3 Steps to Become Less Reliant on Government Funding

3 Steps to Become Less Reliant on Government Funding Main Photo

12 Jun 2018


Arts and Culture

Moving Your Nonprofit Away From Government Funding

Many nonprofit organizations have been solely dependent on government funding for so long that the idea of pursuing private sector funding can be a bit intimidating. Where do you even begin?

I recently had the opportunity to talk about effective fundraising processes at the National Coalition for Homeless Veteran's Annual Conference in Washington D.C., and this was a common question. During my conversations with attendees, I noticed a few distinct trends that are holding these organizations back from realizing their full funding potential.

Nonprofit Funding Setbacks

  • Stuck in the ‘Three G’s' - Galas, Giveaways, and Golf. While special events can be a highly effective tool for marketing and raising awareness for your organization, they simply are not the most effective tool for fundraising. (It's a topic we've discussed before here and here.)
  • Government Facing - Since veterans were government employees, many organizations feel that their funding should come from the government.
  • No Coordinated Funding Efforts - Many well-meaning board members 'ask for money all the time,' but without a focused and coordinated effort supported by the entire board, these funding asks will never reach their full potential.

Any of this sound familiar? These are challenges faced by a wide variety of organizations dependent on government funding, not just those serving our military and veterans.

Reducing Reliance on Government Funding

So, what steps do you need to take on the path to becoming less reliant on government funding? It's easier than you may think.

  1. You need acknowledgment and agreement at the board level that diversified funding sources are needed. (Don't just take our word for it. You can read additional articles about the importance of having diversified funding sources here.)
  2. Take a hard look at your Credibility, Outcomes, and Fundraising Skills (the key ingredients of Asking RightsTM). You'll need to begin strengthening any weak areas before you're ready to approach private investors for funding.
  3. Have confidence in your cause! This may seem like an obvious step but many government-facing organizations don't believe that they'll receive the same level of private sector support as other social service organizations do.

Nonprofit Fundraising Help

Making the leap to new, diversified funding sources can be scary, but in the end, you will have a larger, more stable constituency of investors that will continue to invest in your outcomes. If you need help in your new fundraising efforts or guidance on the right steps for your organization, the experts at Convergent Nonprofit Solutions are here for you! Contact our nonprofit specialists to get started today!

About The Author

Tom Ralser, CFA's Profile Photo

Tom Ralser, CFA

Principal & Director of Asking Rights

Department: Team

“Why should I give your organization money?”

When I began in this business in 1995, this is the question I was first asked to answer. Not only was this asked in my first feasibility study by a prospective donor, but from a company perspective, it became the driving question that would allow us to become leaders in the industry.

Since then, I have strived to not only address this question but improve and refine the answer. In the early days of economic development projects, it was relatively easy to answer. Since then, I have applied my approach to answering this question to virtually every type of nonprofit. The narrower term “ROI” has given way to the broader “OVP” (Organizational Value Proposition®) which is more appropriate for social missions and my focus on outcomes delivered has led to a revolution in addressing the motivations of givers, transforming them from nominal donors to major investors.

My work is not yet done. As investors in nonprofits become more sophisticated and demanding, the bar is continually being raised. Stay tuned.

Tom has worked with organizations of all kinds, from Chambers of Commerce to religious organizations, national museums to rural health networks, and local youth organizations to international research institutes. He pioneered the concept of applying return on investment (ROI) principles to nonprofit fundraising, and fundraisers have described his work as the “silver bullet” that justifies larger investments in nonprofit organizations.

Hundreds of organizations have utilized Tom’s sustainability planning techniques to ensure they can thrive in a tight money environment. He holds the Chartered Financial Analyst (CFA) designation, which provides the framework for his Investment-Driven Model™  of fundraising, and led to the development of the Organizational Value Proposition®, which is widely used by corporations, foundations, and individuals as confirmation that the nonprofits in which they invest are truly delivering outcomes with values. His specialty of utilizing for-profit concepts and methods in the nonprofit world has helped nonprofits raise over an estimated $1.6 billion in the 22 years he has worked with them.

Tom is a frequent and highly acclaimed speaker, addressing topics about attracting new funders, outcome-based sustainability planning, and delivering value to investors.

Summary of Experience

  • Personally involved in over 600 nonprofit funding projects in all 50 states.
  • Author of the books ROI for Nonprofits: The New Key to Sustainability, Asking Rights: Why Some Nonprofits Get Funded (and some don’t), and the companion workbook, Developing Your Asking Rights.
  • Holds the Chartered Financial Analyst (CFA) designation, ranged by Economist as the “gold standard” for investment analysis.
  • Session leader and/or keynote speaker at dozens of conferences throughout the nonprofit sector and country. A sampling includes:
    • Planet Philanthropy (2016) Keynote Speaker.
    • National School Foundation Association Annual Conference (2016, 2017) Presenter.
    • Association of Healthcare Philanthropy Big Ideas Conference (2017) Presenter.
    • Council for Advancement & Support of Education’s Conference for Community College Advancement (2017) Presenter.
  • Founding Director of Western Colorado Bureau of Economic and Business Research at Colorado Mesa University, where he was a tenured professor.
  • MS in Finance from the University of Utah and BS in Marketing from Illinois State University.

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