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  • Seed Money for Nonprofits – 11 Keys to Success

Are you forming a new nonprofit and think the grant money will just pour in the second you start asking for grants? Maybe it will, but more likely than not, you will find it challenging to find foundations and corporations that want to invest in an organization without a track record, no matter how wonderful your cause.

Do not let that dissuade you, however! Here are some specific tactics to setting your organization up for success and finding the funding you need to achieve your goals.

1. Be a partner

Make sure that you have at least two solid community partners invested in working with you, with letters of support to prove it. If you cannot show a track record to foundations or other donors, what you can do is piggy back off of the success of others.

No nonprofit is successful by itself – you need the investment of the community and those that are already working in your field. Brainstorm who can help you achieve your goals. If you want to provide a service for youth, for example, find a school to directly partner with you, or a Big Brothers Big Sisters chapter. An institution established in the community will give you clout, as well as much needed program focus for your first year or two.

2. Be a model

Start small. Say that you want to be a local, model project to replicate later on in more cities, countries, etc. You can reduce your start up budget this way, but, more importantly, you can accomplish one organized project that gives you the track record you need to get the funding you really want.

You can also work out the kinks in your strategic plan through trial and evaluation! This shows serious responsibility to funders, and they will be more likely to take a risk on you.




3. Be very important

Link yourself to the most critical issue in your community. If you want to start an animal shelter, and the biggest issue in your community is crime, create a project goal to train rescued dogs to serve as watch dogs for elderly residents.

That way, with little financial investment, you are linking yourself to the most important need in your area.

4. Be sustainable

Frame your ask in such a way that it is a “one time investment” for a very well thought out self-sustaining financial model. Say you need initial investment to recruit volunteers to eradicate the need to hire staff, or that you are building an online base of supporters and need seed money to form your social media strategy. The goal is to show you will not need much help to keep the lights on in the future.

5. Be irresistible

Find the niche in your program work that is the most attractive – and sell that, no matter what percentage of your actual work it comprises. If you donate some of your urban farm produce to food banks, for example, use the children eating vegetables as your advertising focus. Nobody can resist helping starving children!

6. Be an investment

Ignore traditional philanthropy and nonprofit development models, and write a business plan instead of a strategic plan. Think about attracting investors to your business. You want to sell how you can make earned income in the near future to return their investment to them, or how you can return back on social costs to the community within a specific time period. (Read about Venture Philanthropy and How to Attract it to Your Nonprofit.)

If you plan to recruit members, demonstrate that you will have enough members within 5 years to pay back an investment in startup costs. Or show how your services to help troubled youth are displacing a percent of property crime annually at a cost of $500,000 in insurance claims throughout the community.

7. Be cheap

Cut your program costs and especially your overhead and general operating needs to the bare minimum. Operate from your house the first few years. Ask Home Depot and other local businesses for supplies instead of buying light bulbs and printer paper. If you are cheap, you are less of an investment risk.

8. Be talented

Show, via your board of directors list and your staff list, that you have extremely talented people helping your cause. Your board and staff are your champions – and if those most important people in your organization are educated, skilled, and possibly known in the community, funders will trust that you will succeed.

9. Be pretty

Make an investment and take time to make your presentation materials and website look fantastic. Appearances really do matter – and it is a minimal cost to develop a nice logo, a navigable and sleek website, and letterhead.

10. Be supported

Before you even get started on your IRS nonprofit status application, know that you have at least one investor or foundation poised to support you. You can do this by going to your community foundations and pitching your idea, or asking one of your board members or potential board members to ante up. Foundations are much more likely to support you if they see that somebody in the community is already pitching in.

11. Be trendy

Link yourself to what is popular and in fashion as much as possible. Show that you are reducing carbon emissions and improving employee health by promoting biking to your office. Or develop a mobile app to recruit high school volunteers. The idea is to be relevant, fresh, and young.

If you have no track record but great, fresh ideas, use these tricks to find the funding that will help you get on track!

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