The Trials and Tribulations of Funding a Startup Nonprofit

As a young nonprofit founder, I’m learning to thrive in the cross section of the traditional nonprofit landscape and the contemporary technology of the for-profit world. The for-profit technology sector relies on innovation and vision to drive its industry forward, whereas the nonprofit sector has often lagged behind — fearful of supporting organizations that are new or different than those already in the field.

The Birth of a Nonprofit

Upon launching in 2012, Nine13sports quickly became a popular hit within the schools and youth organizations it targeted. It provided over 8,000 youth interactions in its first year. We approached marketing and developing our organization differently than most NPOs. We took full advantage of our tangible assets and leveraged them for support from the marketing budgets of solicited sponsors.

In the for-profit world, this approach would be standard marketing procedure. In the nonprofit world, however, this approach is unique and innovative. Our continued success is based on our ability to consistently demonstrate a measurable return on the investment of our sponsors, donors and supporters.

With our organization’s growth, it is clear that we need to successfully raise funds from a variety of sources — from the hard-fought-for traditional foundation grants to those discriminately spent corporate marketing dollars. Much of my job as Executive Director over the past year has relied on my ability to network and gain a better understanding of how local foundations play an integral role in our community. Despite our early private donor traction, we were often told by traditional funding sources that “there is only so much money to go around” and Nine13sports did not have an already proven track record to allow it to break into the foundations’ money-circle.

As the collection of polite “No’s” came from so many of our foundation and grant applications, I was inspired to better understand why our organization failed to qualify for these traditional grant monies and yet held large appeal to a broad range of private donors. We began asking, “Why aren’t we getting meetings with the key organizational players in our community?”

The Two Types of Donors

We typically rely on two types of donors.

The first is an in individual donor who evaluates a program based on the evidence of the organization’s current success, the engaging passion of its leadership and the belief that their donation will lead to a positive impact on the success of the organization. This is the type of donor that experiences a personal connection to the programs Nine13sports facilitates and realizes the immediate and lasting impact their support makes. These “early adopters” and supporters discover the joy that the bicycle can bring and how their partnership with us positions them as a partner in education relating to health, fitness and wellness. These private donors see the impact of their dollars in our increased programming, increased interactions and increased visibility within the community.

The second is the traditional foundation. Unfortunately, this type of donor has often proved to be unwilling to take a chance and financially support a new, younger initiative. There appears to be an inner circle of long-funded organizations into which new organizations must be invited rather than having the ability to approach and pursue. These foundations are cloaked in politics and red tape, preferring to support well-established nonprofit organizations over the innovative and status-challenging younger organizations.

From a business stance, I cannot fault them for being highly risk adverse. These are the funding organizations that wait to bestow their monies on a young nonprofit until it has survived the game of being an underdog and now has a proven track record of success. However, that kind of growth is difficult to achieve without their support.

An Opportunity for Foundations

The problem for a young nonprofit aspiring to its next level of success is that there are no funding sources in-between these two types of donors. Foundation support can play a crucial role in the early success of an organization, but it is incredibly difficult to come by.

There is an exciting opportunity for foundations to lead and trail-blaze a challenge to the status quo: to provide early funding for a nonprofit that has only a small list of accomplishments. Championing the cause of social entrepreneurship can be a coup for all parties involved!

What about you? Do you struggle with getting financial support from foundations? Let us know in the comments below!