An increasing number of donor organizations prioritize impact when awarding funding. They want to hear about the changes that organizations plan to bring and how they will achieve these. Even small foundations seek to ensure that their investments will generate impact at the ground level. It is no longer sufficient to make claims about what is planned to be achieved, stakeholders now expect this to be proved.
DevelopmentAid, as the largest hub for non-profits working in the development sector, recently hosted a thematic webinar on ‘Impact-driven fundraising’. Our speaker, Maarten Mulder (Senior Consultant at Han Valk Fundraising Consultancy (HVFC)), spoke about the impact journey, its importance, and its characteristics. He also shared some tips on how to develop an impact-driven proposition and use this to raise funds.
The relationship between the impact and fundraising is twofold. On the one hand, donors are looking to make the most of their investments in terms of outcomes that prioritize impact. On the other hand, organizations that focus on creating a strong impact narrative will discover more funding opportunities and see the achievement of their goals progress more effectively.
See also: How do non-profit organizations receive funding?
Understanding the change that non-profits want to achieve is the first and most important step in the impact journey. As the objectives are often built around collective, public or social causes, these need to be clearly established and defined. The next two steps involve the organizations elaborating and incorporating efficient indicators to measure the impact created and to then disseminate their achievements among other actors in the niche, specifically potential donors. This last step is a prerequisite for joining forces with other partners and increasing impact. Maarten highlighted the importance of step five which seeks complete alignment among all units within the organization on the objective of increasing the impact.
Fig.1. Impact journey steps
Proactive VS Reactive fundraising
Non-profits use reactive and proactive strategies to raise funds with the first being more widely used. Reactive fundraising involves organizations responding to the calls of interest issued by donors and demonstrating how their expertise can contribute to the program goals. Proactive fundraising, in contrast, involves organizations taking the necessary steps to connect with potential donors through unsolicited proposals and present (novel) solutions to the problem at hand. Here, both the donor and the organization can tailor a program that satisfies the common goals.
While reactive fundraising often focuses on identifying funding opportunities, preparing proposals, and implementing the program, proactive fundraising includes several other important steps. Maarten encourages organizations to spend more time mapping potential donors, researching their profiles, identifying relevant decision-makers, and taking the necessary steps to build meaningful relationships.
Fig.2. The pyramid of proactive fundraising
From the HVFC perspective, a successful fundraising campaign combines three essential elements that relate to the desired impacts and the state of the competition in the market. Thus, if an organization can match its desired impact with those expected by the donor (or vice-versa) and is able to highlight its unique skills/resources that could achieve the impact better than the competition, there is a high probability of that entity landing the desired funding.
Fig.3. Elements of successful fundraising
For those who did not have the opportunity to join us for this online event, a link to the recorded version can be found here. The presentation materials used during this webinar can be requested at e.rata@developmentaid.org.
We invite you to join us for our next webinar on “Best practices for successful management of digital projects” which will take place on April 28, 2022, at 4 PM (Brussels) or 10 AM (Washington DC). Our speakers, Lilianna Bagnoli and Dhivya Sivaramakrishnan, both accomplished project managers at Dimagi, will share with us their experience in creating social impact technology for the world’s largest mission-driven organizations. Join us to learn how to deliver high-quality digital projects on time. You can register here.
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