Philanthropy & Funding

Why Fundraising in Rounds Works

Setting specific periods for reaching out to donors can help nonprofits stay focused on their goals and balance fundraising efforts with the work of the organization.

It’s hard to raise money. But philanthropic funding is vital to nonprofits, and as a result, most organizations find themselves fundraising all the time. Between event organizing, due diligence, communications, and reporting, I’d guess that many nonprofits spend 50 percent of their time working on fundraising-related activities in one form or another.

Our nonprofit, Watsi, took that approach in the beginning, but we quickly found that it was nearly impossible to do a good job of fundraising and running the organization at the same time. 

We decided to try something crazy. Instead of perpetually fundraising, we set out to raise a defined round of donations, taking an approach similar to companies that raise rounds of investment. Our goal was to raise $600,000 in three months. With that, we’d be able to hire six people and meet our organizational goal of funding health care for 2,000 patients over a two-year period.

We had no idea if our approach would work. But we agreed that regardless of how much we raised, we would stop fundraising after three months and go back to working on Watsi full time, even if it meant employing two people instead of six.

Here’s what we learned in the three months we spent trying to raise the round:

1. Raising a round makes fundraising more efficient.

When we started our fundraising efforts (before we tried raising a round), we had no idea how long it might take to reach the target we set for ourselves. That made it nearly impossible to prioritize fundraising alongside everything else we needed to do. We didn’t know if we were running a sprint or a marathon. As a result, we erratically switched between fundraising mode and work mode, and we failed at both. 

In contrast, raising a round of donations made fundraising a priority, not a distraction. We scheduled 10 meetings per week, instead of 10 meetings one week and zero the next. This meant less time context-switching and less time preparing for each meeting. And because the feedback loop was tighter, we learned quickly and got better at fundraising with each passing week. If three potential funders in a row got confused when we presented a particular metric, it was clear we needed to change how we explained it.

2. Raising a round gets everyone aligned behind the same plan.

Everyone donates for different reasons. And before we started fundraising in rounds, we would get ready for each fundraising meeting by thinking: “How can we get them to donate?” We’d then adjust our plans as needed to reflect potential donors’ preferences. For example, if a donor wanted us to partner with a particular hospital in India, we’d consider doing it, regardless of whether we thought it was the approach that would help the most patients. Soon, even we had a hard time keeping straight what we were actually doing.

By contrast, when we were preparing for the round, we had to come up with one plan to raise money from everyone. This forced us to ask: “What’s going to have the biggest impact?” Going all in and committing to a single plan meant we were self-selecting for donors whose interests were aligned with our goals. We might have been able to raise more money in the short run if we’d tailored our plans to each donor, but we are more likely to succeed in the long run with a smaller group of donors who are all on the same page.

3. Raising a round brings clarity to relationships.

Originally, when donors asked us how much money we needed, we told them the biggest number we thought they could donate. And when they asked us when we needed the money, we’d say something like, “Whenever’s good for you!” for fear of scaring them off. As a result, we existed in a sort of purgatory, where no one donated but no one explicitly said “no.” We didn’t know whether people needed more time to consider supporting us or whether they were just avoiding turning us down.  Our relationships with prospective donors became increasingly ambiguous and awkward.

During the round, when donors asked us how much we needed, we knew exactly what to tell them. There was no ambiguity and no awkward ask. And because of the deadline, donors were either in or they were out. Most important, since the round, our donors have become partners, not just funders. They aren’t constantly wondering whether we are going to ask them for more money. Instead, our meetings are explicitly focused on how Watsi can help more people.  

Overall, we think rounds are better for everyone. In the three months we spent raising a round, we went to 138 meetings and raised $1.2 million from 14 donors. In the two years since then, we’ve exceeded our organizational goals and funded healthcare for more than 4,000 patients in 21 countries. Now we’re gearing up to raise a second round of donations to scale Watsi. And regardless of the outcome, we’re convinced that this approach is better for organizations, donors, and most important, the people we serve.

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COMMENTS

  • Hi Chase,

    Where in the world where we can find organizations willing to venture partnership with the most destitute sector in society?
    Our city dumpsite scavengers community manage to organized themselves as instructed by local funding agency.  After being duly recognized as an association in 2009, still nothing happen. 
    Today,  another requisite is being ask.  This time it is close to impossible to comply.
    Maybe Watsi can be of assistance Chase. 
    Nice article.  Thanks for posting.

    Pleasant greeting to SSIR Team!

  • Chase—
    Thank you for sharing your experiences. Do you have any plans to do long-term analysis on this approach—e.g., using an fundraising analytics partner like Target or Analytical Ones? Would be very helpful to you (and anyone you’re willing to share info with). Thanks again for posting!

  • BY Chase Adam

    ON July 10, 2015 04:26 PM

    Hi Nelson! We’d be happy to help in any way we can. Feel free to shoot me an email at chase at watsi.org.

  • BY Chase Adam

    ON July 10, 2015 04:32 PM

    Hi Laura! We do plan to measure the success of this approach over time. We’re raising our second round now and we’ll likely raise our third (and hopefully final) round in two years. After each round we plan to post a follow-up blog to share our learnings. If there’s any data in particular that would be helpful to you, please let me know and we’d be happy to share.

  • Dear Chase,

    Thank you so much.  Highly appreciate your reply!  Many thanks! For the mean time, we have a facebook group to document campaign, at https://www.facebook.com/groups/southernleyteaction2020/.

    We’re still at the very 1st stage of setting a common goal and slowly gathering local partners.  Last Wednesday, July 8, we’ve conveyed concept with local church and very happy to align goals with local Diocese and Edmund Rice Ministries Foundation.  Elated to finally receive comments regarding concept.

    Thank you again Chase.  We really need advice to guide us as we try to implement cross sector approach.  Hoping you’ll find time to visit our forum page https://www.facebook.com/groups/southernleyteaction2020/

    Please do share some messages and inspire us more Chase. Once again, thank you so much for sharing your time.  We are so happy to hear from you.

    Pleasant greeting from the Philippines,  have a great weekend too.

  • BY Chase Adam

    ON July 13, 2015 02:55 PM

    I just joined your group, Nelson. Excited for updates!

  • Elena Gaffurini's avatar

    BY Elena Gaffurini

    ON July 14, 2015 06:21 AM

    Great insights.
    I will follow the advice and adopt the “funding rounds” approach to scale my social enterprise in Mozambique.

    Any experience in fundraising directly in developing countries?
    I would like to involve corporate sector in the country, in addition to international donors there. I believe establishing strategic relations (based on funding and strategic partnership) would add value to market the product itself.

    Any insights?

  • Michelle Moskowitz Brown's avatar

    BY Michelle Moskowitz Brown

    ON July 14, 2015 12:09 PM

    Great concept. Out of the 138 meetings, how many were visits with the same donor. I ask because if they were each unique visits, the rate of fundraising return is 10%, with median gift of $85k. I’m trying to understand how many people said no, or not now and whether you had a minimum ask for these particular donors. Thanks for sharing the concept!

  • BY Chase Adam

    ON July 14, 2015 01:08 PM

    Hi Michelle—No minimum ask, we weren’t very professional fundraisers to be honest (actually, we were absolutely terrible at the start). I’d have to scrape my schedule again to be sure, but IIRC we averaged about 2 meetings per donor. That means we spoke with approximately 70 people resulting in a 20% conversion rate. Hope that helps!

  • BY Chase Adam

    ON July 14, 2015 01:14 PM

    Hi Elena—We have a bit of a unique fundraising model. We raise rounds for our operations (team, office, etc.) and we fundraise online for patients’ healthcare. The round fundraising happens mostly in person and we don’t have any experience fundraising in developing countries. However, about 1/3 of our online donations to patients are from outside the US, and a chunk of that is from developing countries. Press, word of mouth, and being able to support patients in ones own country / region have been the main drivers there. Corporate seems like a great strategy, since most companies aim to support the communities where their employees and customers live. Sorry we can’t be more helpful here but we’re still trying to figure this out too!

  • Hi Chase! Thank you for sharing your experiences.
    You answer for Laura: “...We’re raising our second round now and we’ll likely raise our third (and hopefully final) round in two years.”
    How you are planned to be financed after “third (and hopefully final) round”?

  • Chase this is another great article by you. So far I have read everything written by you. Congrats

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