By Brian Keel and Bruce Berglund
Recently we joked with a colleague that fundraising used to be a bit simpler. Find a lead donor, 10 acres and raise the rest of the support to make the project a reality!
Today, most of our projects include multiple partners, sophisticated financing and lots of stakeholders around the table. While this complexity requires all of us to take more time and use more finesse, the effort allows bigger, more impactful projects to become reality.
Some people call this strategy a “capital stack.” We’ve called it a “confluence of revenue streams.” Whatever the name, it is a strategy whereby a nonprofit activates as many different revenue streams for their project as they can. Not only does this dramatically increase their chances for success, it also invests more people in the project… and thereby connects them closer to the nonprofit’s mission.
What elements might be used to reach a fundraising goal?
- Private/Individual philanthropy
- Corporate support/sponsorship
- Foundation or public grants
- Municipality or school district support
- Healthcare partners
- Not-for-Profit/For-Profit project partners
- Tax credits and incentives (local, state, federal)
- Real estate asset redeployment
- Smart debt (recasting or new debt within acceptable ratios)
- Organizational reserves or endowment proceeds
- Program-related investments by foundations
- Unique, short-term government funding opportunities
- Impact investing
Each organization needs to assess the options available to them, and the board must identify which options are appropriate for the organization to pursue. However, taking the time to look into these options can drastically change your ability to fund your project and get to the work of your mission.
Let’s say your organization tested a $35MM project for which your fundraising feasibility study indicated that you could raise $28MM-$30MM. Before reducing your dream and project scope, consider the other sources of support that could help make up the funding gap. Consider also how these funding sources may play into your operating pro forma after opening. In the end, your organization’s dream may still be in reach, even if individual philanthropy will not be enough.
We are truly better together with partners and additional stakeholders around the table. Wondering how to begin or if a particular revenue stream might be right for your organization? Contact us for a free one-hour consultation to gain a better understanding of the options and how you might move forward.
If you’ve had experience using multiple revenue sources for a project you’ve done, let your colleagues know more about your experiences in the comments below!