Okay - Hey everybody! My name once again is Amber Melanie Smith, and thank you for
coming back to my youtube channel. I am here with a special guest today. This is
Laurence Pagnoni - did I get that right? - From LAPA Fundraising.
And you're in New York aren't you?
New York City, yes.
Awesome! Well you know, you all had some great questions about fundraising - so I
have some fundraising experience, but it's of course always best to look to
the professionals - So I wanted to get a real pro in here to answer some of the
questions that you all have asked.
A lot of people don't know what a professional
fundraiser does, and so at some point I'd like to talk about that, but in brief, we
try to figure out the best revenue stream
for different nonprofits that will raise the most money. And by revenue stream, I
mean things like private grants, government contracts, fees for service,
individual giving, wills and estates, and bequests - the list goes on and on, but
figuring out what the right approach for your nonprofit takes a little bit of art
and a little bit of science.
Yeah you know I hear all the time from people
just starting out who just automatically assume grants - grants, grants, grants! - um
and I counsel them, you know grants might be appropriate for some - maybe not
for others - and they're not as easy to get as you think, so that's just an
interesting topic, how there's so many different ways to fundraise out there.
There's 106,000 foundations and growing in the United
States alone, not including the international foundations, and they, you
know, they have huge endowment, so it's very seductive when you look at - well you
know the Ford Foundation has 60 billion dollars you know. What do they do with
all that money, and can I get some? But in fact grants are a very passive way - as
fundraisers view it - they're a passive way of fundraising. They could be
terrific and there's some nonprofits that have grants at the centerpiece but
depending on where you're located like if you're in Miami or New York City or
Los Angeles
I'm sorry not Los Angeles Chicago or DC private grants may be the winner but not
so much in other areas of the country especially rural areas that's really
interesting I never thought about being geographical like that mmm okay well you
know I'd love to get into you you mentioned several ways that nonprofits
could raise money what are some of the most successful ways that nonprofits
raise money well I have a surprise for your audience
you'll be surprised to know that the number one way that nonprofits raise
their revenue is fees for service mmm and that is usually an unspoken aspect
of the sector so earned revenue versus unearned revenue unearned revenue it is
a financial way to talk about philanthropy but earned revenue is fees
for service and would you have a guess as to how many non you know if the if
the sector were a hundred percent how many have fee for service as their
dominant source of revenue what do you think amber oh my gosh 60 very good
guess yeah most people guess like 10 or 15% it's actually as high as 72 percent
Wow so to give your listeners an example so
if you have a daycare center mm-hmm and the parents are paying it's a non-profit
daycare center and the parents pay a fee for their child to go there or they get
a subsidy from the government to go there that's fee for service yep boys
and girls club membership yep and my nonprofit we do that with some
consulting and project management event planning as well and then government
contracts is the second most successful way that nonprofits raise their money
especially if you're social services and then that's followed by individuals a
lot of times when you go to a fundraising conference you'll hear
people say individuals are the largest revenue stream and that has to be taken
with a grain of salt there's a lot of nonprofits who don't have the ability to
reach individuals so social media helps break through that crowdfunding breaks
through that when you get the donors contact information yep ya know get the
donors contact information sneaky old Facebook hiding the donors contact
information in many situations not good fundraisers need the contact information
because we have to then circle back to the donors to ask for increased giving
to get them into your monthly giving Club and and to get increased giving
because as people age they give away more money because they have more money
okay so you know we talked a little bit about how surprising it was that you
know fees for service or earned income followed by government contracts and and
then maybe individual giving was to a lot of people who are just starting out
in this and again I talked about how so many people assume grants are the top
way to fundraise and always looking for those grants but what are some other
misconceptions people new to nonprofits have about fundraising well I think a
lot of new people think it's transactional which means you know you
apply you get you ask you get hmm but it's not transactional it's relational
and relational fundraising always raises more revenue for a non-profit what does
it mean to relate well for lower-level donors donors who give
$1 $5 $25 you have to automate the cultivation and Reese elicitation of
those donors through technology if you're a small nonprofit Automation may
seem like you know a daunting concept but there's lots of ways you can
automate your giving I mean just a simple email service like Constant
Contact or MailChimp they have tons of automation features which are pretty
easy to understand so you can write a thoughtful email it can go out once a
quarter you can give an update by email and solicit twice a year for increased
giving boom you have more relational fundraising and in some of those email
platforms if you have a small list they allow you to use it for free I think
it's like up to 5,000 emails or I've forgotten the number but the second
misconception I'd mention is that a lot of nonprofits think you don't have to
invest in fundraising and they try to do it on the cheap which you know I'm a
frugal guy I get that but you know on the other end is you get what you pay
for and investing in fundraising always if it's the right investment will
produce a return for you to grow yeah so many nonprofits stay you know painfully
small and in fact 72% of nonprofits in the sector in the United States live on
an annual budget below 250,000 a year and it's primarily because they don't
invest in fundraising so so a misconception is that the fundraising
will just happen but you have to invest in it yeah you know on your first point
about relational that's that's hard to learn because you kind of go into it
thinking it's a wonderful cause why wouldn't everyone just want to come
support but I liken it to having that friend who's always texting you or
knocking on your door trying to get some money but they never like ask how you're
doing you have to build a relationship with someone before they will want to or
be inspired to give you their money especially in America we're talking
about money is kind of awkward or taboo you know that's really interesting and I
personally have experienced on your the second misconception that you mentioned
investing in fundraising it feels challenging because you're like
well I don't have any money what if I can't get a return you know like why
would I put something into this effort that that could be a risk we can lose it
all and then we'll have nothing but every single time I through my nonprofit
have invested in capacity or fundraising it has always come back in return and
it's kind of like that old business saying you know you gotta spend money to
make money yeah anything um there's a fair amount
of fear that if I make the investment will I be guaranteed a return no there's
no guarantees very few guarantees in life in general let alone fundraising
what you can rely on is that if you stay and cross us and have the right approach
figuring out the right approach for your fundraiser for you I'm sorry for your
nonprofit is you know eight-eight tense of the battle and that's we're turning
to a professional fundraiser to figure out your strategy and your approach but
you don't need to hire a professional fundraiser like me I mean the larger
nonprofits hire lap of fundraising because they have you know big goals
like we just raised four and a half million dollars in 22 months for a
Humane Society to protect the cats and the dogs and west
York so you know if you have serious goals like that you need a serious
fundraising team but the grassroots fundraising journal grassroots
fundraising journal dot org you can get their free tips on fundraising how to
raise a thousand dollars how to reach $500 Kym Klein is the founder of that
and she's just terrific or my blog laughs of fundraising comm we're a free
blog every Thursday we give a tip on fundraising and you learn a lot that way
so it's better to start becoming familiar with how fundraisers think and
then you'll you'll get a lot of tips for free from those two sources
yeah and I'll include a link to his blog and any other resources that we talked
about in the description below so feel free to check that out okay so here's a
question I get a lot and I know personally when I just started out with
the nonprofit world the idea of asking people especially people I knew for
money was very very intimidating so what tips do you have for someone who is
starting out wanting to help either cause that they love or starting their
own nonprofit but they're just kind of terrified of asking for money well I
want to give a shout out to those who feel that anxiety it's not crazy it
makes sense to me even though I've been raising money for
over 50 years asking for money and money in general is one of the three basic
taboos of life according to Sigmund Freud sex death and money they were the
three core taboos from Freud the fear of asking for money all depends on how you
were raised some of us were raised by parents who
talked to us about money and we don't have as much fear others of us were
raised where money was kept secret so for those with those backgrounds
we have to do a little bit more work but I'm here to say to you that I've seen
some terrific fund raisers born out of overcoming and dealing with their
initial hesitations and fears about money because they discovered that
asking for money was the path to fueling their mission without the revenue your
mission is dead on arrival so part of growing as a leader in in a
nonprofit space is figuring out the revenue stream and becoming more
comfortable with asking for money so many people start out that's why many
people are gravitate to grants initially because they're a little bit at
arms-length it's more of a clerical exercise you
write a good letter you follow the application formula and lo and behold
you know you get an email back saying congratulations you've got $5,000 it's
like wow this is great business you know but more often than not you get
rejection letters and that's not so good but but it is one of the taboos I
suggest that a way to deal with it if you're feeling a little pinkish about
asking for for funds roleplay it with someone you trust who has coaching
skills and if the situation is sitting down with a colleague to ask them to
support your nonprofit role you know write out what you'd think you'd say
I'll share your thoughts with that you're role-playing coach and and do it
and stay in role though don't don't get out of role until you fully solicit that
colleague and you'll be shocked at how fast you learned from it there's videos
on YouTube about how to ask for money so you could look at those - yeah I liken
it to public speaking you know it's terrifying but when you
to sit more and more it gets more and more comfortable and there's another
professional fundraiser in my area named Gayle Perry have you heard of her
oh yeah we're colleagues at i/o that's amazing yeah Gayle's feels the best
um and I love how she puts it she talks about giving money as an act of love you
know people who donate their money do it
because it's their way of loving the community of loving the cause and you're
giving them a gift by giving them an opportunity to give your cause the money
which just blew my mind when I first heard that because you always think like
you feel so guilty asking for money but actually you're giving people a way to
feel like they belong to your mission and that can be very powerful