The Fundraising Cycle: building from an opportunity to a long-term relationship
[Editor’s note: This post is part of a series that looks into think tank funding models. It is based on a course that Politics & Ideas has delivered to a group of think tanks in Central Eastern Europe and Nepal]
Outlining a strategy for fundraising entails understanding the process from beginning to end. Securing the money is just the first step in a longer process that goes from monitoring opportunities to receiving the funds and reporting back to the donor at the end of a project, grant or activity. Moreover, funders should ideally support the organisation again in the future, and hence there is a long-term relationship perspective that comes into play. We outline below the main milestones in a funding cycle.
i. Monitoring for opportunities
This is an ongoing activity for most think tanks. Regardless of your funding model, there is a constant stream of opportunities for projects, grants and other types of funds at various fronts: locally, regionally and internationally. Some of these opportunities are formalised as such, like calls for applications of expressions of interest, while others are just potential doors for the think tank to approach. Both kinds of opportunities can be monitored through systematised practices. For example, the Budapest Institute has entrusted two junior researchers with the task to detect incoming opportunities from the European Union and various other institutions. Their report feeds into weekly discussions from senior members of the organisation. In a more business-development arrangement, potential corporate donors or philanthropists can be detected through a monitoring and filtering mechanism suited to the think tank’s needs.
ii. Evaluating and deciding
Not every opportunity is worth pursuing. Applying systematically to everything that looks remotely related to a think tank’s work (or similarly approaching anyone who has spare funds) can never be a sensible fundraising strategy. This is why it is essential for a think tank to discuss identified opportunities in order to make sensible decisions. There can be formalised criteria to decide which calls to respond to (or which donors to approach) or informal discussions among senior researchers and staff (e.g. during ‘executive committee’ or similar body meetings), but it needs to be done consistently. Broadly speaking, think tanks should consider how potential work, grants or activities might affect the research agenda, the staff & managerial requirements they would impose, they type of communications they would entail and their potential for policy influence.
iii. Developing Proposals
Having decided to pursue a specific call or to approach a potential donor with a proposal, the fundraising effort moves on to the development and/or implementation stage. Outlining a solid proposal for funds is time-consuming and there is usually no guarantee of success. Sometimes, part of this time and effort can be hedged by donor requirements for a short concept paper before inviting successful ideas for complete proposals. In some cases, basic concepts can be developed and then refined for different specific proposal applications – particularly if it is clear that multiple donors may be needed for a project. Regardless, whatever document is submitted to a potential donor will determine the think tank’s room for manoeuvre once it has the funds to carry out the work. Some funding sources might provide more flexibility but it is important to write a proposal that can actually be implemented. Some tips to bear in mind at this stage:
Allow for enough time to prepare the proposal
Collective efforts are usually better than individual ones
Collect feedback and ideas from different functional areas and researchers with different specialisations
Abide by any available guidelines and ensure you fulfil any requirements
Build on successful experiences from the past and learn from mistakes
Crucially, ask for the money you actually need – do not promise more than you can deliver for a given amount
iv. Follow-up & Reporting
Finally, funds usually come in with various reporting requirements attached to them. This is an increasingly important and time-consuming task for think tanks, since donors have generally stepped up their demands for accountability from grantees. It is important to consider these requirements from the outset of a project so that those in charge of fundraising are well prepared to respond.
Reporting implies that the think tank is generating some sort of information about its outputs, outcomes and sometimes even impact. In this sense, this function could be articulated with efforts to monitor and evaluate what a think tank achieves (or not). A central fundraising unit could consider streamlining this information from diverse formats of reporting into a unique organisational repository so that the time investment feeds into organisational operational and strategic decision making processes.