the markets, shared values, themes of research and geographical coverage. If you have a government-based model, you will need to monitor for tenders and grants on a weekly basis, not to miss key developments. I consider this first stage the most exciting and critical one. If you “go wrong“ at this stage, and fail to monitor the environment in an accurate way, you risk losing time and reputation.
- Relationship building: Funders are also human. Networking and building a relationship with funders are therefore crucial steps that need to come before developing a concrete proposal. It is an integral part of any fundraising strategy. It gives you the opportunity to share your enthusiasm for your project and infuse passion into what can be a standard logical business-style discussion. A good network and strong relationships with funders will stand you in good stead in your fundraising efforts. The Open Think Tank Network provides a very useful set of basic networking tips.
- Check and track: Not every opportunity is worth pursuing. Going for pretty much any opportunity denotes an entire lack of strategy. You will spend too much effort and time, for too little return. Define a clear list of criteria according to which you filter your funding opportunities. For example, eliminate funders that do not work in your thematic field or do not match the values of your organization. You can also set a funding floor, by not applying for funding under a certain threshold, as it might not be worth your time and effort.
- Reporting and evaluation: Do not get comfortable. Even if the funds have already been used and that final work package has been successfully delivered, do not get complacent at the finish line. A good fundraising cycle finishes with a quality report that outlines the overall impact the project had. A good report can open the door towards further support from the same funder or introductions to other relevant funders.
- Develop a proposal: The shape and process of making a funding proposal can significantly differ depending on whether the proposal is for a private or public actor. Private funders may be harder to reach. They might not have clear calls for application or funding periods. However, they also tend to be more flexible, for example when it comes to the extension of deadlines. Public funders on the other hand will be more methodological with clear milestones and guidelines.
In all cases, however, drafting a good funding application will require:
- Expertise in budgeting and finance;
- Full buy-in from experts involved (having them listed in the proposal is key);
- Dedicated time to draft a strong quality funding proposal. This is time well-spent; a good concept can be easily re-used and adapted to suit other funders.
Often, funders do not require a full-blown proposal with a detailed budget right away but a one- or two-page concept note outlining the main project idea, what need or gap it addresses, and how much it is likely to cost. This saves time and effort on both sides until there is a basic agreement that the idea is worth pursuing further.
Think tanks should stay true to their primary raison d’être – to inform public policy – and not hold back on asking for the support they deserve to carry this work out to the highest standards. Striking the right balance of power between think tanks and funders is possible with the right fundraising mentality and the implementation of a both methodical and adaptable fundraising cycle.
Further arcticles and tools:
- The Open Think tank knowledge platform (general: funding models/ sources; funding cycle; fundraiser mentality)
- How Think Tanks Amplify Corporate America’s Influence (Brookings)
- Corporate interests and think tanks: an overview of current debates by Transparif
- Ten non-profit funding models, Stanford Social Innovation Review, 2009
- Strategy is a fundraising necessity, not a luxury, Jeremy Avins, 2013
- Answers on grant proposals if nonprofits were brutally honest with funders, Non-profit AF, Vu Le
- In Defense of Raising Money: a Manifesto for NonProfit CEOs, Sasha Dicher, 2008
- One damn ask after another: history of fundraising, Rogare, Bluefrog Fundraising, 2021
- What are think tanks for? Policy research in the age of anti-expertise, Rosa Balfour, LSE IDEAS Strategic Update, formerly with GMF and EPC
- Rediscovering a sense of purpose: the challenge for western think-tanks
- Robin Niblett, International Affairs, Volume 94, Issue 6, November 2018, Lecture
- The Future of Think Tanks and Policy Advice Around the World, James G. McGann, Springer Nature, 2021
- The Competition of Ideas, Murray Weidenbaum, Routledge, 2017
- The Fifth Estate: Think Tanks, Public Policy, and Governance, James G. McGann, Brookings Institution Press, 2016
- Improving Think Tank Management - Practical Guidance for Think Tanks, Research Advocacy NGOs, and Their Funders, Raymond Struyk, Results for Development, 2015
- What Should Think Tanks Do? A Strategic Guide to Policy Impact, Andrew D. Selee, Stanford University Press, 2013
- Nonprofits and the Public Sector, Peter F. Drucker, 2020 (republished)
- The Fundraiser: Fundraisers Aren't Born, They're Built, Engels, Meredith White, 2020
- Fundraising 401: Masterclasses in Nonprofit Fundraising That Would Make Peter Drucker Proud, Laurence A. Pagnoni, PhilanthroPress, 2020