Let’s say your programmatic priority is providing access to clean water to communities in East Asia. You position your organization as one that can design infrastructure, develop sanitation programs, and even craft irrigation plans. A potential donor with interests in funding water projects in East Asia may view your nonprofit as a jack of all trades, and may question where your priorities and true expertise lies. The donor decides to fund a different organization and you’re left wondering why. If only the donor understood your operating model. If only you could reach the donor to explain why your strengths lie in three different areas.

In the end, the donor selected to fund a nonprofit they knew. The grantee's story was familiar. The donor knew that the grantee could deliver on one of the most critical elements of the proposal -- filtration for home use. Even if your organization's irrigation and clean water delivery capabilities would allow you to support filtration for home use, the donor knew with confidence that the selected organization was as well suited as possible to deliver the program, thus ensuring the funding would be more efficiently used, more impactful, many people would benefit at a much faster rate. The donor knew this with confidence because of a long standing relationship with the grantee. The grantee had proven itself and the donor knew it could deliver.

Fundraising in and of itself is a transaction. Money is passed between organizations and a service is delivered. Beyond the transaction, fundraising allows resources to transfer from those "with" to those "without." When grantees understand donor organization's "why", when it's clear what exactly a donor is looking for, the transaction is much easier. When a donor understands the capabilities of the grantee, and how it can deliver on the donor's "why",  fundraising builds relationships, which in turn lead to more funding.

Making connections with the right people inside a donor or partner organization may not always come easy. It takes persistence. Making relationship building a key element of your fundraising strategy, however, is really important.

Here's why: 

1. People connect with people.  Donors are more likely to connect with an individual whose values, approach and tone align with theirs. Consider forming relationships to understand what makes donors tick. What's their "why?" Often learning from individuals inside funding organizations allows for more success than going in cold with an unsolicited proposal or general inquiry. 
2. Mutual visions foster a sense of belonging.   By engaging donors and establishing relationships, even those that take time, donors become more invested in the project, and can be more of a staunch advocate for your program.
3. Relationships build trust. When relationships lead the way, donors and grantees can align quicker and easier. This ensures a smoother process and more resources to those who most need it. 
4. Creating long term partnerships allow for sustainability of a program. When funding is built on relationships, programs have a better chance of developing a long-term vision for lasting impact. Ultimately the donor AND grantee should build a program that can last long after the funding has ceased. Relationships built on a mutual sense of partnership can help advance the stages of program development and ensure long-term sustainability for the program even after funding has ended.
   
   

As you develop your fundraising strategies, make sure you incorporate relationship building with potential donors as part of the foundation. Building strong relationships takes time and patience, but the end result is much better for those who most gain (the recipients!)

​Support each other's "why", find that overlap of interest and vision, and aim high. ​

For decades it was understood what economic growth meant for development; it was about growing GDP, advancing incomes and creating an equal playing field among workers across the world. The complexity of an interconnected global marketplace, fast adoption of technology, reliance on mobile communication, and an ever-expanding gap among "rich" and "poor" has created a different scope to consider for USAID and its network of partners. Economic advancement is no longer measured in simple terms. There's a complexity to the market-based development focus for the agency that is now being clarified and shared in their new Economic Growth Policy.


To stipulate how the agency will support, measure and expand economic growth worldwide, USAID's Economic Growth Policy combines its heavy focus on Private Sector Engagement, lead role in the Women's Global Development and Prosperity Initiative (W-GDP) and New Partnership Initiative (NPI), to describe the underlying mechanisms of growth necessary for countries to achieve self reliance.

This journey, as USAID refers to repeatedly, will be different in each region where USAID has a presence, but the mechanisms USAID will depend upon remain the same.

In summary USAID will promote:

• Market systems that drive development: USAID will increasingly look to the private sector to create new jobs, stabilize markets and respond to economic growth trends. USAID will help build solid and formidable markets that allow the private sector to create linkages necessary for job creation, and economic advancement for communities where the need for new business development is critical. USAID will also support governance and infrastructure development for business creation and private sector engagement.
• Building a growing demand for U.S. Goods and Services: USAID can facilitate market development and uptake for U.S. goods and services through policy making and advocacy, helping advance issues like traceability, safety, standard setting and adherence to peace, stability, government transparency and investment readiness.
• Measuring growth effectively to ensure the greatest impact: USAID will continue to track the progress its country partners make in advancing traditional economic measures (like GDP, income, and jobs) but will also add new ways of measuring economic success as part of its self-reliance pledge. This may include statistics like gender metrics, access to services, government accountability, and market strength, with the aim of tracking impact leading to a suitable exit strategy for the agency once its country partners are able to manage growth for the foreseeable future. 

USAID has indicated that the core policy tenets are:

• "Primacy of private enterprise," which puts private sector companies in the drivers' seat as key partners to lead countries out of poverty.
• Innovation and investment, which encourage incentives for programs to advance productivity, transform labor and increase reliance on local human capital.
• Growing local tax bases by increasing job availability, social services, governance and competition.
• Resiliency measures, both economic and environmental (climate).
• Inclusive economies, which means creating ways for economic advancement across all groups of people, in conflict areas, and where social strife has been an ongoing challenge.
• Helping strengthen markets and avoid constraints from the environment, social conflict, lack of productive capacity and governance.

Additionally, USAID has laid out "Six Central Principles to Guide USAID’s Economic-Growth Programs." which include: 

• Enabling self financing: USAID will help countries with issues around taxes, subsidies, market strengthening, competition and investment.
• Prioritizing inclusion, sustainability and resilience: These measures currently ensure support for marginalized groups, and also environmental sustainability along with protection of natural resources.
• Being systemic or catalytic: The idea here is that programs will be scalable and replicable when success is demonstrable.
• Be cost-effective: Show evidence that all investments made in USAID programs have a ROI (impact and financial) which also incentivize others (i.e. private sector) to act.
• Be adaptive: Encouraging testing new approaches, taking risks and not being afraid to fail, but shifting course and documenting lessons learned.
• Show the results for the American people and benefit the United States: This helps promote two-way trade and reciprocity in sale and consumption of goods and services, advancing U.S. standards and other capacity and ensuring the interests of the U.S. Government policy are advancing. 

For additional insights, please reach out to us at info@connectiveimpact.com

Want to learn more about government funding opportunities to #BuildBackBetter? Join us February 3 for a dynamic panel and workshop on strategically positioning your organization as a sub-grantee and proactively fundraising from government sources. 

How you achieve the frequently communicated goals of post-COVID rebuild, while still striving to keep programs, such as sustainable farming, implementing and sustaining school meal programs, and creating lasting peace in conflict areas, is by making the rounds, building relationships with all donor-types, and being proactive to ensure your programs get in front of a diverse set of donors. ​​

It's critical to diversify your donor audience. This is mostly due to the role collaboration plays among donors seeking to leverage their investments. In particular, public donors increasingly seek private sector initiatives to invest in, and/or new and innovative partners to work with. That trend, which has been building over the last couple of years, is not going anywhere. Impact investors, NGO impact fund leaders and social enterprises are also courting the private sector. Lines are blurring. Putting all of your attention on one type of donor eliminates the potential to tap into this increasingly popular collaborative funding model. In particular, we are seeking trends among collaborative donor programs around the following issues:

• Human rights, justice and equity challenges, including climate justice, which will be embedded one way or another in nearly every funding priority in 2021 and for the foreseeable future.
• Focusing on disruptive ideas to achieve big picture change.
• Systemic change led by communities with a clear understanding of what's necessary to rebuild in ways that keep them stalwart and strong (versus the sometimes traditional top-down development approach). 

Outside of engaging donors, consider creative partnerships. As you seek partners to work with on your programs, look for obscure and unique collaborators. Since donors are testing new collaborative strategies, you should too! This will be helpful in project implementation, research AND finding diverse funding so programs cover more bases, are capable of creating lasting change and can touch on donor interests. 

Together with your partners, evaluate your current programs and activities to determine how you can address the #BuildBackBetter funding priorities which include: 

• Programs or projects that support job growth, economic stability or COVID resiliency measures, 

• Shoring up healthcare infrastructure such as bolstering healthcare IT, security, and network capacity to accommodate the explosive shift to tele-health practices; as well as to be better prepared for future pandemics,

• Distribution of the COVID vaccine,

• Renewed focus on access to water and sanitation services, 

• Mobile education, training, communication and information sharing (and technological infrastructure in general),
• Digital finance, economic infrastructure and innovative approaches to work with disenfranchised and rural communities,

• Youth and women, especially related to new jobs, education and communication leveraged by digital transmission of information,

• Disruptive, creative ideas that allow for inspired thinking, testing and scale. This will be heavily focused on climate, health and WASH, 

• Diversity, equity and inclusion,
• Climate and climate justice. 

By keeping tabs on all avenues of collaboration, and positioning your projects to align with #BuildBackBetter priorities, you can be more assured of funding directed to your programs and projects.

Want to learn more about government funding opportunities to #BuildBackBetter? Schedule some time with us to strategize your future plans.

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Whether you are a nonprofit operating in multiple countries or a business with aims of co-funding a program or project overseas, you most likely have encountered the concept of ‘match’ or ‘leverage’ in your fundraising efforts. Bringing existing funds, in-kind resources or intellectual property to a public-funded (or in some cases privately funded) project is a very common requirement for international development proposal requests. Figuring out the nuance of each ask, which tends to differ per proposal, can be tricky. Also identifying what resources you have at your disposal, and whether they qualify, takes a process of inventory.

Let’s review a few of the key differences between “funding leverage” and “funding match” below.

(2) Examples of leverage and cost-share (match): Grantees can use other donations (public, corporate, individual, philanthropic), anticipated revenue, other receivables, technical assistance, donated services, and other resources that have a dollar value equivalent for both leverage and match (though each proposal may have specific requirements so best to confirm with the donor).

(3) Where to find cost-share or leverage: If your organization does not have existing revenue, contributions, cash in hand or in-kind resources to count as match or leverage, it’s best to find a partner that can contribute co-funding to a project or program. Essentially this partner becomes the leverage or cost-share contributor. We recommend examining program vision and mission to ensure alignment of program deliverables, evaluating goals to ensure mutual interests in the end game of the project and program, roles and responsibilities and relationships to the donor before agreeing to partner. You can learn more about finding the right partner in our free resource here.

Ultimately having an opportunity to contribute to a program either via match or leverage means the project or program has the potential to be bigger than if your organization was engaging in the project or program alone. It's a good thing! The complexities of each project proposal of course differ, but finding ways to leverage or match funding is an excellent way to ingratiate new donors and find bigger pots of funding for your program.

Have questions about your funding strategy? Schedule an audit or strategy session today.

According to the Global Impact Investing Network (GIIN), there is currently more than $715 billion invested through impact investment funds globally, roughly the size of the GDP of Colombia or S. Africa.  These investments reach companies of every size, from sole proprietor to global behemoth, and in every corner of the world. Impact investors come from global venture funds, family offices, individuals or even nonprofits. Some governments are even dabbling in impact investment.  In my work evaluating funding trends more broadly among public funders, corporations, impact investors or traditional philanthropy, I’d surmise that impact investing IS the future of funding.


Why is impact investing so hot? Consider the premise - a financial services company, with expertise in producing financial returns, couples economic returns (i.e. profit) with social and sustainable returns, thereby creating a triple bottom line (social, environmental and economic) win for both themselves AND a portfolio company. Why would a company NOT want to partner with an impact investor when it means they receive financial support AND a method to evaluate and advance the positive impact they are seeking? One could argue that any socially minded business has the potential to be a prime target for an impact investor as long as they can make money over time AND produce even minimal impact.  Even traditional banks are taking on an environmental, social and governance (ESG) lens in their investment portfolios, driven by the growing population of young, wealthy investors keen to put their money into money-making schemes that also ‘give back.’

Within the scope of measurement, financial returns are always of prime importance to impact investors. But how do impact investors show they’ve made actual social or environmental impact as well? Measurement systems are ample, but inconsistent in their depth.


What I mostly question, however, and why I am not yet completely convinced of impact investing as a solution for every funding need, is how hard it is for socially minded entities (in our client base these would be social enterprises, corporations or NGOs operating in developing countries) to get small tranches of funding they need from impact investors to grow and scale. See impact investors require certain types of financial mechanisms to work with a portfolio company. Usually this takes the form of equity or debt. In some cases there are hybrid mechanisms that take the form of lines of credit, or other financial debt instruments, but more than likely, to access investment capital a company must be willing and able to take on debt. This makes sense, since an investor needs skin in the game, and must have its investment paid back over time, but what about those companies that simply aren’t able to take on debt? What about companies or programs that have literally only just begun, and their returns aren’t measurable? How can these organizations tap into impact investments? How can these well-intentioned companies begin to thrive in a burgeoning impact investment market when what they really need is grant money, free money, startup, flexible money that isn’t tied to a portion of their company or debt? I really struggle with this question when I hear about amazing women and men starting companies in tiny villages, or in remote parts of the world, keen to test new systems, or solve ongoing problems, particularly around the Sustainable Development Goals (SDGs). If impact investors do want to make a difference as they say, and track real impact around the SDGs, be partners with business owners worldwide, and help buoy global economies during times of uncertainty, how will they manage to work with the millions of small businesses that need flexible funding to get started, grow and scale?

I pose these questions with a true curiosity and intent to find some answers. Existing clients are exploring the impact investment space as an alternative to traditional philanthropic grants or public funding. Understanding the role impact investors will play as the social investment space evolves will be a priority for me. I open my door to discussion, to information, to questions or more.