Disclaimer: It is always a good idea to connect with your own legal counsel for personalized recommendations as you think about how best to structure your organization.
Now that you’ve launched your mission-driven business or organization, you may immediately be turning your attention to grant funding. But before you start Googling “grants for new organizations and businesses,” know that grant-making institutions want to see a financially stable organization before they award you with funding. There are a few exceptions to this, and that will be for another blog post. You may immediately start asking for donations to those around you, and while your idea may generate lots of interest and celebratory kudos, you may find that others are perhaps hesitant to jump in as financial supporters of your cause. Rest assured – this does not make your cause any less worthy, or any less mission-driven. It does however, mean that you need to be creative in how you approach fundraising and raising capital.
Mission-Driven Non-Profit Organizations
If you are thinking about establishing a non-profit organization, this designation with your state has a number of tax-related benefits. For the purposes of this blogpost, we will focus on one: any donations made to your organization can be claimed as charitable donations by your donors. This means that in addition to supporting a great cause, donors to your organization get the added benefit of choosing to claim their donation to your organization on their taxes. While most donors are not motivated to give for tax purposes only, it is an additional incentive for some donors.
If your organization is registered as a non-profit, here are some ways you can approach fundraising:
- Establish and grow a strong Board. Your Board should be a diverse group of individuals who are fully supportive of your organization’s mission and are committed to its success. In many organizations, the Board takes the lead in fundraising efforts and contributes financially to these efforts.
- Leverage your Board’s connections. Your Board can give your organization access to spaces and people that you would not have been able to approach otherwise.
- Host a fundraising event. Silent auctions, fundraising dinners, virtual fundraisers are all examples of events that can help bring in funds.
- Hold a fundraising campaign. If your organization is working towards a larger, more expensive goal, planning and launching a campaign to reach that goal is one way to clearly share to donors what your organization’s needs are, and a nice way to celebrate them when your goal is reached.
If you are considering establishing a mission-driven business, you will need to think a bit more creatively about raising capital. Even though your business may be doing great work, you cannot raise donations as you would if your business designation were that of a non-profit organization. Not to discourage you, but it is a well-known fact that it takes a while, even a few years, for newly established businesses, mission-driven or not, to make a profit. This can be a challenge, but this is where creativity comes in. If you need funds for your mission-driven business, could you consider any of the following?
Create something to sell. Just because your business is mission-driven does not mean you do not need a sound business plan or that you do not need a clear path to making money. You are probably thinking, “I’m not an expert,” or “I don’t know how to create products.” Don’t overthink it – just start small. Essentially, the question is, what problem am I trying to solve? What solutions do I propose to help solve it? How do I communicate this solution to the world – a book? a class? a video series? A guide? It is your choice! But one thing is sure, in order to raise working capital, you need to have a product or service to sell that will help you bring in these funds.
Give a little. If you are in a position to contribute perhaps a small portion of your own money into your business, this would help give you more working capital for your mission-driven business. This may not be possible for everyone, but owner’s contribution is one of the ways that many startup business owners start to grow their business. This does not have to be an exorbitant amount. Many mission-driven business owners have a set amount of money each week that they allocate to their business.
Spread the word. Are you telling people what you offer and what you are selling? This can be done via social media, your website, in person, etc…but if you don’t promote your services, how will people know to purchase them?
At this point, you may be wondering, where does grant-funding come into play with all this? Stay tuned – Innovative Solving has got you covered!