Remains of the Day: Fundraising Still Job One
It took Martin Fisher, the co-founder and CEO of Kickstart, all of 30 seconds to answer the question on the biggest thing he’d learned at this 4th annual Skoll World Forum on Social Entrepreneurship:
"There is still a shortage of funds, the funds that are there still very hard for the social entrepreneurs to get. Social entrepreneurs are still spending too much of their time raising money."
So that’s it, eh? Raising money is still "job one" for the world-changers who gathered here in Oxford, particularly those who don’t have a personal fortune to finance their social enterprises. Along media row the other morning, one waggish fellow remarked perhaps a little too loudly – "some of this reminds me of the old Steve Martin routine on How to Be a Millionaire – you know, ‘first, get a million dollars….’"
Time and again in the Skoll sessions, committed social entrepreneurs talked about how hard it is to raise funds – donations, capital, "investments" etc. – for innovative ideas that don’t fit in to what foundations and philanthropists believe about funding projects. Outside of the self-funding ventures in micro-enterprise, the money it takes to fire up major movements like tackling global warming, eradicating poverty in Africa and south Asia, preserving delicate environments, and empowering poor women generally comes from fundraising.
And whether the funds go to social venture funds or operating budgets, they’re obtained in the time-honored manner – through person-to-person meetings and solicitation. Major donors must be convinced to support these movements. And that takes vital time.
Ed Skloot said it yesterday. "Scaling up is very big topic in the states, and there was a big dollar infusion [for social entrepreneurship], and now we’re having difficulty in the capital market. That may be the Achilles heel."
JB Schramm, founder and CEO of College Summit, agreed: "We face what so many nonprofit organizations face – the fact that innovation is strangled by fundraising constraints , that [major donors] tend to have a concentration on programs."
He described a fundraising innovation that puts the organization’s financial needs on a single term sheet, with quarterly goals and metrics – donors simply buy into the term sheet, and follow the quarterly reports on goals. And he asks them to commit for three years. This takes the "program focus" of donors out of the equation and orients the donors toward the overall success of the organization.
Government funding was also a topic, though approach gingerly (social entrepreneurs, generally speaking, do not want to be boxed in by regulation). Michele Giddens, executive director of Bridges Community Ventures, a privately owned fund management company with a social mission, was honest: a government grant created the fund, which might never had gotten off the ground without the public money.
Jacqueline Novogratz, the CEO of the Acumen Fund, an optimist and energized leader whose whole mission is about providing new ways to fund social change, admitted that fundraising remains central – that social enterprises "always came back, somewhat reluctantly, to philanthropy – to finding a few big supporters." Nothing I’ve head here changes that formula, particularly for start-ups – entrepreneurs have always had to battle, to scratch, to promise their first-born to get the capital they need to launch something. For social entrepreneurs, that means major donors.
Said Novogratz: "Look, we need philanthropic money still."