As a member of the advisory committee for the LA County Center for Financial Empowerment, I had the honor of speaking today on the “Meet the Funders” panel at the CFE’s first-ever Financial Capability Summit. Here’s the session description – if this looks interesting to you, read on for the specific questions our moderator asked us to prepare in advance, and my own notes on what I planned to say in response.

For many nonprofits and government organizations, the elusive grant and what it takes to attain one can be like winning the lottery. Luckily, securing support from funders has better odds! This session will discuss key strategies financial institutions and philanthropic foundations use to determine who and what they fund. Hear directly from some of LA’s leading funders supporting financial capability programs, and learn about their priorities and how to build a successful funder partnership.

How to Build a Funding Relationship

• Can you share what compels local philanthropic foundations to fund financial capability programs and services? What are key factors that align with their priorities and compels them to fund?

What alignment looks like is going to vary by funder. There’s a saying, “If you’ve seen one foundation, you’ve seen one foundation.” You can’t put your grant requests on mailmerge mode. It just doesn’t work. Believe me, I’ve tried.

You have to do the basic homework. Look at their website for their guidelines. That may or may not help, some guidelines are so broad anything could fit. Then you look at their grant examples if they’ve got any posted on their site. You can look at their 990s on Guidestar to see their lists of who funded them each year. You can also look at the websites and 990s of other orgs that are like you, to see who funded them, and then go research those ideas.

So then if you see an org that funded something else like you, yay and you can proceed to reach out and try to build that relationship! If not, hm, you could be the first one that they fund in a new category, it’s totally possible – but that’s harder, and you’ll want to decide if you’re up for investing the time.

Because probably you’re going to be talking to the program officer, who looks powerful from where we sit – but they are not the decider. They are working within someone else’s strategic grantmaking framework and they probably don’t have the authority to go outside that. You’ll be trying to persuade them that they will be able to turn around and persuade someone else – a lot of someone elses, usually their board – who are usually a lot farther away from the work than you and the program officer are. It’s risky for them. It’s a risk that they’ll be wasting their precious time on something that may not get approved, and most of them are super stressed and overloaded – and it’s a risk that their reputation might actually suffer for putting forward something that’s not what they’re supposed to be doing. It’s weird, because we see them as powerful – but they have bosses and grandbosses and great grandbosses. It might be different if it’s a family foundation and you’re talking with the family patriarch or matriarch – or if it’s a program officer who has a certain amount of discretionary grantmaking they can do, and you’re asking for an amount within that range. So that’s what you’ll learn as you’re doing your homework and then if and when you start to build the relationship.

• Because foundations are so varied, how would you recommend financial capability nonprofits begin to identify and engage these philanthropic foundations? What are some effective approaches, including those who have open submissions and those who are invitation only?

I believe in fundraising from the heart. Sustainable fundraising is all about relationships, connection, helping each other like friends and partners do, because you care about the same things.

Of course there’s a power dynamic, because money. But really, truly, you are partners. They exist to fund you! They need you! They are nothing without you! Right? Their whole reason for being is, we are going to change the world by giving money to nonprofits. They want impact. You are offering them the opportunity to figure out together whether you can give them the impact they want. You are genuinely exploring whether you can be a resource for them just as they’re exploring whether they can be a resource for you.

In fact I say that in emails to potential funders of my current organization, Southern California Grantmakers. “SCG helps funders learn, connect, and take action including around XYZ issue where I know you are a leader in the field. In particular our blah blah blah initiative might be an opportunity to advance your goals around XYZ. I’d love to learn more about your work and explore whether we could be a resource for you.”

And it takes time, usually. Fundraising is relationships and relationships are trust and trust takes time. I’ve definitely been there at previous orgs where you’re barely making payroll, and it’s really hard under those circumstances to invest time. But there’s a saying about individual fundraising that I think is really true for institutional fundraising too: “Asking for money shouldn’t be applying pressure, it should be relieving pressure.” The ask should come at the point where they are so excited about your work that they are like, “I have got to be part of this!” And you’re like, “Aha, I have the perfect solution, you can fund me!” So you will get your best results, your best SUSTAINABLE results, when you can take the time to get to that point.

As for how to get that first connection to someone who’s willing to talk with you – I wish there was magic. Some funders make it easy to contact them, yay. Otherwise you get creative. Ask your board for connections. Look on LinkedIn to see if you know someone who could introduce you. Go to events where they’re likely to be in the room. If they’re invitation only, maybe you know people at one of their grantee organizations who could introduce you. Remember, all you’re trying to do is explore whether the two of you could make sweet, sweet impact together.

You can do the Tinder transactional approach where you swipe right on any funder who even vaguely matches your interests – but you probably want to think of this more like Meetup, where you’re looking for a group of friends who share your interests so you can all do things you enjoy together again and again.

Securing and Maintaining a Funding Relationship

• What is a typical funding cycle? When should nonprofits start engaging funders regarding developing the opportunity to apply for a grant or funding opportunity?

As soon as possible! Cycles vary from on-the-spot yes from a family foundation decider, to a full year from invitation to submit LOI to money in hand. Institutional funding is almost never a quick fix.

I track what the timing turns out to be, so I can repeat it or improve on it next time with that funder. So if I started talking with them in January and it turned out their LOI deadline was Jan 31 for consideration in March for a proposal deadline in April for a decision by their board in June for a grant starting on July 1st – then I’m going to make a note to go back to them in November saying “Hey, I’m looking ahead to the new year, can I be planning on sending you my renewal LOI in January so we can stay on the same schedule for your June docket?”

Unfortunately you’ll often hear that you can’t reapply until you’ve submitted your final report, which would mean in this case that I need to wait til July 1st to submit my report and only then can I get back into the LOI process so I can’t possibly get renewed until their December docket with a start date of January 1st, so there’s a built in 6 month lag and I just can’t do anything about that except plan my budget around it.

• What is the secret to submitting a successful proposal?

I wish there was one! Everything I already said about building relationship, understanding how you fit with them, fundraising from the heart.

The secret to an UNsuccessful proposal is not to pay attention to their guidelines, not to follow their directions about what materials to submit, or to blast out boilerplate applications that clearly aren’t tailored to what they’re asking. Basically not to listen, not to be a partner.

• Ultimately, most organizations would like to build long-term relationships with donors. What are important considerations in building a multi-year funding relationship?

I love this question because it’s like focusing on the marriage instead of the wedding. The proposal is, well, the proposal! The first grant is the wedding. But after that comes the marriage – or so we hope, right? It’s a relationship, a partnership. It takes trust and working together. Even though there is a power dynamic because of the money, the more you come into this with partnership in your heart, the more partnership you’ll get in return.

Some funders will actually do 2 or 3 year grants – usually you’ll see in their guidelines if they’ll consider it, usually they’re likelier to do that after you’ve built some trust with them. If your relationship development is going well and they seem positive about the work you’re discussing with them and the work is clearly more than a done-in-a-year initiative, it’s totally fair to ask if they’d consider a multi-year grant.

• Most nonprofits are asked to track outputs and outcomes as a requirement of the grant, but it’s most successful when it can be conveyed effectively. What are some effective examples or approaches nonprofits have used to best convey or “tell the story” of the funding relationship and the impact it had? Why is this important to funders and foundations?

They ask for the numbers. And the numbers are important. But neuroscience research tells us that in a way, the numbers are just an excuse for our rational brains to go along with our hearts. There’s a saying, which is confirmed by research, that “people buy on emotion then justify with logic.” There’s another saying, which is a quote from Maya Angelou: “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

So telling a story is incredibly important. And I do mean one story, one person’s story. Research shows that at least as far as individual giving is concerned, showing you can help these 2 kids makes people give LESS than showing they can help this 1 kid. I would strongly recommend reading Made to Stick by Chip and Dan Heath. It’s about sales and marketing – and that’s what fundraising is, it’s selling a really great product that you love, to other people who fall in love with it.

The job training center where I worked for 10 years – when I got there, they were already doing this thing where their end of year fundraising campaign included a copy of a handwritten letter from a client sharing how the program changed their life. We did that every year I was there and it was a million-dollar campaign every year, and they’re still doing it now a decade later so it must still be working. Along with an appeal letter that gave some basic stats on the organization’s outputs and outcomes. You need both.

Future of Financial Capability in LA

• As financial capability has evolved through the years, what are some of the trends or priority areas that you see happening in LA or across the country that is innovative and impactful?

First, I’d say intersectionality and equity. Funders are really starting to understand that if I want better educational outcomes for a child in South LA, I can’t just fund an after school program and expect that to move the needle significantly, I need to understand what other issues are intersecting in that child’s life. Including whether that family is surviving financially. I still may not be able to decide to start funding financial capability – but I may start moving in that direction, and talking with other funders to understand if anyone’s doing that and how could I learn from that or collaborate with that.

And one of the intersections that funders are waking up to, is race and equity. 87% of SCG members just said in a survey that Diversity, Equity & Inclusion is their top priority for us to help them with over the next 3 years. Across the country, there’s a wave of philanthropy acknowledging that systemic inequities, including systemic racism, are what keep churning out the problems that philanthropy is trying to solve.

So I think when we talk about financial capability, there’s a new possibility of talking about why communities of color suffer so much from predatory financial practices and how our work addresses those inequities whether we’re working on the ground or more systemically.

• Financial capability programs have long been conducted in LA, but recently we are seeing a more coordinated effort, like the Center for Financial Empowerment with the County of LA. Where do you see the opportunities for organizations to leverage this coordinated effort, and as funders or representing foundations how do you view the benefits of this scaled approach?

Here’s another quote: Ralph Waldo Emerson said “The only way to have a friend is to be one.” Your organization may be able to connect up with a collaborative and get stronger together, including getting connections to new funding IF you’re really partnering, not just showing up with your hand out. And believe me I’ve done that. I wish I’d been a better for-real partner, really listening, really sharing what I could, really believing that if I help my clients or my funders get what they need from a partner instead of trying to lock in all the credit for my org, it’ll ultimately be better for my org.

Closing

• In closing, what is one recommendation you would leave for folks here today as they pursue funding for their financial capability programs?

We’ve mostly talked about institutional funding today. But if you’re a nonprofit, you really need individual donors too. They’re quicker to decide. They mostly give unrestricted dollars, unlike a project grant where you have to track how much you’re spending on pencils for kids between the ages of 3 to 5 living in certain zip codes. And they don’t change their funding priorities every few years.

And financial capability is a GREAT story to tell to individuals. Everybody understands how hard it is to manage money.

The thing is, I think a lot of the emphasis on institutional giving – asking for grants – is because it’s less scary to write a proposal and press submit on an online application, than it is to have the words “I’m asking you to give X amount to my organization” come out of your mouth.

But there is *nothing wrong* with asking. You’re just asking because you love your organization and you think, based on the exploration you’ve done with them so far, that maybe they love it too. So you ask, and you wait, and you let there be silence, and then they say something and you go from there.

People who love what you love, are the nicest people. So I think you should go out there and tell them about your amazing financial capability work and have a wonderful time building your relationships!