Over the last twenty years, I have had the privilege of working closely with major donors by serving in a leadership role on multiple capital campaigns and endowment campaigns. During that same time, I was also working closely with angel investors for several new technology startups.
Recently, a friend of mine inquired as to whether my experiences with those major donors and angel investors shared any similarities. This question prompted me to check my daily journals from that time. I had a hunch that both groups asked very similar questions.
As you might guess by the title of this post, my hunch was correct!
And it makes sense, doesn’t it? Both are investing their funds based upon the expectation of a return on that investment.
In the case of the charity world, the return comes in the form of outcomes generated by the fulfillment of the stated mission through services.
In the case of the business world, the return comes in the form of actual dollars being returned to the angel investor, through dividends or the sale of stock.
From my journals, six key questions emerged time and time again. Let’s explore each:
1. Is there a strong Marketing Plan?
It makes little difference whether you are a nonprofit or a startup business; a strong marketing plan is needed for generating revenue and becoming a sustainable organization!
The mere existence of one ensures a solid game plan is underway for generating that revenue, and in the case of the nonprofit, creating goodwill.
Major donors and investors have usually witnessed first-hand the difference between having a solid marketing plan and attempting to operate without one. No wonder they not only ask, but also insist such a plan is in place!
2. Is there a solid Fundraising/Sales Plan?
You probably guessed that this question would come directly after the marketing question. The type of revenue growth desired by major donors and angel investors can only be obtained by creating and then properly utilizing a fundraising/sales plan.
Such plans establish a plan of attack that contains milestones to measured against. If those milestones are not met then such a need can be caught in time to allow for alternatives to be created and used.
The most successful charities and startups I have been associated with have a fundraising/sales plan in place before the first action is taken. Thankfully, this early jump-start allows for success to come quickly and often.
3. Will Outcomes be measured?
You would think this would be a given for both types of organizations. However, outcomes measurement is more often than not only established later in the life of the organization.
There is so much initial excitement in a newer charity or business that the desire to just get the mission work going or the product released seems to be the major focus.
Sooner or later, though, a major donor will ask the charity just what their impact is in regards to their stated mission. The same is true for angel investors and potential customers who ask is the product actually producing tangible benefits.
4. What are your organization’s Top 3 Challenges?
Knowing what the greatest challenges are in front of you is the only way to begin solving them.
Defining the top is an exercise that every organization should undertake defining. The mere exercise of moving to just three causes most leadership teams to unite.
The smart donor or investor knows how powerful this unification toward commonly shared challenges can be, often spelling the difference between longer term success and failure.
5. What are your organization’s Top 3 Priorities for the current year?
The top three priorities might overlap a bit with addressing the challenges. However, the very best commercial and nonprofit organizations are focused priorities that are often new initiatives.
The fact that the leadership team identifies the top three should allow them to be fully communicated to the entire team, board and all constituents. Knowing them by heart, allows them to drive daily actions. They often become part of the fabric of the organization, if not, the heart and soul!
6. Is a Strategic Plan in place?
It is not an accident that the strategic plan was saved until the end of six key questions.
The strategic plan builds upon all of the previous five. In most cases, the previous five items are contained within a well-thought-out strategic plan.
Strategic plans should be updated annually to reflect not only the achievements of the previous year, but also the new challenges arising.
Once again, the mere exercise of creating and then updating a strategic plan truly strengthens every commercial and nonprofit organization.
One final thought regarding creating a strategic plan for the first time: don’t try to create a be all, end all document. Capture the essence of your organization and then finish it out through your annual updates. It is a much lower stress being placed on your team.
These six questions were the ones with the highest level of overlap between the two worlds of profit versus nonprofit. There are many other questions to consider or to add to this list above.
Are there other questions your major donors have asked you? Please let me know in the comments below!