Where the Money Is

Dear Kim,

I work for a large community action agency. Our management team wants to get more support for their departments and programs — food, affordable housing, youth services, etc. They think the way to do this is to get grants. I would like to combine this with individual donor support because all I read from statistics is that 87-89% of charitable contributions in the United States come from individuals. Unless I am missing something, this indicates to me that we should be putting at least 60% or more of our efforts into soliciting the local community. Am I wrong?

Please advise!
—Jesse James Wannabe

Dear Mr. Wannabe,

As your namesake said when asked why he robbed banks, “Because that’s where the money is.” So, your instinct that you should spend way more time raising money in your community is correct. What many groups do is figure out what their core costs are: in other words, how much would it cost to keep your agency open and providing basic services to people, and then raise all that money from individuals. Special projects or start up programs are funded by foundation or government grants. Anything you do that you are going to have to do year after year with little change becomes gradually more funded by individuals and less by foundations or government. This way, if you lose some funding, it doesn’t affect your ability to stay open.

There are three main reasons why people often prefer to focus on foundations despite the fact that way more money is available from individuals. 1) Proposal writing is staff driven, whereas individual donor fundraising is volunteer driven. If an organization doesn’t have many volunteers and doesn’t want to be bothered with them, they will stay foundation driven; 2) raising money from individual is a long term process and does not pay off in big dollars right away; and 3) The organization does not want to find out whether the community really values their work. Many “community:” organizations would die on the vine if they went to the community who couldn’t care less about them or don’t understand what they do.

My suggestion to you is to get permission from management to form a team of 3-5 volunteers and begin some individual donor fundraising. After a year or so, come back to the team with your results, which, if you work steadily, will be impressive, and then re-open the conversation about funding directions. Good luck!
—Kim