Organizations working on housing issues often suggest that the work of building a base of individual donors is out of proportion to the amount they bring in. “Compare,” says one person, “six hours to write a grant and get $15,000 to the amount of time it would take to raise that much money from individuals, unless you had one or two really big donors. I can’t really see that it’s worth it.”
From a straight money point of view, our correspondent is right. If all you want from fundraising is money, then building an individual donor base is probably not advisable. Foundations, even with their “three years and you’re out” rules, give more money for less work, if you know how to work with them. Government grants, which still exist to some extent, often provide more money than even a well-established donor base. However, the pitfalls of seeking grants are well-known, and I will not review them here.
No Strings Attached
Instead, I want to clarify why a housing organization would want to build an individual donor base as one of its fundraising strategies. The basic question in choosing any fundraising strategy is, “Who do we want to be answerable to?” Your source of money has a lot of control over the direction of your group. For maximum independence, an organization ought to make sure that no one person or source has very much power. Raising significant money from a broad base of donors is the only sure way to keep control of program direction in the organization and not with the funder.
Promoting Affordable Housing
Housing is simultaneously one of the easiest and the most complicated issues to understand. Easy, because it is generally agreed that people need to live somewhere. Complicated, because the mechanisms by which people who cannot afford housing will get a decent place to live is hotly debated by some and little understood by most.
Therein lies the primary reason to build a wide range of donors. If you think it is important for people who live in communities to understand more about housing, then ask them for money. Here’s an analogy: a friend or colleague tells you that she has invested in a deal that she thinks will more than double her money. You think the deal sounds interesting, but a little dubious. Perhaps you share some of your concerns, but your friend is clearly enthusiastic, so you drop it, thinking it is not your business. You hope it turns out well, but you give it little thought past that. A short time later, your friend asks if you want to invest. Now you ask all the questions you originally had, but you keep asking until you are satisfied with the answers. Now it has become your business, and you find out what you need to know.
The same is true with fundraising. In a community, people may have heard of your organization, but because they are not asked to be part of it, they don’t feel they can raise objections or questions critical of the work. Plus they have many other things on their minds. However, if you invite people to make a gift, they will feel they have the right to ask questions and get answers. Then when you need a broad base of individuals to write letters, show up at a town-planning meeting, or come to a demonstration, you have a base to draw on. People feel invested in your work, because they have made a contribution.
The mechanics of this strategy vary from person to person. Some people will literally be asked for money in person or on the phone and will ask you their questions right then. Others will give, then get their questions answered or their doubts resolved by reading your newsletter.
Another reason to raise money from individuals is that you can use it for general operating costs, a significant expense that is often under-supported by grants. In the letter quoted above, the writer had gotten a $15,000 grant with less work than getting 300 people to give $25-$50. However, the $15,000 has to be used exactly as the grant specifies, whereas the money from individuals can be used for general support.
Building a Base of Support
Finally, although it takes a fair amount of work to get 300, 400, 500, or more people to begin giving, it takes a simple, formulaic maintenance program to keep them giving. With a little more attention, you will be able to identify the 30-50 people willing to give you $500, $1,000, or more. If you keep at it, someday you will put in one hour of work and a cup of coffee, and an individual will give you $15,000. Donor programs pay off over time. They take two or three years to establish, and they are always a lot of work, but the idea is that the same amount of work yields more money every year. Donor programs are for organizations that plan to be around for the long term, who wish to be “owned” by the communities they serve. They are for organizations that desire to organize and educate their constituency. They are for organizations that want to build power and make a difference. Other than that, there is no reason to do them.