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Fundraising Toolkit Module 2: Tools for Identifying Potential Donors

Fundraising Masterclass

Wednesday, 22 January 2025, 4:00 pm CET | 10:00 am EDT | 8:30 pm IST

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Housekeeping

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❓ Show your name & organisation - click on your video, then "rename"

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💚 Enjoy!

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Share in the chat:

🙋 Who you are (Name, Organisation, Role)

🌍 Where you are logging in from around the world?

🧑‍💻 What would you like to know about fundraising?

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About the Fundraising Toolkit:

The Fundraising Toolkit is a comprehensive resource designed to empower social innovators and organizations with the skills and strategies needed to secure funding effectively. It provides practical tools, templates, and guidance tailored to diverse fundraising needs, from crafting compelling pitches to building sustainable donor relationships. Developed by Catalyst Now with the invaluable support and feedback of Blackfox Global, For Impact, and BackaBuddy, the toolkit incorporates actionable insights and best practices to enhance the capacity of changemakers. By fostering resilience and sustainability in their work, it aims to drive impactful social initiatives worldwide. Building on the foundational knowledge from Module 1 of the Catalyst Now Fundraising Toolkit, Module 2 dives into the tools and strategies needed to identify and engage potential donors. This session will provide participants with practical insights into donor research, helping them understand what funders are looking for.

Chat: Watch the first session of the series “Basics & Strategies” here.

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Your Guides Today

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Strategic Guide to Funder Research

Know your WHY

2. Identity Deeply Aligned Funders

3. Plan your Outreach

4. Create Compelling Communications

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Organizational Assessment

Keep your research organised. Before identifying your research priorities, you should first assess your organizational budget and status.

Organizational Budget:

Minimum/Maximum Annual Budgets

Organizational Status:

501c3 status
Equivalency status in your local country

Use of a fiscal sponsor
Support for the registration process

Our presentation will focus on how to identify deeply aligned funders including the steps you need to take prior to conducting the research and the research process itself.

One of the first steps you need to take prior to conducting your research is to assess your organization's financial standing and legal status. This is why…

1. Organizational Budget:

Funding Restrictions: Many funders have specific budget requirements:

Minimum Budget: Some foundations may only support organizations with a certain level of operating income, indicating a degree of stability and sustainability.
Maximum Budget: Some grant programs may be designed specifically for smaller organizations with limited budgets, excluding larger institutions.

2. Organizational Status:

Legal Structure:

501(c)(3) Status: Essential for receiving tax-deductible donations in the US. This significantly impacts your ability to attract grant funding from US-registered organizations - some only fund organizations with 501(c)(3) status, however many fund those who have equivalency status to this if they do not have this specific status.
Equivalency Status: If operating internationally, this may be necessary to ensure tax-deductibility in certain countries.However, organizations in the Majority World often face significant challenges in accessing funding due to their registration status. This is because many funding opportunities are only available to registered organizations and not informal CBO’s or other structures for example, and the process of registration can be complex, time-consuming, and expensive. In contrast, organizations in the Global North often have an easier time accessing funding because they are more likely to be registered and have the resources to navigate the funding process. This disparity in access to funding can make it difficult for organizations in the Majority World to carry out their work and achieve their goals. Therefore it is important to explore funding that can be accessible based on your organizational status and the resources you have available. There are options that can be explored for example, you can explore the use of a fiscal sponsor as an intermediary of the funds (this could also be a partner who can channel the funds on your behalf). Some donors also provide strategic and funding support to organisations in the Majority World to support them with the organizational registration process.

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Identifying your Research Priorities

The next step is to identify your research priorities:

Geographic Focus - Local, Regional, National, International
Funding Priorities & Needs - Different types of funding
Preferred Grant Characteristics - Funder Types, Grant Types, Minimum Grant Size
Donor Exclusions - Current Donors, Lapsed Donors, Potential Conflict of Interest
Restrictions to Types of Funders/Industries - Your ethical no-go’s/Due Diligence Considerations

Once you've completed your organizational assessment, it's time to refine your focus with a well-defined set of research priorities. This will streamline your efforts and ensure your resources are used effectively. Here are key areas to consider:

1. Geographic Focus

Local: Concentrate on donors and funders within your immediate community.
Regional: Target donors and funders within a specific region or state.
National: Seek funding from sources across the country.
International: Explore funding opportunities from global foundations and donors.

2. Funding Priorities & Needs

Program Funding: Support for specific projects or initiatives.
General Operating Support: Funding for core organizational functions e.g. staff, office costs.
Multi-Year Funding: Long-term commitments that provide stability and predictability.
In-Kind Contributions: Donations of goods or services.
Seed Funding: Early-stage support for new programs or initiatives or organization start up costs.

3. Preferred Grant Characteristics

Funder Types:

Foundations: Private, family, or corporate foundations.
Government Donors: Bilateral or Multilateral Agencies e.g. USAID or UN Agencies
Corporate Foundations: Philanthropic arms of corporations.

Grant Types:

General Operating Support
Program-Specific
Capacity Building
Matching Grants e.g. some donors require co-funding

Minimum Grant Size: Set a minimum grant amount that aligns with your organizational needs.

4. Donor Exclusions

Current Donors: Avoid redundant research on current donors.
Lapsed Donors: Focus on re-engaging lapsed donors rather than researching new ones.
Potential Conflicts of Interest: Exclude donors whose interests may conflict with your organization's mission or values.

5. Restrictions to Types of Funders/Industries

Ethical Considerations: Avoid seeking funding from industries that may have a negative social or environmental impact (e.g., tobacco, fossil fuels).
Due Diligence: Research funders' past activities and ensure they align with your organization's values and mission.

By carefully considering these priorities, you can create a focused and efficient prospect research strategy that maximizes your chances of securing the funding you need to achieve your organizational goals.

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Identifying your Primary and Secondary Issue Areas

Questions to consider:

What are your primary thematic priority areas?
What other areas does your work impact (indirectly) but also achieves impact (secondary issue areas)?
Who are your target groups (direct and indirectly)?
What are the age ranges and demographics of your target groups?

For example: an organization focused on providing water, sanitation and hygiene (WASH) facilities in rural African clommunities, may also have broader impacts. Their interventions can increase school attendance particularly for girls who no longer need to miss school to fetch water from long distances, health outcomes in the community may improve due to a reduction in waterborne diseases, and access to water can booster incomes by supporting livelihood development etc. In this primary focus area is WASH, its work also touches secondary focus areas such as education, health, livelihood development). Idenitifying both primary and secondary focus areas, allows the organization to highlight its broader impact and appeals to a more diverse range of funders.

A key step you need to undertake when identifying your research priorities is to identify your primary and secondary issue areas, as part of this you may wish to consider the following questions:

What are your primary thematic priority areas?
What other areas does your work touch on (indirectly) but also achieves impact (secondary issue areas)?
Who are your target groups (direct and indirectly)?
What are the age/demographics of your target groups?

This in itself can help you narrow down your research scope while also expanding your potential pool of funders.

For example, there is an organization who may work specifically in providing water, sanitation and hygiene (WASH) facilities in rural communities in Africa, however through their interventions they help increase school attendance particularly for girls who do not have to miss school to fetch water from long distances, health outcomes also improve in the communities due to the decrease in waterborne diseases, incomes amongst community members can increase as access to water can also support livelihood development etc. Within this the primary focus areas (WASH) but also secondary focus areas (Education, Health, Livelihood Development) - where impact has been achieved have also been identified.

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Breakout Room Discussion

Identify your organization’s primary and secondary issue areas

Recap: Questions to consider

What are your primary thematic priority areas?
What other areas does your work touch on (indirectly) but also achieves impact (secondary issue areas)?
Who are your target groups (direct and indirectly)?
What are the age/demographics of your target groups?

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Share your thoughts!

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Breakout Room Discussion

The Research: Where to Start

Sector Trends and Insights

Inside Philanthropy
Alliance Magazine
Black Fox Brief
Devex
Stanford Social Innovation Review (SSIR)�

Peer Organizations Funders�
Convenings & Webinars�
Open grants and donor databases

Now that you know your priorities… how do you start your research?��Some ideas of where to start researching include:

Sector Trends and Insights

Learn the language of the sector
Insights into players, dynamics and trends
Donor profiles
Nonprofits highlights

Peer Org Funders

Look into primary but also secondary thematic areas to find different angles
Where to find info:

Organization's website

Main page (look for logos)
Partnerships page
Financials/Transparency
Annual reports
Blog posts

Convenings & Webinars

Of course, in person and online events, and even if you can't make it, looking at attendees or speakers lists would be interesting to find alignment

I also wanted to include here open grants and donor databases. Unfortunately, most of them are paid, but we've listed out in a following slide some free and paid tools for your awareness. This is one possibility to uncover funders, but not the only one. Open grants can be helpful, especially for newer organizations, but our hope with this webinar is showcasing how deep alignment in research is key to a successful fundraising strategy

Ok, now let's imagine that you have found a couple of potential names from this process. How do you know if they are really aligned?

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Breakout Room Discussion

The Research: Funder Fit

To assess alignment we suggest looking into:

General overview, mission and programs
Geographic priorities
Type of organization and eligibility (organization size, registration status, leadership, etc.)
Giving capacity
Values alignment

At Black Fox Global, we use donor templates that can help you understand what you need to know from this funder

to capture:

General Overview: Who is the funder? What are their priorities, geographic focus, and interest areas?�
Application process: invitation-only or accepts proposals. If yes, any deadlines, process details. What is the reporting like?�
Financial Background: What is their typical grant size, and how much are they able to give?

Contact info: HQ location, email, telephone��
Key Contacts: Who are the decision-makers or people you need to connect with?�
Why a Fit: Clearly articulate why this funder aligns with your mission and objectives. This section ensures that everyone on the team understands the strategic importance of the relationship and helps craft compelling outreach.�

What are the strongest points of connection?
Can you mobilize the funder’s language to express that alignment?
What evidence can you point to to back up this connection? News items, past grants, funder specific program goals?
Can you highlight your points of entry?

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Breakout Room Discussion

The Research: Finding information

Check the Funder website:
About Us
Programs
FAQ
How to apply

Follow the money:
Annual reports
US 990s
Funder website grants database

Look for additional insights:
Founders and staff biographies
Social media pages
News and media mentions
Peer organizations annual reports

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The Research: Finding information (990)

990 is a US Internal Revenue Service (IRS) form that provides the public with information about nonprofits

Learn how to read a 990, Candid article

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Breakout Room Discussion

The Research: Building a Donor Profile

Mission:

Areas of Interest:

Things We Do Not Fund:

Geographic Focus:

Average Grant Range:

Total Assets (Most Recent):

Annual Giving:

Application Process:

Due Dates:

Reporting Requirements:

Website:

HQ Location:

Telephone:

Email:

Key Contact(s):

News/Articles/Insights:

Recent, Relevant Grants:

Why a Fit:

See an example of a donor profile, here.

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The Research: Breaking Down of a 990

Total Revenue

Part I

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The Research: Breaking Down of a 990

Part XIII - Supplementary Information > Information Regarding Foundation Managers

Information on whether they accept no

unsolicited proposals

Information on their application process

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The Research: Breaking Down of a 990

Part XIII - Supplementary Information > Grants and Contributions Paid During the Year or Approved for Future Payment

Name and address

of grantee

Grant amount

Tip: learn more about how to read a 990 on this Candid article

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Tools for Identifying Potential Donors

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Here are some tips from donors themselves:

Identify the ecosystem – Identify the ecosystem around you, who has funded other organisations you have been involved with? Connect by introduction email, meet at events and conferences.
Referrals – Grantees can also refer your organisation to their funders (ask them to introduce you).
Understand the value of a relationship – Establishing long-term relationships with donors will make donors view your organisation as an institute rather than on project-based grounds.
Share the wins – Share the wins and exciting developments on the horizon for the organisation, creating a deeper connection with donors.

Tips From Donors

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Key Takeaways

Before identifying your research priorities, you should first assess your organizational budget and status as this could affect your ability to receive specific funding or work with particular donors.
Once you have conducted your organizational assessment, you need to identify your research priorities to help you narrow down your research and keep it focused.
A key aspect of identifying your research priorities is to identify your primary and secondary issue areas, this can help expand your research pool for prospective donors.
Consider starting your research by looking at peers organizations funders.
Keeping up with sector trends and insights will be key to help you in your prospect research.
Creating and updating donor profiles allows you to organize information, quickly see the alignment, and prevents the loss of important information over time.

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We want to hear your opinion!

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We want to hear your opinion!

Upcoming Fundraising Masterclass Series

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World Economic Forum - Social Innovation House

We are in Davos, hosting groundbreaking sessions at the Social Innovation House.

Join virtually on YouTube.

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Find out more

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