I scheduled a call as requested. A week later, my heart jumped when the woman who had emailed me started our call with, “I represent MacKenzie Scott and she wants to make a significant gift to the Freedom Fund.” I waited with bated breath to hear what was meant by “significant.” Hearing “$35 million,” I was sufficiently stunned that I asked her to repeat the amount, slowly, as I suspected I may have misheard. I hadn’t. Our annual budget at this stage was $18 million. What’s more, the proposed funding was completely unrestricted, meaning it was entirely up to the Freedom Fund to decide how to spend the funds. We could spend them in one year, over multiple years, or put them into an endowment. We could spend them on programs or fundraising or on our own infrastructure—such as purchasing an office building—or a mix of these. Our sole obligations were to (a) keep the news confidential until it was publicly announced by Ms. Scott, and (b) provide her team with a three- or four-page summary each year for three years on the work of our organization. That was it. The $35 million was deposited in our bank account a week later, and a public announcement was made a few weeks after that.
I hesitate to open this chapter with this story, which clearly falls at the far end of the fundraising spectrum. As such, can it hold any useful lessons for other organizations? For most small nonprofits, a $5,000 donation is a big deal, and rightly so. But I do think this experience, even though it’s an outlier, is still illustrative of important elements of the fundraising process. For a start, it’s not a unique experience—as of early 2023, Ms. Scott has now given away over $14 billion to over 1,600 nonprofits.2 But the larger point is that big gifts don’t just fall out of the sky. Not even this one.
Several months before this call, we had been approached by the Bridgespan Group, the world’s largest philanthropic consultancy firm, operating on behalf of an anonymous donor, who had asked it to carry out due diligence on the Freedom Fund. We went through an exhaustive process with them: sharing several years’ worth of accounts, board papers, detailed documentation of our impact and monitoring processes, strategic plan and operating plans, and participating in a couple of probing meetings. Again, I was conscious that Bridgespan had acted for Ms. Scott in the past, but they also acted for hundreds of other donors, so I had no way of knowing if this process would lead to any specific commitment by Ms. Scott or any other donor. After hearing nothing from the company for a couple of months after the due diligence, I’d largely given up whatever faint hope I had that this could be the prelude to a big gift.
And arguably, the process didn’t even start with Bridgespan outreach. We were only in a position to attract the attention of Ms. Scott and Bridgespan, and to pass the scrutiny of such an exhaustive process, because of the quality of the organization and the impact of our work. And those were many years in the making.
THE COMPONENTS OF SUCCESSFUL FUNDRAISING
There are no shortcuts to fundraising. There are many components that go into effective fundraising, and the more of these you can draw upon, the more successful your fundraising will be. They include:
A compelling cause
A clear strategy
Commitment by the leadership to fundraising efforts
A powerful story of what you have done, and plan to do
Demonstrated impact
A credible team, starting with the CEO
An ability to build relationships with potential donors
An ability to maintain relationships with existing donors
A record of delivering on your commitments
The mix will differ for each organization and will change during the life of a nonprofit. A start-up nonprofit won’t have demonstrated impact, so its fundraising efforts will rely more on strategy and story. A well-established nonprofit will have a demonstrated history of impact, so its fundraising will likely highlight delivery, relationships, and future plans.
At the heart of all successful fundraising efforts are relationships. You need resonant relationships with your funders, particularly when raising from foundations and philanthropists. You also need a strong relationship with members of the public, or governments, if you are seeking contributions from them—though in those cases the relationships will be different, and other factors may have added weight. And the starting point for relationships is the attitude you bring to fundraising. If you don’t have the right mindset, you will struggle to build the relationships you need.
LEADERS MUST EMBRACE FUNDRAISING
Your organization may have a compelling mission and strategy, outstanding staff, a track record of impact, and exciting opportunities ahead of it to drive powerful change, but if it can’t mobilize the necessary funding, then it will struggle to achieve its objectives. The case for the importance of fundraising is as straightforward as that. As the leader, you are responsible for ensuring your organization gets that funding. You can do that yourself or via colleagues, but however you do it, you are ultimately responsible. You will be a much more successful fundraiser if you embrace that truth instead of having to be dragged kicking and screaming to the fundraising table.
Many CEOs feel deeply uncomfortable about fundraising, and I understand that. Some think that, given they are working on a powerful cause, the best use of their time is to focus on the issues and delivery and not on asking donors for money. But there will be no delivery if you don’t have the funding you need.
Others think that asking for money is beneath them, or somehow tawdry. But until you come up with a different funding model, then to the extent that you require donors to give to your organization you will need to accept that almost all nonprofits have to ask donors for funding. Very few nonprofits generate substantial funding of their own, so most need to rely on others to provide financial support. The sooner you accept that reality, the better placed your organization will be.
For myself, I’ve enthusiastically embraced my fundraising role, as I see myself, as CEO, strongly placed to make the case for the impact and change that donors can support by funding the Freedom Fund. And, in turn, the more successful we are at mobilizing funding, the more ambitious we can be. I find that highly motivating.
THE IMPORTANCE OF RELATIONSHIPS
When you are asking people to give to your organization, you need to persuade them that they should support your cause and organization over others (or in addition to them). To do this effectively, you need to tell a compelling story, and you need to build a resonant relationship. Donors give to organizations that align with their values and interests, and in response to perceived needs.3
Then, when they become donors, you need to maintain that relationship—both to honor the giving, and to encourage their ongoing investment. The research shows that connections and a relationship with nonprofit organizations are key drivers of charitable giving.4 As I repeatedly remind my staff, every existing donor is a potential future donor; you want them to renew their funding when their current grant expires and to stay involved with your organization.
I take donor relationships a step further, and generally try to stay in touch with funders even when they have stopped funding our organization. I do this first because they have already provided funding to the cause I believe in, for which I remain thankful. And secondly, a former donor can always become a future donor or, if not, they can still be a powerful advocate for your work and help persuade others to support your organization.
There is no secret to building a strong relationship with a donor. It’s much the same as building any resonant relationship. You need to engage them in the cause, the organization, and the change they can contribute to. You need to do your research and ensure that you understand their priorities and can make a compelling case for why they align with those of your organization. Nothing is more frustrating to a funder than someone pitching them for something completely unrelated to their known interests, without any effort to build a meaningful connection. Wearing my other hat, as a funder (as the Freedom Fund has provided financial support to some 150 grassroots organizations around the world), I often get unsolicited appeals for funding from organizations. Too often, they haven’t taken the time to find out which countries or regions we work in or, sometimes, the issues we work on. This is a waste of everyone’s time.
A common mistake that fundraisers make with donors, particularly with those making large gifts, is to make the relationship overtly transactional. Donors become understandably irritated being treated primarily as a checkbook and subjected to aggressive pitches on why they should donate. Of course, the relationship has a transactional element— you are asking someone to give your organization money, after all—but being treated solely in terms of their ability to give is problematic for most donors. This is why you and your organization must invest in the relationship before making any pitch. Build the relationship, engage on the cause, and then you can talk about how the funder can contribute to advancing the mission.
INTERVIEW
The Challenge of Raising Funds for a Start-Up Nonprofit
Observations from the CEO of a start-up education charity, based in Europe, working in Africa to support educational institutions.
When I took over as CEO we had just over one year of funding and very weak prospects. Fundraising was the element I was probably most nervous about and so this is the issue that gave me the most sleepless nights. In a way I didn’t realize quite how urgent the situation was, which I think was a good thing as it meant I concentrated on the things that ultimately got us back on track: clarifying our strategy and narrative and embedding a strong senior team. Panicking would have been a very bad option. At the same time I did go knocking on pretty much any door I could find and I was lucky enough to have an energetic chair who found a huge number of doors for me to knock on and knocked on quite a few himself.
Ultimately, I spent a lot of time in conversations that went nowhere but as a consequence, I am now an absolute expert on what will and won’t waste my time and I think probably everyone has to go through that phase if they don’t have the previous experience. But the lesson I really want to draw attention to is about holding your nerve and the importance of believing in what you do. I believed in my team and our mission and I knew what we were delivering could make a difference. I wasn’t blindly optimistic, I knew this wasn’t enough to succeed in fundraising, but it motivated me. Even if we had to radically downsize or shut up shop I knew that right until the last day we would be having a positive impact in the world and that wouldn’t have been a waste of time. This is what allowed me not to pass my concerns onto the team beyond the senior level team and what allowed me not to panic even with them.
The other critical component was the support of my board, particularly my chair and treasurer. I never felt like I was in it alone and like good coaches, they cheered me on and helped me stay focused whenever I felt like panicking. I know several CEOs have difficult relationships with their boards and I simply don’t know how they do their jobs.5
FUNDRAISING CAN BE TRANSFORMATIVE
I was deeply apprehensive about fundraising when I took up my role as CEO of the Freedom Fund. I had experience in leading organizations, running programs, and other key areas of leadership, but I had never had any significant direct fundraising responsibility. What if I wasn’t good at it? Fundraising on an ambitious scale was defined by my board as one of my primary objectives. Specifically, our strategy called for us to raise $100 million in six years—a daunting target for any incoming CEO, let alone one of a start-up.
I had no choice but to embrace the challenge. My first step was to reframe it. I internalized that we had a powerful cause and strategy and the backing of some visionary philanthropists. That made the Freedom Fund an attractive partner to potential funders, and I decided we should be looking to build partnerships, not just donor–recipient relationships. Given that we had a donor board,* I could make a strong case to potential donors: they had the opportunity to invest and participate in a powerful new initiative with like-minded partners, including by joining our board. They could become a part of something bigger than themselves and use their funding and power for good. So framed, the relationship was less transactional and more transformative in nature—for both the donor and the recipient.*
I soon found that I enjoyed making the case to potential funders about why they should get involved. I got energy out of sharing with others how their resources could help the Freedom Fund transform the lives of some of the world’s most vulnerable people. And I discovered that singing the virtues of something you believe in deeply is not hard, particularly when the purpose is to increase your resources to do that work. We ended up raising over $100 million in our first five years, and $200 million by the end of our eighth year.
Funders who embrace their role as partners generally find the experience more rewarding and engaging than those who view their role simply as providing funding and nothing more. At the Freedom Fund, most of our big donors have become valuable, multi-year partners. Many are represented on our board.
However, even when you are successful in your fundraising, and even when you have a strong partnership with your donor, a significant power imbalance usually exists between you, in favor of the donor. This is more the case with some donors than others, but the imbalance is always there. But steps can be taken to rebalance the dynamics, as we’ll see.
