Nonprofits and Startups | Birds of a Feather


I enjoyed spending an afternoon at Capital Factory in Austin a few years ago attending 3 Day Startup‘s “Global Roundup.” I learned so much!

What I discovered is the process of securing major gifts for nonprofit organizations is quite similar to securing funding for a startup business concept. After some thirty years of experience developing and/or repairing and implementing capital campaigns across Texas, I definitely see striking similarities.

Drew Hendricks wrote an insightful article for Forbes a few years ago (no longer posted online), “7 Steps to Getting Funding For Your Startup.” It provides a helpful framework for my argument:

  1. Have a plan of attack
  2. Do your homework
  3. Start searching for money
  4. Network
  5. Be prepared
  6. Have the ultimate pitch deck
  7. Be persistent.

Have a Plan of Attack

Drew points to the need for startups to have a business plan, and I would argue this is also true for nonprofit organizations. Nonprofits need to have a clear vision regarding what they hope to accomplish, and that vision should inspire confidence and be genuinely convincing to potential donor “investors.” The project for which funding is being sought should be a meaningful part of an organization’s strategic plan, and the project should relate directly to the nonprofit’s mission, and the fulfillment of that mission.

Do Your Homework

Determining how much money your startup – or nonprofit – will need in order to accomplish the goal at hand is key. It is not terribly inspiring to donors and investors to help you reach a fundraising goal, then to find your organization still lacks the funding required to complete the project. Trust me, I’ve seen that happen on several occasions, and I’ve had to work hard to raise those funds.

For instance, nonprofits should consider including contingency funding in campaign budgets. I have worked on a few capital campaigns where construction materials like concrete and iron suddenly spiked in price due to increased demand statewide, nationally and/or internationally. Review your budget and add contingency funds for those “just in case” moments. Do not put yourself in the position of having to return to your donors or investors with your hand out again.

Start Searching for Money

Drew’s article points to venture capitalists, angel investors, commercial lenders and government agencies, and he notes how startups should conduct research to find appropriate investment candidates.

Smart nonprofit organizations conduct the same kind of in-depth research prior to launching a campaign – a process that if done well takes time – looking first internally to likely existing individual, family, foundation, corporate and government donors, then spreading out to potential external sources of funding.

Nonprofits will want to focus on potential donors who are more capable of making significant contributions. Those prospects should be approached first in order to attain the financial goal more quickly. But also, do not forget those supporters who might not be capable of making significant donations, yet they may have connections to others who are capable. Be sure to identify “influencers.”

In my experience, the more thoughtful advance research a nonprofit conducts, the better (and more professionally) a campaign will run.


Drew suggests startups network online to start, investigate seed accelerators, meet those interested in their line of business and the like.

Today, nonprofits also need to network online. Taking a step back for some of my nonprofit colleagues, they also need to have a polished online presence (website, Facebook profile, Twitter account, LinkedIn account and the like).

Donors and “investors” are active on many platforms, and they are learning daily about your work and accomplishments there. Nonprofits need to be online also. Some of you are still holding back, but don’t.

Through whatever means you choose to communicate, ongoing communication is key. It is the constant drum beat behind any successful campaign. I have seen nonprofits fail simply because they failed to communicate!

During the 3 Day Startup retreat at Capital Factory noted above, several angel investors noted the critical need for communication with all investors before, during and after funding is secured. The same is true for nonprofits!

Be Prepared

Drew notes, “Prior to asking for funding, you’re going to have to argue your case in probably a number of meetings. Don’t get flustered and blow this golden opportunity.” He notes these insightful tips, and I cannot improve upon them.

  • Describe your goals in a clear, concise and efficient manner.
  • Know the people that you’re sitting across from.
  • Have questions prepared.
  • Practice as much as possible.
  • Make a great first impression – for example dress to impress.

Have the Ultimate Pitch Deck

Some excellent points are listed in Drew’s article regarding developing an effective case for financial support. Your case should include:

  • Vision
  • Validation
  • Market Opportunity
  • The Problem
  • Product/Service
  • Revenue Model
  • Marketing/Growth Strategy
  • Management Team
  • Financials
  • Competition
  • Asking for Investment

What’s not to like here! The logic is much the same for a nonprofit major gift or other fundraising campaign.

Be Persistent

While nonprofit organizations do not want to annoy donors and potential donors, I have personally seen a “no” response to a request for a major gift turned into a “yes” over time.

“Of course you don’t want to nag your potential investors. But you absolutely need to follow-up. Checking in every now and then until you get an answer shows that you’re serious about your startup. And, even if you’re denied, you can ask why you weren’t funded. Remember, learning from our mistakes is one of the best ways to find eventual success.”

In Closing

Carolyn’s Nonprofit Blog contains a variety of articles and posts about how to organize nonprofit major gift campaigns, and cost-effective ways to “do it yourself” – and if not all of it, most of it. Of course, startup business ventures are not exactly the same as nonprofit fundraising campaigns, but the similarities are striking.

Nonprofit fundraising executives might consider attending similar startup programs online and/or in-person. As I discovered, these are eye-opening, hands-on learning events, especially when they include actual investors who provide in-person input about what you are trying to accomplish. It is my hope that 3 Day Startup will consider developing a nonprofit program specifically aimed at securing major gifts! #SmartThinking

My Instagram shows a “virtual” laptop fireside chat at Capital Factory about the critical role of regular communication with investors and partners. The same is true for major gift fundraising. If there is anything I have learned after decades of raising major gifts, it is that communications can make or break a nonprofit’s reputation and its ability to raise funding.

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.