Fundraising the Right Way

Date : Jan 21 , 2021 | Opinion

Best Practices from Across the Social Sector

Pratyush Rawal & Radha Arakkal

Funds are the lifeblood of social-impact organizations. The criticality of fundraising for a non-profit cannot be overstated.

At India Leaders for Social Sector (ILSS), we conducted a detailed study on the development sector fundraising landscape, the main challenges that organizations and social sector leaders face while raising money, and the best practices that some of the most successful fundraising organizations follow.  We interviewed over 70 non-profit leaders, donors, experts, and intermediaries and had over 50 informal conversations for this study.

In the first article of the two-part series, we enumerated the key challenges faced by non-profits while fundraising. In this piece, we discuss the best practices followed by organizations that have been successful at fundraising and have aced the domain.

• They have robust governance systems. From financial reporting to impact assessment, organizations that build strong governance and reporting systems are often the donor’s favourites. Besides helping nonprofits with access to funds, these systems also ensure a strong stewardship model and better relationship management with the donor.
• They have irrefutable evidence of impact. Most donors like to fund projects that are not only sustainable but promise long-lasting outcomes and impact. Successful fundraising organizations present irrefutable evidence of impact through pilot projects or RCTs and inspire confidence among donors.
• Their interventions are simple to understand, technologically driven and scalable/replicable. Despite working in the complex world of human development, organizations successful in fundraising communicate their interventions in the most basic terms, without relying on jargon. Safeena Husain, founder of Educate Girls mentioned in the ILSS Fundraising Program how she practiced her pitch in front of a nine year old child. Such organizations also emphasize the use of data and technology in their interventions, and how their projects are scalable or replicable.
• They have a clear plan for growth. Successful organizations meticulously plan their growth trajectory, both in terms of project expansion and finances. The whole organization- from the leadership to the ground staff- are strongly aligned to these plans.
• They have a diverse funder base. Successful non-profits do not put all their eggs in one basket. The diversity of their donor base ensures sustainability and ability to deal with external shocks.
• They invest in marketing and brand-building. Successful organizations do not shy away from investing in marketing and brand-building. This enables them to build a strong brand and harness the power of retail fundraising and untied funds.
• Finally, successful organizations invest in building fundraising capacity and cultivate a culture of fundraising. These organizations understand the criticality of fundraising. The head of development gets a seat at the high table. Fundraising is not a compartmentalized function, but an activity which the whole organization engages in, and enjoys.

We found out that successful fundraising organizations strongly believe that social change is impossible without successful fundraising. This is an important lesson for all social impact organizations to emulate. These organizations must not only recognize the centrality of fundraising in their work, but also actively invest in recruiting and upskilling fundraising talent. The success of their social missions will closely follow the success of their fundraising efforts.