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Non-profit funding never a sure thing

From the Ground Up

Let’s pretend that you are a business person who sits on the board of directors of a local non-profit organization. It’s been over a month since you sent in that request for funding to a local contributor of good causes and still no word on whether or not it’s been approved. Last year when you made the original request, it was approved within days.

Why would someone not support your project this year after showing what appeared to be enthusiastic support last year?

If you find yourself in that situation, it might be a good time to pay a visit or make contact with the contributor to find out the real reason. Over the years I’ve had many occasions to be on both sides of this situation.

Here are several reasons subsequent funding requests go unheeded:

• The funder was never told how the previous year’s funds were spent. This is one of the main reasons that subsequent funding requests go unmet. It is amazing to see how many people ask for money for an event or cause only to fail to let the contributor know when and how the money was spent. If a contributor doesn’t know how the money was used there is not any reason to make a second contribution. At the end of six months ask the funder to pay a personal visit to the site where the contribution was of benefit. Personalize the update as much as possible.

For example, if the contribution paid for reading materials for an after school program use the name of an actual student and tell how that student benefited. In such a case it would be even better if the students sent a big thank-you card.

• Nobody took time to thank the contributor. Not only is it common courtesy, but it gives the contributor the feeling that the contribution was made to someone who appreciated it. There are lots of ways to say thank you — a letter, a personal visit, a tribute dinner, a plaque, etc.

On a personal note, my ego really swells up after I finish a series of teaching a local class about business though the Junior Achievement program. The class usually does a big thank you card and then the Junior Achievement office follows up with a small token of appreciation. Of course that’s not why I’m involved with that program, but it is a nice gesture and it makes me look forward to next year. If you don’t say thanks, there are other organizations that will.

• The contributor does not believe the money was well-spent. What if you thanked the funder, sent an annual report and monthly newsletters but still got rejected? It could be that the funder does not believe that the money was well-spent. If that’s the case, you will need to do some major repair work. It will probably be necessary to either personally escort the funder to the beneficiary of the generosity or send photographs. If the funder truly doesn’t believe the money was well-spent then it’s time for your board to have a serious analysis of its mission.

• The contributor was told last year that only start-up assistance was needed. Many people who make requests for contributions do so with the pitch that the money is needed for start-up costs. This makes the funder feel that this is a one-time contribution only to see you come back next year and ask for more, all the while telling the contributor that if he or she doesn’t continue contributing then the event will have to fold. Some groups even have the nerve to say that they “…couldn’t have the event because the XYQ company wouldn’t support the cause this year.” In consumer protection circles they have a term for doing things like this. It’s called bait and switch.

• The contributor has refocused its efforts in another area. In today’s world, many funding sources are narrowing their focus in their charitable giving area. Instead of spreading their contributions out among many groups, corporations are choosing either a specific charity or an area of support. If your focus is housing, and the contributor has made a decision to support education, then you may not stand a chance at future contributions.

Businesses today are becoming more careful about funding charitable causes. They want to see accountability and effectiveness. Those are the same things their shareholders expect from them. The non-profits that have the best chances of funding will use a business approach when asking businesses for money.

Phil Hardwick’s column on Mississippi business appears regularly in the Mississippi Business Journal. His e-mail address is hardwickp@aol.com.


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