Funding as a Non Profit

When you’re new to any business, there are LOTS of growing pains! Nothing is easy from the start. Even babies have a hard time napping… when now that’s every adult’s favorite thing to do. So how can you try and tackle those problems before they even materialize? We have some answers for you. 

So let’s say you’re a brand new non-profit getting ready to raise money. Here’s what you should expect, some best practices, and the due diligence you should be prepared for! 

Fundraising

Fundraising is exciting! Most importantly, you NEED to get all of your ducks in a row. Donors want you to be able to explain your program and how you can create an impact. They want to hear your goals for the future! Sticking around 1 year and three year goals is just fine. 

Understanding your impact metrics is huge! But this will happen little ways down the road when you can do a randomized control trial. For now, outcome metrics are all you need. You want to tell the donor the 3-5 outcomes that your program will reach. Keep these metrics easily measurable. 

Donors are becoming more and more like for-profit investors. They require:

• A balance sheet
• Income statement
• Board approved budget
• 18 Month liquidity spreadsheet to understand cash flows

So it’s essential to get those processes started! To get these boxes checked, you’ll want to have a board in place… even if it is just two people. 

There are a few other metrics you should keep in mind. One of which is, how much are you spending at headquarters V.S. at the field. Furthermore, how much are you spending on programs V.S. fundraising V.S. Back office? Keep in mind; programmatic spending should cover at least 80% of your total budget! 

Is it Harder or Easier Now?

The truth is, it’s just as hard as it used to be. Valuations don’t matter as much anymore. It doesn’t matter how much money you’re trying to raise; what matters most is if you are a good investment! Investors want to see that they will have a BIG return. So depending on the return that your company thinks they can show in the next 5 to 10 years, that will determine which investors are right for you!

So don’t stress too much. If you take away one thing from this, it’s that you should be getting your ducks in a row. Then go from there! 

Want to learn more about how to correct your Due Diligence? 

Check out our NEW Monthy Membership, the CFO Thinking Partner. 

This is just one of the many topics we will discuss within this membership, and it is a sustainable way for YOU and YOUR team to get the answers you need to the corporate finance, and rhythm-building questions you have. 

Sign up below for more information