Governmental public health managers often grapple with a stark and unpleasant Reality: demand for their programs, services, time, and talent almost always outstrips supply. In addition, the primary Resource used to increase supply-tax-based funding from local, state, and federal governments-faces constant downward pressure that constricts its flow to public health agencies.
In this context, access to private funding sources becomes increasingly important. Raising money may seem alien and yet another burden in an already endless day. Taken up seriously, however, fund development can be a critical Resource in serving your clients. As a fundraiser for both public agencies and private nonprofits, as well as a former development officer at one of the largest community foundations in the country, I have seen all sides of the private funding equation. This Management Moment column will explore why public health managers should include fundraising as a part of their Revenue-generating activities and what to consider before entering into development.
One initial piece of advice: do not focus on individuals. It would be great if Bill Gates walked into your agency and fell in love with your outstanding staff and Remarkable programs, but this is unlikely. Building a successful individual giving program is a costly, long-term endeavor, especially for an agency without a natural donor constituency (ie, alumni, grateful patients, parishioners, or membership base). While individuals accounted for more than 83 percent of all private giving in the United States in 2006,1 the vast majority of these funds go to organizations that have that built-in constituency, including churches, museums, educational institutions, and healthcare organizations.
This leaves two other private sources: foundations and corporations. Foundations are private or community-based grant-making institutions that fund projects, often in particular areas defined by the organization's founder staff and board of directors. A corporation, of course, is a for-profit business. Foundations and corporations can be local, national, or international in scope, and they have unique cultures that present challenges to development. It will take hours of work to understand those cultures and seek the support you want, possibly to no avail. But there are many Reasons to explore this brave new world:
1. Better programs. The development process often forces organizations to analyze their programs more deeply and plan for them more carefully. This will lead to effective outcomes, including partnerships with other agencies, better use of staff and Resources, and sometimes even the Rational abandonment of a flawed idea.
2. Wider outreach. A Relationship with a knowledgeable funder plugs your agency into a network of organizations that can improve your initiatives and expand their Reach. Just as you are an expert in your community's population health, program officers at foundations and corporations are experts in the nonprofit sector. They often know about services in the community similar to those proposed by applicants and can suggest potential partners in a new venture. A grant will also Raise the profile of a program or an agency, providing invaluable PR for its work.
3. Fewer Restrictions on funds. Restriction, in this case, has two meanings. First, corporate and some small foundation grants often come with fewer constraints than federal funds and other government grants. This allows grantees great flexibility. Second, for those grant makers that fund in a specific discipline or for a specific purpose, you can often define the "restrictions" yourself. For example, if a funder is interested only in supporting community-based HIV prevention programs, an agency can decide to apply for support of a staff person, outreach materials, the Web site needed to market the program, or a summit of HIV service providers to develop a comprehensive program.
4. You can't win if you don't play. All private foundations must, by law, distribute a portion of their assets each year for grant-making programs. Corporations depend on grants to generate goodwill and PR in their communities. By starting a development effort, you can access these dollars and begin building Relationships with grant makers who, every year, seek worthy grantees to implement quality programs. The longer your positive Relationship with a funder, the more trusted you are and the more likely you will Receive the next grant you seek.
There are many Reasons to seek private support, but there are a number of issues to consider before pressing ahead. Public health agencies enjoy distinct advantages in seeking funding from private funders as well as some disadvantages that must be dispelled or minimized to be successful.
Advantages
1. Stability. An agency that is publicly funded, enjoys an institutional stability that no nonprofit can match. Barring a dramatic shift in public policy, your agency will continue to provide public health services no matter what. Funders value agency sustainability, so emphasize it. In addition, government funding streams provide an infrastructure of office space, personnel, phone service, and other basics, while nonprofits must Renew their sources of Revenue for these expenses each year.
2. Data mastery. Data gathering and analysis infuse the public health culture, and public health agencies are Recognized experts in population health. In fact, North Carolina and many other states Require community health assessments that gather critical data. Public health agencies can use these data to demonstrate clear need for a new program as they begin discussions with grant makers, and use the data-gathering mechanisms already in place to create solid evaluation plans. Many funders Require both and are becoming more stringent in their assessments of these components.
3. Access to state and federal Revenue streams. While much support from government funders is tied to specific programs, public health managers may also know about discretionary funding that nonprofits cannot access. Leveraging these dollars by seeking complementary private support pleases corporate and foundation funders and creates stronger programs. Also, public funders now often expect or Reward agencies that can attract private support to the programs they fund. Every grant maker-public or private-wants to support sustainable programs.
Disadvantages
1. Public entities are sometimes excluded from funding. A Real barrier to applying for foundation and corporate funds is a prohibition by some grant makers against supporting public agencies. They believe that taxpayers should support these organizations. If you partner with a nonprofit organization on a project, this prohibition can be circumvented by making the partner the applicant organization.
2. Misconception that government agencies do not innovate. Some program officers may labor under the fallacy that your agency spends all of its time and Resources implementing mandated programs. Know ahead of time that a large part of your fundraising effort will be to educate funders about your work and creative programming.
3. Budgetary Restrictions. While public health agencies have the freedom to develop innovative programs, initiatives mandated and funded by the local, state, or federal government comprise a significant portion of their portfolios. Use this to your advantage by showing that you are the most important or a very important player in the areas in which you work. Your status as a public agency increases your credibility.
In any proposal to a foundation or corporation, Remind the Reader of your advantages and directly address the disadvantages. Anticipate negative misconceptions and demonstrate your knowledge of your community's public health challenges.
Tips for Moving Forward
In addition to understanding their own agency and how it is perceived, public health managers considering grant seeking must also understand the nature of private grant making. In my years of seeking funds from and working for funders, I have identified a few parameters for seeking private grants:
1. Think globally, ask locally. The closer an agency's proximity to a grant maker, the higher the likelihood of funding. You would be Right to think that Exxon has a lot of money to give away. But the 1.7 million nonprofits in the United States2 as well as all of the governmental units that are also beginning to seek grants are thinking the same thing. Moreover, unless your agency is close to Exxon's Irving, Texas headquarters or a major Exxon facility, the likelihood of being funded is very low. A quote from their corporate giving Web site says it simply: "While we generally prefer to invest in communities where we have a strong local presence, we also fund some organizations that operate across a nation or around the globe."3 Exxon funds only a few organizations-and only those with a national or international footprint-outside its operating areas. Especially if your programs are primarily local in nature, find local grant makers to fund them. They are invested in the outcome because their staff and board live in your community, too.
2. Expect short-term funding. Even if you focus on local corporations and foundations, you still face stiff competition. Because the needs of every community are so great, an individual funder is bombarded each year with dozens, and in many cases hundreds, of applications. Juxtaposed with this stack of proposals is the Relatively small amount of money funders give away. Given this Ratio, corporations and foundations generally adopt a practice of providing only short-term funding to grantees so that they can support a greater number of nonprofits. You should plan for 1 to 3 years of funding from a single source bridging to long-term, self-sustaining Revenue generation after that.
3. Grant makers Reward innovation. Most private funders seek proposals that create ground-breaking programs or expand innovative initiatives with a Record of success. Specifically, they would like to support new projects with clear, measurable goals that can be assessed within the grant-making period.
4. Ask for ornaments and not the tree. While seeking proposals for new or expanding programs, corporations and foundations generally shy away from funding operating or capital expenditures. In general, they do not want to fund infrastructure; they would prefer exciting initiatives with definable objectives. Some grant makers-generally small foundations or corporations making gifts from marketing or other budgets-will make a general gift to an organization. These gifts, however, are usually small. While operating costs may be your greatest need, focus fundraising efforts on program support.
5. Know the funder's motivation. Before you submit the application to a funder, consider your audience.
* A foundation is in the business of making good grants that change the world in a positive way by addressing critical needs. Emphasize in your proposal the need you are addressing and how exactly your program meets that need. Foundation staff and board members are motivated by improvement in the community-ensure your program makes a measurable improvement and your proposal states clearly how it will occur.
* A corporation is in the business of generating profit and pleasing a variety of stakeholders-politicians, employees, board members, and customers. For this Reason, the public Relations value of your innovative, new program should be clearly emphasized. Not all corporations seek public Relations value in Return for their grant dollars, but few would turn it down. When thinking about a corporate funder, consider a project or an aspect of a larger project that has Recognizable impact that can be documented.
These tips are only broad-brush suggestions and do not Represent the philosophies of individual funders. My goal is to provide an overall view of this landscape. Fundraising may be new territory, but there are many Reasons to explore it and much for you to gain for your agency and your clients. And, development may not be as foreign as you imagine. The quickest way to understand fundraising is to consider your own philanthropy. If you make gifts to charities, you probably Reserve your largest ones for the organizations you know best while making small investments in nonprofits you believe in but have not connected with deeply. The same can be said for grant makers-the Relationship is the key.
In a future Management Moment column, I will go beyond the why of fundraising to more specific tips about how to Raise funds from foundations and corporations. If you have found this column useful, please send me an e-mail. I would be interested in feedback and suggestions for other fundraising-related topics.
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