When it’s time for your nonprofit to meet a need, do you first start a program or fund the program? Do you go seek funding or start by getting funding before you start the program?
It’s the old “chicken or the egg” dilemma.
The truth is that it’s hard to get money without clearly defined programs and proven success. You’re basically asking people to trust you that you’re going to do something worthwhile.
It’s also hard to start a program without money to pay for facilities, staff, and supplies. Typically, people like to get paid for the products and services they provide.
So, what do you do?
If you’ve been building a donor base of people who give because they love your nonprofit’s work, there’s an easy answer – ask for their support to fund the program before you start. You’ll raise some (if not all) of what you need to get the program up and running.
If you haven’t been building a donor base, then you’ve got a harder task ahead.
Here are 6 ideas for funding your new or expanded program.
Before you start or expand a program…
The world is full of people who want to help others but these days “helping” isn’t a good enough reason to start or expand a program.
Funders want to know that you’re doing something that matters, addressing a real need and providing a solution that gets results.Don’t just start a program because it feels like the right thing to do. Start a program because you can prove it’s the right solution with outcomes that warrant the funder’s investment. Click To Tweet
Before you start a program, think it through by asking these questions:
What’s my funding plan? How will you pay for the program both initially and long-term? Will the program generate fee-for-service revenue from those who use the program (like a counseling service) or bring in donations from program participants (like a thrift store)?
- Does the program fit the nonprofit’s mission and strategic plan? It’s tempting to start a program for all kinds of reasons, but the most important one is that the program helps fulfill the nonprofit’s mission. Otherwise, you start to experience mission creep which isn’t healthy for the organization and very difficult to fund long-term.
Is the Board supportive? The Board should be in favor of the new or expanded program. As the ultimate trustees of the nonprofit, if they aren’t in favor of the program, there’s a serious discussion that needs to take place to get everyone on the same page.
Does the program duplicate a service that already exists in the community? Your community probably doesn’t want or need two of the exact same service and savvy funders aren’t interested in funding duplication of services. They want to invest in something that is meeting an unmet need. Think twice before you start down a path to do something that the nonprofit down the street is also doing.
How will you find people to USE the program? Marketing is critical for any program so that you find the people who the program is intended to serve. Having a marketing plan to recruit program participants is critical. (It’s definitely not “build it and they will come.”)
How will you evaluate the program? It’s important that you think about evaluation before you begin the program so you’re ready to measure success once it starts. Think carefully about the outcome(s) your program will create and how they demonstrate that your program is making a difference in the lives of those it serves.
What resources will you need (time, people, facilities, systems, etc.) to successfully operate the program? What resources will the program need to get started and what will it need when it’s operating at capacity? Staffing, facilities, and equipment needs can change depending on the number of program participants, so map out the growth plan ahead of time and match it up with your funding plan to make sure things get paid for.
Once you’ve thought through and carefully planned your new or growing program, it’s time to find funding.
Ideas for funding your new or expanding program
Here are 6 ideas for finding funding for your new or expanded program:
- Talk with donors who are likely to care about your vision for the program and what it will do. Here’s where having a donor base comes in super handy and it’s even easier if you’ve been paying attention to what your top donors are especially interested in.
- Look for seed-money grants. These grants aren’t the easiest to find, but they are out there. Start with your local community foundation as they’re most likely to be interested in meeting unmet needs in the community.
- Search out collaborations with other nonprofits who are doing something similar to see if there’s a possibility of working together. You may be able to create an arrangement where you can start your program without the full burden of funding it all yourself. For example, a local church might give you space and volunteers to operate your new food pantry — saving you money you might have spent on rent and staff.
- Investigate the possibility for the program to be self-sustaining with some kind of fee for service. One of our animal rescue nonprofits was in a rural area with no local emergency veterinarian. They had space in their facility that was sitting empty and really wanted to use it to hire a vet to join their staff. They hesitated because it seemed like a huge investment. But, the more we talked about the need for an emergency vet in the community plus their need for a vet on staff, we decided it was worth more exploration. Once they crunched the numbers, they were pleasantly surprised to see that once the on-site vet clinic was up and running, it would add several thousand dollars to the bottom line in vet bill savings. Plus they could provide a needed service to the community by providing an emergency vet service. It was a win-win, and they just needed a small amount of money to get it started.
- Host a small fundraising event if you only need a small amount of money for startup costs. You may be able to pull together a group of your most loyal donors to give them a sneak peek at the program and ask for their support in getting it started.
- Get a small loan or a credit card to fund the initial costs, especially if it’s not much and the program will be self-sustaining quickly so the loan or credit card can be easily paid off. This is not a great option and not my first choice, but when push comes to shove, it can work, especially if the startup period is brief.
What WON’T work to fund a program
Here are some funding strategies that are sure to disappoint you:
- Crowdfunding with the expectation that people will find your wonderful cause and give to support it. Crowdfunding can be a great tool, but don’t expect millionaires to cruise through GoFundMe looking for amazing projects to fund. It doesn’t work that way.
- Facebook fundraising with a simple post asking for money. While you can raise some money with Facebook, unless you have a large following and people are used to giving online, it’s unlikely you’ll raise what you need to start or operate your program through Facebook (or any other social media channel).
- An interview on local tv or radio or newspaper. There’s nothing wrong with getting a little publicity for your cause, but you won’t raise what you need in a single interview.
- One announcement in your newsletter isn’t enough to tell the story or ask for the kind of support you need. You’ll need to ask several times in different formats to reach the majority of your donor base to get their attention and possibly their support.
- A fundraising letter sent to a rented list or the list of businesses from the local Chamber of Commerce. Direct mail is a great strategy for acquiring new donors, but not the best idea for getting startup or ongoing funding for your program.
Why you need funding before the program starts…
Hopefully by now, you understand how important it is to secure the future of the program before it begins by lining up funding first.
If not, let me spell it out for you. If you start a program without thinking it through and without the funding you need, you could experience
Failed partnerships with other nonprofits
Damage to the nonprofit’s reputation in the community
Damage to donor relationships (VERY difficult to recover from) when they see your program stumble or fail
Turning people away because you can’t serve them
Shutting a new program down that just got started
Feeling like a failure
The Bottom Line
Before you start or expand a program, think through all the details of the program to be sure it addresses a real need and provides a real solution. And make sure you have a plan for funding the new program both during its startup phase and as it continues into the future.
Planning ahead and being prepared will save you from a lot of frustration and sleepless nights later.
Join the conversation. What experience do YOU have to share about funding new programs or program expansion? Hit the “comment” link and let us know.