Category: case for support

case for support, communications, fundraising, invaluable, leadership, management, planning, strategy

3 misunderstandings about nonprofits that prevent them from succeeding

It’s been six years since “The Nonprofit Starvation Cycle” was published and two years since Dan Pallotta gave his famous TED talk about the financial burdens facing nonprofit organizations. Despite these widespread, articulate, and compelling calls to arms – and a plethora of research, reports, guides, and tools – the sector continues to suffer from financial struggles that have broader impacts on its progress and success at tackling societal problems. In 2013, Guidestar, Charity Navigator, and BBB Wise Giving Alliance started the campaign to end the Overhead Myth, but letters and signatures are meaningless unless we actually put words into action.

What is it that’s stopping us from taking action? Why do we continue to do things the same way when we know there’s a problem and there are solutions at hand?

It strikes me that what drives our behavior is a set of underlying assumptions and beliefs about nonprofits – paradigms that paralyze us from doing things differently. These unspoken paradigms perpetuate the funding and management practices that keep nonprofits from thriving financially and successfully responding to societal problems at scale:

  1. The Misnomer of Non-profit. We associate profit with personal gain and nonprofits with the public good, but nonprofits are businesses, and any successful business needs to earn a surplus. For nonprofits, this surplus isn’t doled out to investors but rather it’s reinvested in the growth and improvement of the organization. Without making a profit, nonprofits live under stressful conditions and cannot expand or innovate to have more impact.
  2. The Overhead Problem. We all know the story: not enough money goes to the nonprofit enterprise – the business side of things that provides for the programs and services we all love and desire, a.k.a. “overhead.” The problem is that the overhead-to-program ratio is seen as an indicator for efficiency, when in fact, it’s actually not, and varies with an organization’s business and business model. We should care less about the overhead ratio and more about important things like effectiveness, or whether the organization is actually solving the problem.
  3. The Restricted Nature of Giving. Unlike the way we invest in for-profit companies, with nonprofits we feel we get to specify how our funding should be used, because hey, it’s our money, right? Unfortunately, this restriction on spending limits an organization’s decision-making and reflects a lack of trust that the organization knows how to spend our money wisely. We should have more faith in the people who dedicate their lives to the causes we care about and the organizations we value so much. (And if we don’t have that much faith in them, should we really be giving them our money?)

There are many different efforts out there to improve nonprofits – how to write better fundraising appeals, how to use social media to attract more support, how to manage volunteers, etc. – but those efforts will only have limited success if the deck is stacked against nonprofit organizations as a whole. Until we get at the root of the problem and change the way we value and invest in nonprofit organizations, everything else is like rearranging the chairs on the deck of the Titanic.

For more on these paradigms – and how funders and organizations can break them by doing things differently – download a free copy of Invaluable today.

 

case for support, communications, fundraising, messaging, rationale

How to write a good problem statement

When a funder asks for a problem statement (or a needs assessment), it’s an opportunity to explain the rationale for why you need support. The goal is to explain the issues while framing the problem in a way that sets the stage for your solution.

Unfortunately, I find that many problem statements don’t do justice to the work being proposed. They either don’t sufficiently describe the problem or they don’t frame the issue so that the proposed project seems like a good solution (or they just aren’t written well).

Here are three questions every good problem statement should answer to ensure you set up a compelling rationale for your proposed work:

  1. What is the need? I know this sounds obvious, but oftentimes people don’t accurately define the problem. It’s as if every organization is a hammer, so everything is a nail. You want to think about what’s causing the situation you’re trying to remedy and why it’s problematic. Describe the situation, why it’s bad for the constituents you serve, and what the barriers are to fixing it. If you set it up right, your work will be directly responsive – overcoming barriers and tackling the causes of the situation.
  2. Why is this important? Again, this might be an obvious question, but I’ve seen many problem statements that fail to answer it well. I’m sure you care about the problem and I’m sure you think it’s important, but why should I as a funder care? Why does this problem matter to the things I care about? Think about your audience and consider the broader impacts of the problem. Another way to frame the question is “so what?” Keep asking that question until you get to a compelling reason your audience will care about as much as you do.
  3. Why now? Funders have lots of proposals in front of them, and usually a limited budget for grantmaking. There are others who will also make the case that their work is important, so why should they support your work this year and not next year? You can frame this in two ways: either state why the situation is so dire it demands action now (crisis), or state why the conditions are ripe now for action (opportunity). Either way, make the case for why your work needs to happen now (or soon) to maximize impact.

Remember that you are not your target audience – you know more, you believe more, and you probably care more. Crafting a compelling argument requires understanding your audience and using solid reasoning. And it never hurts to test it out with people outside your organization – loyal donors, committed funders, or volunteers.

Whatever you do, make certain you have a convincing problem statement. It’s the first and critical step to garnering support for your work!

case for support, communications, fundraising, messaging, planning, strategy, theory of change

The key document your organization is missing

In my experience, most organizations have at least two key documents: a strategic plan and a fundraising plan. A strategic plan explains what you hope to achieve and how you plan to achieve it, and a fundraising plan explains how you plan to raise the money you need to execute your strategic plan.

More sophisticated organizations have two other important documents. The first is a theory of change, which describes the context, rationale, and purpose for your organization. The second is a communications plan, which describes how your organization plans to advance your program goals by building a base of support.

Yet even with these documents to guide the organization’s work, several organizations still suffer from a common problem: an inability to consistently articulate their organization’s value. It is often difficult for them to clearly state why the work they do is unique, important, and worthy of your support. And frequently different members of the organization – staff, board members, volunteers – will talk about the organization differently. Many of the organizations I work with come to me claiming they are not all on the same page about who they are, why they exist, and the work they do.

And this is a big problem. An unclear or inconsistent message about your work makes it difficult to build a base of support. People have a hard time getting behind your organization if it is unclear what it does, and it’s hard to present a strong brand that is both compelling and recognizable if there are lots of different messages out there about who you are and what you do. Perhaps most importantly, not being able to articulate your unique value makes it challenging to solicit funding. After all, if you can’t clearly state why your organization is so important, why should someone give money to you instead of one of the many other organizations out there?

The document most organizations need (but rarely have) is a case for support, also called a case statement. A case for support is a brief, clear, donor-oriented document that states why you need – and deserve – funding. It is the source document for all your fundraising and communications activities, and it is the prayer book that gets everyone in your organization singing from the same hymnal. It takes your theory of change and your strategic plan and synthesizes them into a statement about your organization’s unique value that you can use to build support for your mission. And it should be the precursor to any fundraising and communications planning; the case for support says how much you need and why you deserve it, while the fundraising plan says how you will raise it and the communications plan says how you will build a base of support to achieve your mission.

A case for support is just that: an argument for why someone should support your organization. We all need support to achieve our missions, so shouldn’t we all have a case for support?

For more on a case for support – what goes into a good case for support, how to develop one, and how to make it compelling – check out The Foundation Center’s upcoming webinar, “The Nonprofit Rosetta Stone: Making Your Case for Support” on Tuesday, March 31st. Register today!