The Value of Fundraising with a Social Entrepreneurship Mindset

In 2005, PBS ran a documentary series called “The New Heroes.” Narrated by Robert Redford, it explored the approach, mindset and impact of 12 social entrepreneurs doing good in the world.  (You can watch full episodes on YouTube courtesy of the Skoll Foundation.)

The focus of this series was to illustrate how social entrepreneurs “develop innovations that bring life-changing tools and resources to people desperate for viable solutions.”

Sound familiar?  It should!  And it got me thinking….

If effective nonprofits have a similar positive impact — particularly if an organization’s mission is truly innovative and targeted toward people in dire need — then maybe it’s time for us to look at fundraising not from the mindset of “I raise money for charity” but from the standpoint of “I work with social entrepreneurs who want to invest in innovative solutions.”

What’s the difference between fundraising with a social entrepreneurship mindset versus taking a more traditional approach?

• Better Alignment with Key Philanthropic Drivers: By their modern definition, charities are organizations that provide help to those in need. There is no requirement they be solutions-oriented, which is probably why so many just LOVE to repeat the meaningless promise “Your donation will make a difference!”The fact is, “pure altruism” — the model of behavior described by Drezner and Huehls in their excellent book Fundraising and Institutional Advancement: Theory, Practice, and New Paradigms — is not what drives most people to philanthropically engage with organizations. Today’s donors want to feel confident that their financial investment in an organization, in whatever amount they choose, will produce tangible results.
• More Effective & Engaging Asks: In the traditional mindset of charity fundraising, it’s easy to fall into a habit of simply asking people for money to help the organization — especially when fundraising asks are presented to past givers.  (“You already know how important this organization is. Renew your contribution so you can continue to make a difference!” … *rolls eyes*)Fundraising from a social entrepreneurship mindset invites donors to invest in the organization’s unique solutions to the problem. When applied to making the ask, it’s an approach that requires no negative drivers (like guilt) to produce a gift. Instead, it presents the opportunity for fundraisers and donors to negotiate a mutually beneficial agreement supported by whatever unique combination of self-identification, social identity, impact philanthropy, justice motivation, and other drivers the donor deems important.
• An Opportunity to Make Good on Promises: When it comes to attracting new support and keeping donors engaged year after year, not much trumps the ability to report back on promises kept. Again, if the social entrepreneurship mindset sees donor engagement as a partnership, those investors expect you to report back to them on ROI.  You do that by sharing Proof of Impact.Too many nonprofit organizations confuse Proof of Impact with its less demanding cousin, Proof of Output.  If your organization reports back to donors that contributions enabled it to feed 100 low-income people in the community last winter, that’s Proof of Output.  $XX,XXX in donations = 100 people fed for 100 days.  If you want to report back to an investor with Proof of Impact, be ready to explain how that one winter of food security likely saved Mr. Jones’ life because he could afford to heat his home that season … and how Ms. Smith believes it was key to her three children (Jessie – age 9, Kris – age 11, and Kevin – age 14) making the honor roll for the first time in their lives.In the traditional charity fundraising mindset, Proof of Impact is often considered optional when making the case for support.  Proof of Output is what most organizations reference when attempting to demonstrate efficacy and prove they’ve been responsible stewards of donor contributions.  But when fundraising from a social entrepreneurship mindset, Proof of Output alone just doesn’t cut it.The level of detail reported back to investors via Proof of Impact is what provides the indisputable evidence that their investment in the organization had a direct and substantial impact on people’s lives.  The organization’s solution was proven effective, even if it’s clear that the effort needs to be scaled up.

In a world of seemingly limitless choices for donors to have impact, many will demand at least some elements of social entrepreneurship be reflected in your approach to fundraising and donor engagement. It’s a fantastic opportunity to move from the drudgery of traditional charity fundraising to a value exchange where everyone truly benefits. Delight in giving your donors and prospects the opportunity to get involved not as a source of funding who happens to have a pulse, but as a social entrepreneur investing in real solutions.