What are the best practices for creating a funding strategy for your social enterprise?

Defining funding needs is akin to plotting a course on a map before a journey. It's not just about the destination; it's about the resources required to get there. It's not merely about the amount; it's about timing, purpose, and potential. In the entrepreneurial landscape, where dreams meet pragmatism, a clear funding plan isn't just a request; it's a narrative. It tells potential funders not just what you need, but why, when, and how you'll utilize it. In the dance of investment, where trust meets ambition, a well-articulated funding need ensures you move in sync with your vision, backed by a chorus of supportive stakeholders.

Crafting a funding strategy for a social enterprise, I prioritize a mix of sustainability and impact. I start by identifying clear, measurable goals that align with our mission. I research and target funding sources that share our values, from grants to impact investors. I create compelling narratives that showcase our social impact, financial health, and growth potential. Networking is crucial; I build relationships with potential funders, engaging them with our story. I also explore revenue-generating activities that complement our mission, ensuring a diverse income stream. By balancing purpose and profit, I lay a solid foundation for long-term success and meaningful change.

Do not forget about your audience and their pain-points. This is why you are building a social corporation after all; to bring positive change to the world.

Regarding funding for your social enterprise, it's like shopping for the perfect outfit – you've got options! Start by checking out what's in the wardrobe: grants, donations, loans, equity, crowdfunding, competitions, awards, and partnerships. Each option has its perks and quirks, from free money (grants) to collaboration opportunities (partnerships). But, they also come with their own rules and expectations. So, before you dive in, take a moment to explore what's out there in your sector and network. See what fits your enterprise best, both in terms of eligibility and what suits your mission.

I would probably seek funding in the following order from first to last: 1. Grants 2. Donations 3. Crowdfunding 4. Awards 5. Partnerships 6. Competitions 7. Equity If necessary: 8. Loans

I have seen very less organization explore earned income strategies within their funding model. This would include product sales, fee-for-service models, etc. Since most causes have sufficient followings there is room to generate extra revenue through such models.

This is one of the tips I provide to my clients; always diversify your funding sources. As the adage goes, “don’t put all your eggs in one basket”. This remains true for any entity wishing to become sustainable. Each avenue for funding requires different levels of resources from you and/or your team so it’s important to ensure that everyone is aligned with what the requirements are for different sources of funding. Ensure that you perfect your pitch/application/business plan so that it not only tells your story but is compelling to the entity/entities providing the funds. If you need to, hire a professional to help you craft the supplemental documents and information that you need to be successful.

Building relationships is an underappreciated component of a fundraising strategy. Ideally you want to start the process of getting to know your targeted funders before you need the funding - as in many months before. The risks associated with providing capital is high and working with a provider who knows and trusts you, your track record, your character, your resilience and creativity can go a long way towards successfully securing money for your business. Securing a referral from someone connected to the funder always helps, but if not possible, take the time to understand their business, investment, grant or lending criteria and track record, their values and team before reaching out is critical.

While it maybe hard to build relationships with each individual donor, todays age of electronic media has made this much easier. Some of the ways to build relationships with donors include: - Social media like Youtube, Instagram, FB etc. - Email updates - Regularly updated website - Internet Radio - Texts Depending on the size of the organization one may utilize all or some of these.

Be genuine here and do not create relationships just for the sake of funding and money. Many investors can see you a mile away if you approach in this manner. Remember they are people not ATM machines. Build real friendships.

I remember reading somewhere before that FAIL is an acronym for "First Attempt In Learning". As an entrepreneur failing a strategy, project, market entry, etc... can be commonly expected. This is why we "pivot". Get an MVP (Minimum Viable Product), fail fast as many times as needed for you to keep pivoting until you reach success. Determination and perseverance are important for an entrepreneur; as well as patience.

This depends on who you are asking to fund you. Crowdfunding will most likely not have the same audience and strategies as Venture Capital funding. Other than that the type of funding can impact your strategies; is it equity funding, debt funding, crowdfunding, SAFE, etc... Sometimes the entire approach might need reconsidering.

Get creative! I work with a lot of entrepreneurs and founders in the creative industries and have encouraged them to use their talents to craft methods of funding that both align with their values & build community. For example; an artist needed a pretty substantial amount of funding for the development of a gallery space. I was hired as a consultant to help them develop their funding strategy. While the strategy included applying for grant funding, pitching to investors, and traditional bank loans etc… one creative idea we came up with was to offer a “paint like the artist” kit for purchase. The artist then executed an extended tour where participants were able to learn from the artist. This helped build community while raising capital.

Remember to keep on following the passion and having fun. Money is important in the sustainability of a corporation however it should be seen as a medium. Once you follow the passion and work on innovating and achieving that positive change in the world, money will soon follow in due time.