I am fortunate to meet over 100 for-purpose organisations yearly to discuss their projects and services, philanthropic strategies, and the funders they work with. These meetings continue to inspire me, and it is always interesting to learn how charities secure funds for their work and how they plan to maintain projects through what can sometimes be funding uncertainty.
Through these conversations, I have found that some themes are shared among all organisations.
The amount of available funding out there often comes as a surprise.
Charities are in a unique situation where people and organisations want to fund their work and don’t want anything in return. The number of funders available to them always surprises the organisations I meet.
Diversified funding is critical to sustainability, but many organisations have relied on one or two sources of funds for much of their existence. When I speak to them, some are at the beginning of their philanthropic journey, while others have established teams. Finding new funders to add to their funding pipeline is a priority that many struggle to fulfil.
There are funders for every charity, but it is time-consuming to find them.
When we build a customised GEMS (Grants Expertise Management System) for our clients, we customise their grants calendar from over 6,500 funding opportunities our research team maintains.
At first, the number of prospects we provide charities is surprising; no one ever realises how many funders match their work. Providing them with the data is one thing; the hard work starts from there.
Despite being critical, many charities struggle to develop a list of funding priorities.
“The ability to clearly articulate what the charity does, why it does it, what funding is required, and what the impact of that funding will be is essential to securing funds and building lasting relationships with funders.”
Securing funds without a clear list of funding priorities is impossible. While there is a misconception that funders only want to fund new projects, having a list of funding priorities is essential and enables the charity to match the needs of the funder with the needs of the community the charity is fulfilling. The ability to clearly articulate what the charity does, why it does it, what funding is required, and what the impact of that funding will be is essential to securing funds and building lasting relationships with funders.
Many philanthropy teams acknowledge (in private) that they struggle with their program leads. It is difficult to get information from them, and they often approach them with a “great idea” that needs funding but has little or no detail. The project lead has not analysed needs or developed clear outputs, measurable outcomes or a realistic budget.
It’s a great idea but not a project (yet). Only solid projects, programs, capital needs, research etc., should make the funding priority list.
The project teams DO have great ideas; they are on the ground and know what needs to be done, but education and resources are required for them to understand what it takes to secure philanthropic funds. The philanthropy team needs enough information to convince a third party (the funder) who may not know the organisation to care enough about the work and invest their money in the partnership. The project team or Executive need to provide this information.
Many want to focus on larger grant rounds
When we develop a GEMS grants calendar for our clients, many want to focus on larger grant rounds, for example, $100,000+. However, no matter the size of the charity, some funders want them to prove themselves with a smaller grant (in fact, the first grant round is often a test!). I always advise our clients to set the minimum grant range within their GEMS to $10,000 or lower (many set it at $1,000), to assess those smaller grants to see if they are funders with a history of supporting organisations with larger amounts.
While the funders do not want anything in return, what they do want is for a charity to clearly articulate the need and their solution and deliver what they say they will on time and within budget.
If charities do this and engage the funder in the work and outcomes through the process, they have passed the first test.
The next application with them will be easier, and some of those funders will eventually become long-term supporters.
Death by spreadsheet is real!
“One head of philanthropy said he knew “there are pots of gold being left by the side of the road”—he just didn’t know how to find them.”
Almost all charities have been on the same journey before reaching out to Strategic Grants. They have philanthropic budgets that need to be achieved and need information about funders to help them achieve them. They have tried one or two cheaper grants databases, subscribe to every free e-newsletter and alert available and are trying to manage all the information on several spreadsheets.
Many describe “death by spreadsheet” as they miss acquittal deadlines and constantly submit last-minute applications to funders that do not quite match their work.
While hundreds of funders are in each sector, finding the ones that match the work and mission is essential. Managing this process with incomplete data on a spreadsheet is very difficult. One head of philanthropy said he knew “there are pots of gold being left by the side of the road”—he just didn’t know how to find them.
It is a numbers game.
While submitting grants to build up the number of applications is not the answer, submitting enough applications to fund each project is essential. Teams need to calculate the money needed to raise for their funding priorities and find at least three times that amount from funders to submit in robust grant applications. If the funding priorities amount to $1 million, teams must aim to submit $3 million worth of grants.
As teams develop best practice strategies, their success rate will climb. However, even the best teams with clearly articulated funding priorities and incredible relationships with funders don’t secure funding with every grant application.
Be realistic about what is achievable through philanthropy, understand the historical success rate of funding applications for the organisation (aim to improve it), develop a picture of the funding available, and calculate what is needed, what is available and what is realistically achievable.
Some charities submit a lot of successful grants but don’t move on to larger success; I met one grant-seeker who, as a team of one, submitted over 90 grants each year. It was a fantastic performance with a great success rate of over 50%. They had developed a system to quickly submit many smaller regional council grants to fund their community work.
Still, they struggled to find the time to create more significant multi-site funding proposals. Sometimes, charities are caught in a cycle of recurring funding applications to maintain their work, and they don’t get to think about how to fund more significant amounts.
Business-as-usual is always a priority.
Many charities struggle to fund business-as-usual, but it is always a priority. They are concerned that funders only want to fund new projects and will not be interested in supporting their established projects or programs.
Charities should represent their business-as-usual differently; for example, if an established school lunch project has been running successfully for a couple of years, it can still be the basis of a robust project-based grant application. The new school year is the project, and the benefit of using an established project is that there should be a lot of data to support the impact of the work.
Likewise, if funding is required for an already established crisis help centre, work out the timing that matches the funding round and the number of people that will be helped during that period. This is the project. Then explain, based on previous work, the outcomes that will be achieved for this period.
There are also great resources out there to support charities in asking for business-as-usual funding—check out the Reframe Overhead campaign here.
Not all charities know about PAFs and PuAFs.
“Invitation Only” PAFs do not mean don’t connect with them. The clients who are successful with their PAF strategy look for alignment and connections with the PAFs, and if all else fails, they pick up the phone and talk to them about a project that matches the focus, and they ask for a meeting.”
Public and Private Ancillary Funds should be part of the philanthropic strategy. However, many charities do not know what they are, how and why they have been established and how to approach them. Thousands of PAFs and PuAFs in Australia have been established to disperse money to the charity sector.
In GEMS, we provide access to over 2,500 PAFs and PuAFs. Our research team monitors a further 700+ that have no information besides an ABN number.
I suggest clients select a few PAFs that match their work each month and develop an approach for them.
There is a lot of information that will help choose the best PAFs to focus on, such as their mission, the amount they disperse, their focus areas, past funded projects and organisations, and, importantly, the names of the trustees.
“Invitation Only” PAFs do not mean don’t connect with them. The clients who are successful with their PAF strategy look for alignment and connections with the PAFs, and if all else fails, they pick up the phone and talk to them about a project that matches the focus, and they ask for a meeting.
Staff retention and turnover is a challenge.
A team of multi-skilled people is fantastic, but many organisations only have one or two people who work in the fundraising team. A lot of the smaller organisations only have one person who does multiple roles, for example Marketing and Fundraising or Communication and Philanthropy. The incumbent will focus on their strengths and passions in these shared roles. If they love marketing, they will put their attention in that space. If grant-seeking is not a strength, writing that grant or speaking to the funder will be at the bottom of a long to-do list.
With grants hard to find, project teams not providing timely project information and budgets challenging to reach, staff move on.
Providing the right tools and training is essential to hold onto good staff. As is a realistic budget and expectations. A grant-seeker needs to have a lot of different skills. When organisations find someone who can write well, work with the project leads, speak to funders and develop relationships, they should value and support those people.
There are always new people to meet.
While I have said there are a lot of themes that are similar for all of the charities we work with, they are all unique, with incredible staff delivering exceptional outcomes for our community.
It is my pleasure to work with them all, and I hope to meet many more by the end of the year.
2024 marks 15 years of Strategic Grants. Find out more here.