For many nonprofit organizations, institutional fundraising (foundations, corporate foundations, corporations, or national or international public funds) is an important part of resource mobilization activities. While the process of applying for funds from this target audience may be obvious and sometimes even publicly shared by the funder, it is possible to greatly improve your approach by being rigorous and strategic. This article gives you the key tips and best practices to consider at a glance at each stage of the funding cycle!
1- Identification of potential institutional donors
You start by researching all the potential donors and gathering this information so that you can qualify it later. During this step:
- Make sure you have a database to collect the relevant information. A database doesn’t necessarily mean a complex technological solution, it can also be as simple as a well thought out Excel spreadsheet to collect and sort a lot of data.
- Be clear about the type of institutional donors you want to target. In order to avoid wasting time, you should choose the targets that are best suited to your organization, its activities and its DNA.
- Have multiple and diverse sources where you can find new prospects. A lot of information is available for free on the Internet. Before using any paid solution, make sure you have scoured business registries, foundation lists, project call websites and also benchmarked organizations active in the same sector as you.
- Always have enough prospects in your pipeline. If you want results, you will have to approach several institutional funders, perhaps many!
- Allocate enough time to researching your prospects, it takes time! Also think about the resources you may have. This type of research is easily done by students or volunteers.
2- Qualification of your prospects
Once you have your list, you will have to sort and select, among all the prospects identified, those who are most likely to support your organization and your activities according to matching criteria:
- Look for the right information: mission; area of focus; types of organizations or projects they support; submission deadlines and application process; specific criteria related to the project (excluded costs, co-funding, etc.); funding capacity; etc.
- Refine your list of prospects to prioritize those that best fit your mission. At this point, it may be useful to begin contacting some of them to clarify any unclear points.
- Allocate prospects to the most appropriate projects.
- Have a timeline and a goal: how many prospects do you want to qualify and solicit per month? Get organized and divide up the prospects to qualify as much as possible.
- Make sure you have enough prospects to increase your chances of funding your projects 100%: mix “cold” contacts and contacts via direct introductions if possible. In institutional fundraising, the conversion rate is rarely above 10%.
3- Cultivation of the prospects you have contact with
If you have the opportunity to interact with some of them or the chance to be directly introduced, take the time to build a trusting relationship with the qualified prospects you want to ask for funding and interact with them to pique their interest by informing them of your mission and impact. During this stage:
- Whenever possible, try to make personal contact. Don’t be afraid to call or send an introductory email, but also use social networks like LinkedIn to connect with team members.
- Engage your network, board of directors and staff members to open doors. A direct introduction will always carry more weight than a cold call.
- Make sure you have a compelling pitch. Whether it’s oral with a pitch or written with a letter or email, make sure to be direct, compelling and attention-grabbing, while personalizing some of the content to show your alignment with the prospect you’re contacting.
- Keep in mind the relational approach and move away from a transactional vision!
- Use this opportunity to understand the funders’ goals and build trust and credibility. Perhaps other synergies besides financial support can be explored, such as an invitation to an event, the organization of a webinar, the exchange of key information on a theme or region, etc.
4- Solicitation of funds
Finally comes the moment when you can ask for money. Be serious and professional when writing or formulating your application:
- Make sure you strictly follow the funder’s requirements for the application: stick to the requested number of pages or words, answer the questions accurately, don’t forget any of the required documents, and meet the submission deadlines.
- Have all your required documents ready and updated in one file to save time: by-laws, annual reports, financial reports, list of Board members, etc. This will save you from having to search for them in different files for each application.
- If possible, be creative in writing your project proposal: stand out by using a graphic design, photographs or diagrams, key figures.
- Be sure to ask for an amount that is appropriate to the funder’s capacity. Don’t hesitate to ask if you can’t get this information during your research.
- Ask for an acknowledgement of receipt when sending by email or save your request when sending on a platform. This will be useful for the follow-up of your request, but also for other requests where similar questions might be asked.
5- Stewardship of your institutional funders
You have obtained a grant and you can congratulate yourself! But the work doesn’t stop there, quite the contrary. You must maintain a relationship of trust with your funders through strategic actions to thank, recognize and inform them in order to renew their support:
- Be sure to thank and recognize your funding partners in a timely and appropriate manner. It is always much easier to keep donors close than to acquire new ones! Also, some donors tend to increase the amount of their support on a new application if they are happy with the results and the relationship.
- Be sure to complete all aspects of the funding agreement. Take the time to read this document thoroughly and keep in mind the reporting requirements.
- Have a donor tracking tool with deadlines, including interim and final reports. Don’t wait for the donor to request it! If there is a delay, inform them.
- Be transparent with your donors, even when you face challenges. Most are open to discussion and understand the constraints of implementation very well
- Have a retention plan. This is necessary for all your donor types. However, institutional donors often have fewer expectations and requirements. Don’t overdo it either.
You now have everything you need to run a successful institutional fundraising campaign! Good luck!
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