This is how I’m fundraising in uncertain times

Funder diversity is great, but has dangers

In an uncertain funding environment, diversity offers security but has significant drawbacks.

Having a diverse range of revenue streams is as important as having variety within each stream. For the EJC, the options are philanthropy, technology, government, and direct-to-beneficiary support.

But this contains risks and significant overhead costs. Tailoring your mission and programmes to each funder can lead to mission creep. Multiple reporting and impact measurement processes can exhaust your team.

Understanding and communicating your core proposition, mitigates some of these risks, but not all.

The second type of diversity

You also need diversity in the risk of your programme planning. As Storyful’s Chief of Product, I would often talk about this matrix:

When evolving any organisation, you need to think about the tradeoffs between products and markets, between newness and oldness. In volatile situations, a spread of focus is the best option. However, evaluating the exact division of effort is complex.

Same product, same market is your base. For some, doubling down on that and building “moats” to protect that business is key. For others, that battle may be already lost. They need to ensure they’re investing enough capacity in the far-out ideas.

Accept the churn, prepare for the churn

A non-profit Executive Director gave me some sound advice last month. Understanding that all donors have cycles is essential. Understanding where you are in that cycle even more so. Applying your renewal or new donor relationship efforts appropriately is a matter of survival.

Accepted wisdom is that recurring revenue is great. But it is also a trap for those working with large funders.

In the non-profit world, the longer that revenue recurs, the more likely it is to reach the end of its cycle and churn. Unlike other forms of revenue, the cost of switching for the donor is minimal (and in some cases internally incentivised).

Work your plan

Three documents rule my fundraising focus.

A four year outlook helps me understand where the biggest potential for churn is, and how I can prevent it. Getting a handle on exactly how much of my funding comes from existing sources, and how much could come from new sources, is vital for setting targets.

From that, my funding streams overview lets me focus fundraising targets. I divide those targets between our four revenue streams: philanthropy, technology, government and direct-to-beneficiary support. The overview lets me look at untapped areas or easy wins.

Finally, the funding pipeline outlines specific funder leads and conversations. It contains projected revenue, dates and priorities. Checking in with this keeps me sharp.

When to invest?

“The line from funders to IRP to journalists was a straight one, and one we’re proud of. We didn’t want to spend money to make money, we wanted to spend money to report. It also hastened our demise. In order to remain competitive, we would have needed to spend a lot more money on ourselves, rather than our programs.” (Glendora Meikle, deputy director of the International Reporting Project)

This balance between overhead and programming is incredibly hard. It is something I think about every day. I wrote this in a note to my team recently:

“As an organisation, we need to equip ourselves to understand the challenges journalists face. We need a culture of agility and innovation ourselves, so that we can move towards new opportunities fast. New skills, career development, regular check-ins, new offices, upgraded computers, and better online platforms are the foundation of this. Making the EJC a better place to work is essential to our fundraising, sustainability, and the continuation of our mission.”

The International Reporting Project closing is a stark reminder of how important it is to get this balance right. Even well-run organisations are subject to market forces.

While I’m really sad to see the IRP close, I hugely appreciate the openness with which Glendora and the IRP team approached this tough decision. Their lessons are ones that all journalism non-profits need to learn.