Decreasing Dependency on Events for Funding: An Economic Development Case Study
How does an Economic Development Organization (EDO) that has depended primarily on an annual fundraising event for years make the leap to launching a multi-year capital campaign? How do they secure buy-in and support from the regional business community? See how Convergent helped one EDO do just that…
Grant County has an aerospace history dating back to the late 1930’s early 1940’s and boasts two large airfields that enjoy over 340 days of visual flight rules weather. Thanks to funding secured during their capital campaign, the GCEDC staff is now able to focus more time and attention on developing economic initiatives supporting and expanding local aerospace industry.
For many nonprofit organizations, a good portion of operating revenue is often derived from a marquee annual event. The Grant County (WA) Economic Development Council was no different, depending on an annual golf tournament and gala to help meet the organization’s annual budget. While this event had traditionally been successful, there had been a steady downward trend in participation and investment. This led leadership of the Grant County Economic Development Council to begin questioning the future sustainability of one annual fundraiser… one which required a significant amount of staff time to execute successfully.
Furthermore, the organization’s leadership felt strongly that significant opportunity existed for the region. With access to an international airport, a foreign trade zone, low electric rates, inexpensive land, a high speed fiber optic network, and a highly trained workforce, Grant County was poised for further growth and success.
With these factors in mind, the executive staff and board of the Grant County EDC decided that a more comprehensive—and forward looking—approach was called for. As part of that, the decision to partner with Convergent was made.
Total goal of $1.7 million over five years
Provide the organization with 60 months of cash flow to allow staff to focus on strategic planning and economic development activities, rather than fundraising.
Increase average amount per investment, versus focusing on total volume of investors.
Educate a relatively small pool of investors about the need for increased investment to support a five-year strategic plan
As with many nonprofit organizations, there was some reservation to hire a professional outside fundraising consultant such as Convergent
The Convergent Approach
In May 2013, Convergent began a feasibility study to determine the scope and focus of a Capital Campaign. Beyond arriving at the $1.7 million figure over five years, the feasibility study determined:
While the regional business community appreciated the Grant County EDC, the majority did not fully understand the organization’s role and impact in improving the region’s economic conditions
As a relatively remote area, attracting retail business to the region would be key to ensuring sustained growth
The region’s business community was extremely pro-growth and would support such an expanded economic development effort, but it must be communicated and positioned properly
Representatives from Japan’s Mitsubishi Aircraft announce the creation of a flight test center in Moses Lake, WA, for its Mitsubishi Regional Jet at the Farnborough Air Show.
The theme of the Capital Campaign, which launched publicly in January 2014, is “Building Prosperity,” signaling the need to truly show the business community the potential return on their investment in this campaign. This, according to Grant County EDC Executive Director Jonathan Smith, was the most notable takeaway for him.
“Many of our investors participated in our golf tournament and gala for years, investing the same amount each year,” said Jonathan. “However, after Convergent launched the campaign and explained the overall vision and the expected ROI to these businesses and individuals, many increased their investment significantly, in some cases doubling or tripling the previous amounts. It is clear to me that properly communicating our vision has been the key to our early success.”
Total commitments of $1.9 million over the next five years, surpassing the goal of $1.7 million
Total number of investors decreased, while average investment increased by 42 percent; very small investments were virtually eliminated and the goal was still exceeded, leading to a far more efficient investor communication and follow-up program for staff
By replacing the golf tournament and gala with the five-year capital campaign, Grant County EDC staff has significantly more time to devote to bigger picture and longer term economic development activities
Jonathan Smith, Grant County EDC Executive Director
We are off to a terrific start. Honestly, we are further along than I thought we would be, especially as it relates to supporting the key indicators of our strategic plan.”
The increase in time I and my staff are able to spend on economic development activities versus event and fundraising activities is hard to put a price tag on.”
Our previous approach often led to initiatives from our strategic plan being cut due to budget issues. Having an accurate, 60-month cash flow projection has fundamentally changed the way we do business as an organization. We are able to plan based on real budget numbers and are able to be proactive versus reactive.”
Decreasing Dependency on Events for Funding: An Economic Development Case Study was last modified: May 12th, 2015 by Samantha Hardwick