Four Foundational Practices for Privately Funded Organizations

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The commitment to being a 100% privately funded organization doesn’t require a blind leap of faith. Assuming your commitment is a principled one, faith certainly plays a part, be it faith in your mission, faith in your donors, or, ultimately, faith in God’s provision. But wise practices play a part, too. Here are four foundational practices that will help instill faith in the flourishing of your privately funded organization.

1: Build the Board of Directors wisely.

A strong board of directors is crucial to a privately funded organization’s success, particularly if the organization is small. The tendency to put people on a board merely out of affinity is problematic for a number of reasons (and worthy of its own article), but for fundraising purposes, consider the following when weighing a candidate:

Mission Alignment.

Not only should a board member believe in the mission and meet the character-related requirements you desire, but they need to clearly understand and agree with the reasons why your organization is committed to private funding only.

Commitment to Giving.

Board members must lead by example. Every board member need not be affluent, but every board member does need to be invested financially in the success of the organization. When approaching other donors for support of the general fund or a capital campaign, you need to be able to say, “Every member of our board has already pledged support.” And board members should be able to give more than money. A well-rounded board will have people of various skills who can offer in-kind support via time, materials, and expertise, all of which can help reduce financial costs for an organization.

Ability to Connect and Influence.

Again, board members need not be affluent, but every board member must understand and commit to his or her responsibility as a fundraiser for the organization. The willingness and ability of board members to network, make connections, and influence others toward your organization are especially critical to long-term success when the commitment has been made to eschew public dollars.

As you have openings on the board, keep this key qualification in mind. And if you’ve got board members who came on without these expectations made clear, have the conversation now.

2: Create an easy entry point for individual donors.

You’ve seen the commercials. In fact, you’ve probably even given at some point. With a lead like “For just 99 cents a day…,” or “For just the cost of 2 cups of coffee…,” an organization shows the great impact your loose change or handful of dollars can have in people’s lives. A key capital campaign principle I learned years ago from Clark Dickerson (of Dickerson, Bakker, and Associates), applies here as well: minimize the goal to maximize the gift. Essentially, you can build a large base of individual donors who gladly give a small monthly amount when they can see a direct impact from their gift. 

Here’s an example from the work I do, in addition to True Charity, on the advancement team for Watered Gardens Ministries: Years ago, we isolated the overnight shelter portion of our services, determined the cost to provide that portion of our services, and divided it by the number of beds we had. The result? We discovered that the average cost per bed in our shelter was $15/night. Thus, the One Night campaign was born. By taking a large annual need for our overnight shelter services, say $262,800, dividing it by 48 beds, and then dividing that again by 365 days, we minimized the overall goal into an amount that maximized the gift of an individual donor who could make an impact without having great means themselves. The same steps we took can be taken by your organization as well.

Crunch the Numbers.

Depending on the size of your organization and how many services you offer, you will either use the total operating budget or isolate a portion of your services. As you determine how many people you serve and the average cost per person per month, you are looking for a monthly cost in the $15-$40 range.

Make the Connection.

Utilize all of your forms of communication to make the appeal to donors that they can become partners in your work for just $XX/month, and show how that gift directly impacts the lives of those you serve.

Offer the Link.

Make it as easy as possible for them to sign up. Create a link taking them to a page where you have reiterated the great impact of even a small gift, and make sure they have the option to set up recurring donations. Here’s the link for the Watered Gardens One Night program as a reference.

Follow Up.

In addition to a monthly receipt letter, consider a quarterly email update, both of which share stories of lives impacted as a result of “donors like you.” We also reach out annually to our monthly donor partners to ask them to consider “adding a night or two” to their current contribution. This results in increased monthly gifts from $15 to $30, $45, and more.

The result from Watered Gardens’ One Night campaign, now in its eighth year, is the equivalent of nearly 1,900 monthly donors giving at least $15/month (many give $30, $90, or more to cover more nights). These donors have created a broad base of individual support that really adds up. As such, it protects the organization from merely relying on large one-time gifts that may or not come in each year.

3: Prioritize local business partnerships.

The development of strong relationships with local businesses is beneficial for several reasons, and direct financial support is just one of them. Local businesses can be vocal advocates to their customers, often being willing to promote your organization at the checkout counter. If they are part of a larger chain, there could be grant opportunities, too—more on that in a minute. Finally, local businesses are often able to contribute in-kind donations of materials as well as volunteer hours of service, both of which can reduce your organization’s expenses.

At Watered Gardens, the annual goals for our community outreach director include the development of new business partners, the cultivation of current business partners, and the recapture of previous business partners, too. To reach these goals, we make a concerted effort to visit local businesses in person, have a regular presence at local rotary clubs and chamber events, and always go the extra mile to express appreciation for these partners at events and via social media.

4: Maximize private grants.

In my experience, the temptation to compromise a commitment to being 100% privately funded is never stronger than when a hefty government grant becomes available. Thankfully, I’ve learned over the years that not only are those grants typically harmful in the long run, but there are plenty of private grants out there. Finding them just requires a little bit of digging. As mentioned above, in developing business partners, you’ll likely learn of corporate grants that are available. You can also tap into the grants offered by local community organizations like rotary clubs, elk lodges, etc. There are also community foundations to explore. At Watered Gardens, we’ve occasionally subscribed to search engines like Grantstation to help find private grant opportunities that align with our services and in our geographical locations (when applicable).

With intentional effort and a well-planned fundraising calendar, the implementation of these four practices will build confidence in your commitment to walk by faith, maintaining total control over your programs by staying 100% privately funded.