Raising Cash for Good in a Bad Economy
How to raise cash in today’s seemingly cash-deprived environment is a question that a lot of organizations are grappling with. Funding is a little harder to come by these days. Ashoka Fellow Earl Phalen, Ashoka Fellow and Founder of Summer Advantage, has faced this problem as the CEO of two non-profit organizations focusing on education. In a recent interview, done by Pepsi Refresh and posted to their blog here, he provides a model for how to achieve funding goals while denouncing the myths of fundraising in today’s economy and advocating for driving down costs while improving quality to increase impact.
On the subject of myths of fundraising in today’s economy Earl says:
Today I think it [the biggest fundraising myth] really is that the economy’s bad so that there’s no money out there. There will always be people with money. You just have to look a little harder to find them.
Another myth I lived by for my first 10 years of fundraising is that because we’re a nonprofit, we shouldn’t make a profit. We took pride in living right at the poverty line, and it seemed that every new grant just barely saved us from going under. The best of the best don’t operate that way. Look at Teach for America [Ashoka Fellow Wendy Kopp’s organization]: they’ve got a $150 million budget and a $150 million reserve. Geoffrey Canada [well-known Founder of Harlem Children’s Zone] has a $36 million budget and $40 million tucked away in reserves. You’ve got to cover your resources for the long-term.
Planning for the future, in difficult times, is something we can all benefit from thinking about. But Phalen also warns against forgetting your mission as a social entrepreneur changing systems, in the drive for success and expansion.
Look at history to see organizations and leaders that have really affected change. Is that the type you’re building? Or are you just excited when you’re in the newspaper? Being in the newspaper is nothing. Being in the newspaper and doubling your revenue so you can meet the needs of more people is something.
To learn more about Earl Phalen and read the Pepsi Refresh interview, click here.