Why Grassroots Fundraising?

Dear Kim:

You are well known as an advocate of individual donor fundraising, and many people admire you. However, you have your detractors, one of whom describes you as “the Queen of spending a lot of time to little result.” Others claim that you are simply not realistic and that real money is in foundation grants especially when you compare writing a proposal that yields $50,000 to the amount of time it would take to get that from individuals, unless you know a few really big donors. It does seem like the work of grassroots fundraising is out of proportion to the money raised. Can you comment? (And, please know that most people I talk to really love you and admire you.)

~Wanting to be a fan

Dear Potential Fan:

Thank you for your honesty. I am sure I have many detractors for any number of reasons, and am even more sure that the vast majority of people have never heard of me! Your question is quite legitimate and the struggle to create a fundraising program that brings in enough money is ongoing. In some cases, my critics are correct. If you are successful getting foundation grants, and are working on an issue that foundations are interested in funding, it is possible, at least in the short term, to raise almost all the money you need from foundations. Building an individual donor base takes time, and it may be several years before you see a payoff in terms of raising a significant portion of your budget from individual donors. Foundations, even with what is often a “three years and you’re out” rule give more money for less work, if you know how to work with them. Government grants, which still do exist to some extent, often provide more money than even a well-established donor base. The pitfalls of dependence on foundation and government funding are well known and I will not review them here.

Instead, I want to clarify why any organization would want to build an individual donor base as one of its fundraising strategies. My first point, one you’ve probably heard before, is that there is a lot more money out there to be raised from individuals than from foundations. (In fact, 76% of all private sector giving comes from individuals vs. 12% from foundations.) Another basic question you need to ask yourself when picking any fundraising strategy is, “Who do we want to be answerable to?” Your source of money has a lot of control over the direction of your group. For maximum independence, an organization ought to make sure that no one person or source has very much power. Raising significant money from a broad base of donors is the only sure way to keep control of program direction in the organization and not with funders.

Further, if community involvement is important to your organization, fundraising is a key way to make that happen. One of the easiest ways to get people interested in what you are doing, and to pay attention to your work is to ask them for money. Here’s an analogy: a friend or colleague tells you that she has invested in a deal that she thinks will more than double her money. You think the deal sounds interesting, but a little dubious. Perhaps you share some of your concerns, but your friend is clearly enthusiastic and so you drop it, thinking it is not your business, and it isn’t actually that interesting. You hope it turns out well, but you give it little thought past that. A short time later, your friend asks if you want to invest. Now, you ask all the questions you originally had, and you keep asking until you are satisfied with the answers. It is now your business, and you get to find out what you need to know.

The same is true with fundraising. In a community, people may have heard of your organization, but because they are not asked to be part of it, they don’t feel they can ask that much about it, particularly to raise objections or questions critical of the work. They have many other things on their mind, and your organization becomes one of the many things they do not think about. However, if you invite people to make a gift, they will ask questions or raise objections and they will feel they have a right to do that and to get answers. Then when you need a broad base of individuals to write letters, to show up at a town-planning meeting or to come to a demonstration, you have a base to draw on. People feel invested in your work, because they have made a contribution.

The mechanics of this vary person to person. Some people will literally be asked for money in person or on the phone, and will ask you their questions right then. Others will give, then get their questions answered or their doubts resolved by reading your newsletter.

Another reason to raise money from individuals is that you can use it for general operating costs. If you raise $50,000 from a foundation, it will be less work than getting several hundred people to give you $25, $50, $100 or whatever. However, the money from individuals can be used for whatever is needed, whereas the $50,000 has to be used as the grant specifies, and more and more, funders do not want to help with general operating costs.

Finally, although it takes a fair amount of work to get 300, 400, 500 or more people to begin giving, it takes a simple, formulaic maintenance program to keep them giving. With a little more attention, you will be able to identify the 30-50 people who would be willing to give you $1,000, $5,000 or more. If you keep at it, someday you will put in one hour of work having a conversation and a cup of coffee with someone and that person will give you $50,000. Donor programs pay off over time. They take two or three years to establish. They are always a lot of work, but the idea is that the same amount of work yields more money every year.

Individual donor programs are for organizations that want to be around for the long term, who wish to be owned by the communities they serve. They are for organizations that desire to organize and educate their constituency. They are for organizations that want to build power and make a difference.

Good luck!

~Kim Klein