16 Apr Fundraising FAQs From California Economic Developers
By Mark Bergethon
The California Association for Local Economic Development (CALED) holds an annual training conference, which I enjoy attending each year. This year’s conference, “Taking Care of Business,” which took place in Sacramento last week and focused on next practices and best practices for economic development, was especially exciting as Convergent was a conference sponsor for the first time! There was a great energy in the air as attendees learned as much as they could about how to improve their communities, and I spoke with several people in depth about their organization’s funding needs. These discussions usually focused on the great potential I believe there is to raise private sector funding for economic development in communities throughout California.
While discussing fundraising for economic development at the conference, I noticed that there were a few questions that came up frequently, and in case we weren’t able to speak in Sacramento, I wanted to share the answers to those questions with you here.
Question #1: How big does the community have to be in order to do a campaign?
Convergent has managed public/private partnership fundraising campaigns for economic development organizations in several communities with populations under 10,000. That doesn’t mean that every community that small can realistically raise enough money to make a full-scale outsourced capital campaign worthwhile, but many can. The first step you need to take before proceeding with a campaign is to conduct a feasibility study. That process can answer in advance whether a successful campaign can be launched, what a realistic funding goal would be, and how to position your campaign for maximum success.
In just the past few years, Convergent has managed campaigns of $1.3 million, $1.65 million, and $1 million in Holdrege, NE, Vermillion, SD, and Clear Lake IA respectively—all communities of approximately 10,000 people or less. Those are five-year numbers, meaning that a $1 million campaign is $200,000 per year over a five-year program/pledge period.
Question #2: We’ve always been publicly funded. How do you know whether the businesses in our community would give us any money?
By far the strongest model for community-based economic development across the country is the public-private partnership, with the bulk of funding and organizational leadership actually coming from the private sector. The model isn’t as strong in California because of historic reliance on public sector funding in the state, but that public funding has been strained in recent years, to say the least. It makes sense for the private sector to step up and carry a big part of the load.
The key is in presenting the opportunity as a good business investment. We don’t consider fundraising campaigns to be charitable contribution campaigns or membership drives. We position our client’s program(s) as a good investment, demonstrating the value proposition and ROI. For instance, you can show a banker how the success of your EDC’s five-year program of work can translate into increased bank deposits or educate a car dealer about how many more cars can be sold if long-term job creation goals are met. Local businesses are true stakeholders and beneficiaries of local economic growth. There is no more effective way to invest in local economic growth than supporting the local EDC.
But the real answer to the question, “How do we know if businesses in our community will step up to support us and/or a particular program of work we want to implement?” is to conduct a feasibility study. That’s the due diligence that will identify the parameters of what can or can’t be accomplished and how best to do what can be accomplished. If the businesses in your community simply won’t support your organization for whatever reason, we’ll figure that out before embarking on a major campaign. More importantly, we’ll learn why businesses are reluctant to provide support and we will help you determine what can be done to cultivate and obtain their support over time.
Question #3: Do you only work for economic development organizations or can you raise money for other projects and nonprofits?
A surprising number of people at the conference asked me about funding non-economic development projects or organizations. While over half of our clients are EDCs or chambers of commerce and we work on more economic development funding initiatives than any other firm in the country, we also do work for a broad variety of other nonprofits and community projects in need of funding. Here is a sampling of some of the types of nonprofits we’ve raised money for: community centers, museums, historic theaters, Humane Society, YMCAs, hospices, hospitals, schools, community colleges, senior centers, homelessness shelters, domestic violence safe houses, Boys & Girls Clubs, etc. The diversity of our clientele has ranged from a puppetry arts group to a monastery. So truly, if there is a nonprofit or project in your community in need of funding, we can help!
Thanks and I look forward to next year’s conference!