Leverage the Passion of the Founders As social entrepreneurs who founded the organization, we were our greatest fundraising asset. Everyone wanted to hear directly from us: our vision, what we had accomplished so far, and what high mountain we planned to tackle next. We worked hard to inspire everyone we met to invest. In this phase, fundraising and networking should take at least 50% of the founding team’s time to obtain the kind of breakthrough funding required to fuel a start-up.

Engage Your Personal Networks We found it important to become comfortable with tapping into our personal and professional networks and asking for money. People invest in people, not necessarily causes, in the early years of an organization. It is necessary to find ways to approach one’s friends, family, old colleagues, school and professional association alumni networks, and so on. We honed our pitch with any audience that would host us and then kept widening the circles. And we had to remember not to just tell our story but to be sure to close with an “ask” for them to invest in Room to Read. The number one mistake made in fundraising is that people don’t directly ask for contributions.

Focus on Fewer Types of Funding One of the best things we did during this phase was not to spread ourselves too thinly by going after many different funding sources. Like other aspects of Room to Read, we focused on where our potential for impact was greatest. Most organizations in their first year or two find a type of funding that is most closely associated with their mission and organizational approach. At Room to Read, we broadly define the types of funding sources as individual investors, corporate investors, foundations, and government/institutional investors. Each source requires a different way of soliciting, engaging, and reporting. Even the “individual investor” category can be broken into subcategories of major gifts or smaller annual fund investors. Early on, we developed a strong skill set in soliciting individual major gifts greater than $10,000. As a thinly staffed start-up, it is stressful to go after too many types of funding streams simultaneously, as the organization doesn’t have capacity to steward them all well. We found our sweet spot: On average, in our first decade, 70% of Room to Read funding was from individuals.

Have a Clear Plan It was essential to have a well-thought-out theory of change accompanied by a business plan. Investors want to understand the intended impact an organization is striving to achieve and how that impact will be measured. They also want to understand the business plan for how you will grow the organization to maximize the impact over time. A road map for scale is thus essential. One of the things that Room to Read did well was to create a simple, compelling, well-articulated pitch for what we were doing, why it mattered, and how to measure our progress and success. We stuck to our initial model of establishing school libraries and keeping more girls in school in low-income countries long enough to build a large and enthusiastic base of supporters.

Underpromise and Overdeliver This has always been a key rule at Room to Read. As we set goals—programs, organizational growth, financial projections, and so on—we tried to be realistic yet ambitious. Pie-in-the-sky goals without a clear ability to achieve them can lead to disappointed investors. Likewise, slow progress doesn’t inspire a movement to gather behind your cause. Bold goals attract bold people, as we often say at Room to Read. The trick is to be bold and realistic at the same time so the organization can inspire and deliver at the same time.

Connect Investors to the Impact We created an “adopt-a-project” model in which investors could directly support programmatic work in a country of their choice. This was the hallmark of our success raising support for our work in our early years. We realized we needed to find a way to connect our investors personally with the results of their contributions and to do a good job reporting those results. When investors supported a school library or the construction of a school block, we sent them, within the year, at least one written report on their project—the specific school or library, with pictures and some details of the change that their investment made possible. Videos, stories from beneficiaries, site visits, and events (if engaging individual investors) are also good ways to connect people to the work they are supporting. All investors want to know that their dollars are being spent successfully. The second biggest mistake in fundraising, after not making the ask, is to not report back to investors often or adequately.

Leverage the Power of Volunteers One of the best things Room to Read did was leverage the power of volunteers in innovative ways. Early in our history, we started a volunteer chapter model. Given our work overseas and our desire was to engage local communities, we did not need volunteers to help directly in implementing our programs. However, we did need to create a global movement behind Room to Read’s work to build public awareness and get sufficient financial support. We encouraged chapters to form in different cities, to hold events and outreach activities, and to essentially be our “feet on the street” to build a network of supporters. In our first decade, our chapters collectively raised about a third of our annual operating budget.

Connect with Your Peer Group Room to Read was also lucky to tap into the social entrepreneur funding networks. In an organization’s beginning years, it is beneficial to apply for support from foundations that seek to build a network for social entrepreneurs. More recently, there are several great ones, such as Ashoka, the Draper Richards Kaplan Foundation, Echoing Green, New Profit, the Skoll Foundation, the Schwab Foundation for Social Entrepreneurship, and others. We gained valuable, unrestricted funding, skill-building opportunities, credibility, and introductions to attract other funders, as well as a network of like-minded peers going through similar growth pains as us. Our first large investor was the Draper Richards Kaplan Foundation (DRKF). Room to Read was the second organization it funded using a venture philanthropy model of giving $100,000-a-year unrestricted grants for three years as well as joining our board of directors. It absolutely changed the trajectory of Room to Read to be a DRKF-selected social enterprise organization and to have its support and network help us grow and thrive.

Focus on Retaining Investors During our high-growth years, we did not at first focus on keeping our current investors engaged as much as we did on finding new ones. Fundraising is a long game. You must look at every opportunity to keep people engaged in the cause and develop a solid partnership. Often at Room to Read we focused on bringing in new investors through events and outreach, but we didn’t spend as much time ensuring we were keeping our current investors informed about our progress.

Later, as we continued to grow, we did start to place a higher priority on retaining investors. We had a loyal and generous base of annual investors, and we focused on reporting back to them on the impact of their investments. This also gave us a key opportunity to discuss with them whether they would like to renew their gift for the coming year, or, hopefully, even increase it. We learned it is much more efficient to continue to energize your existing support base than constantly seek out new supporters.

Diversify Geographically This was key to our growth and spreading revenue risk in any given year. We diversified globally, largely due to our chapter network’s organic growth. When raising money internationally, we learned firsthand there are many cultural differences in fundraising. We have found it important to hire staff locally to help navigate this. We have been in investor meetings in Europe where you never really ask for a gift directly, so “the ask” is done in a much subtler way when following up after a meeting. Of course, Erin was also in a meeting in Hong Kong, where business is conducted quite rapidly, when an investor wrote us a $10,000 check to end the meeting early because he joked he could make more money to give to us if he were trading rather than sitting in a meeting.

Keep Communication Crisp and Clear At times, we let complexity overtake our core salient messages. As many organizations grow, their story becomes more difficult to explain, but investors have limited time and want to understand the strategy as quickly as possible. Investors expect social entrepreneurs to be able to clearly and succinctly articulate their theories of change, business models, and pathways to scale and impact. We led with what we wanted to accomplish—the big, hairy, audacious goal, as Jim Collins says. And we always also tried to understand investors’ desired outcomes and how we could partner to help achieve their goals. The trick is doing this in short meetings and within a few succinct pages of a proposal. Most funding decisions are made by teams that include families, foundation staff, and corporate executives. This means that we must provide investors with compelling information that they can use to do internal sales jobs within their own structures. Providing them with crisp and clear proposals allows them to help make your case. At Room to Read we did not always do this well. We often talked at people, rather than with them. We told them why they should care and invest in us rather than listening for what motivated them to give.

Don’t Succumb to Program Creep On the positive side, we didn’t stray too far from our core programs during this growth phase. Often organizations feel they have to be all things to all people to unlock funding. But we have found the exact opposite to be true at Room to Read. What investors like about us is that we are clear about what we do and what we don’t do. We are obsessively focused on excellence in our program areas. To be world class in a few key areas takes great effort. To be mediocre in various ways is a lot easier.

Many nonprofits fault investors when they fall into this trap of mediocrity with a story of “The donor asked us to do such and such,” or, “We were offered so much funding to do an extension of our program that we just couldn’t say no.” The reality is one must say no to funding opportunities to be best-in-class in one’s field. And the best way to increase one’s funding base is to be exactly that: best-in-class in one’s field. We worked hard not to veer from our strategy. The cost was too great to our efficiency and effectiveness.

Organizations are made up of people. In the typical nonprofit, you never have enough talented people to do all the things that need to get done. Room to Read is certainly one of the most fast-paced and dynamic places that most of our team has ever experienced. People come to us and want us to do all sorts of requests for “small” extensions to our programs. Can you help us vaccinate children? What about nutrition programs or solar energy at the schools? Can we extend your literacy work to teach adult women? And so on. The answer to whether these are all great, viable ideas in the abstract is probably, “Hell yes!” The answer, however, to whether Room to Read is the best organization to take on the initiative is generally no. It doesn’t feel good to say no, but say it on occasion we must if we want to have any hope of achieving excellence at improving literacy and gender equality in education for children.

Use a One-to-One Fundraising Model Our adopt-a-project fundraising model worked well for Room to Read in these high-growth years. This allows major investors to invest in the organization at a relatively high level, for example $20,000 to $50,000, and see very clearly the school literacy project they are directly supporting, even commemorating their investment with a dedication plaque. They receive a personalized report with the specific name of the school, number of teachers and children impacted, an outline of what materials and training were provided by the organization, and, if they choose, they can even travel and see firsthand the impact of their investment.

The challenge with this model is that we trained our investors to only give at that certain level. Because they were so satisfied with the impact of their investments, we had a hard time upgrading their giving levels year over year. We now have gotten better at providing a vision for larger, transformational gifts in the six-figure annual level for those investors who want to help us with bigger goals. For example, they might fund us expanding into a new geography, or support an important organizational development initiative like a new information technology project to streamline operations or a human resource project that provides customized supervisory training programs for our worldwide staff members. We want our investors to see that at higher levels of investment they can support even broader activities and drive even greater impact.

Hire People Who Are Great at Building Relationships and Trust Giving away money is a very personal decision. We did not hire professional fundraisers as much as people we thought had passion for our mission and desire to inspire others about our cause. Many investors are stressed out with work and life, and we wanted interacting with Room to Read around their philanthropy to be their happy place! We also sought people whom we thought would connect well with our investor base. Can you picture your fundraisers in the office with your investors or socializing in their homes? If you got stuck on a long bus ride with them, would you have a good conversation?

Hire People Who Are Disciplined by Nature and Skilled at Follow-Up Fundraising requires developing a stewardship plan for each investor and running that playbook well and consistently over time.

Give Time to Be Fully Functional When a new fundraiser is hired, we find it takes them time to get to know the portfolio of investors and build a pipeline of new investors. We do not expect to see major additional revenue coming from a new fundraiser for at least 12 months.

Leadership We have learned the hard way that one of the most difficult positions to fill is the head of your development team. Our most successful chief development officers have been promoted from within after proving themselves superior fundraisers when part of the team.

Once a development team is on board, it is important to empower them to manage investors. We call our fundraisers “relationship managers,” or RMs for short, because they are the primary architects and drivers for all interactions with the investors with whom they work. We explicitly discuss how they are the main point of contact for their investors as well as the rules of engagement for how they plan to partner with other executives, board members, and staff members to help steward and inspire those investors. Too many people interacting with investors in an unmanaged way can be confusing. But if you can execute a well-planned journey based on investor interests and facilitated by the RM, it will generally end with the investor giving at their maximum potential and developing a trusted relationship with the organization and its people.

We also found it necessary to have a clear system of how to hold RMs accountable. We would define their revenue goals, specify the number of investors they needed to engage, describe the new investor pipeline they needed to build, and articulate the upgrades in giving we sought with current investors. Plus, an RM should always know where investors are in the journey and what the next action should be. Does the investor need a report on how an investment has been spent or a deeper dive on a special topic of interest? Would a site visit be worthwhile or time for the next ask? We set up systems that tracked investor journeys so there is visibility, transparency, and predictability that taken altogether drives accountability.

As you start to hire more staff members to focus on fundraising, the founding team must create space for these fundraisers to manage investor relationships so RMs are not seen as glorified support staff for executives. This does not mean the founding team or key executives don’t have an important role in interacting with investors. They absolutely do. But we found that keeping up with our growing investor base required our fundraisers to be the main relationship managers. They needed to develop and drive a clear plan for how the rest of the organization (including founders) should be involved in engaging, inspiring, soliciting, and thanking investors so that all aspects of the relationships are aligned and coordinated.

At Room to Read, we were often too slow at doing this. The founders became bottlenecks to many relationships. The result was that as our investor base grew rapidly, we had too many relationships to manage well, and the development team staff wasn’t empowered enough to take the lead. Investors started to fall through the cracks, which is the worst thing that can happen.

Although development staff members need to build their own credibility with their own portfolios of investors, they also need to realize that it can be hard for the founding team to let go. Founders have worked incredibly hard to build a base of support and care deeply about many of these relationships. After all, many of these investors gave money to the organization because they believed in and trusted in the leaders at the outset.

Diversification of Type of Revenue One of our biggest mistakes earlier in our growth was not diversifying our portfolio of investors so we were not overly dependent on one type, geography, typical gift size, or industry for funding. In our first decade, we found our niche market of major-gift individual fundraising largely tied to the financial sector and went hard and fast at it. When the financial sector encountered challenges in 2008—which led to restructuring of corporate giving as well as reducing salary and bonuses for several years afterward—we felt the pain as well in terms of our ability to raise funds. We picked the type of funding most like our sweet spot to leverage our existing network. For example, we asked individual investors to introduce us to their companies’ foundations. We also started an annual fund program (defined as investors who gave less than $5,000 annually) in which people can introduce others in their networks who can give at lower levels. We now have many more investors, individual and corporate, in the technology industry, retail, beauty products, luxury goods, travel, entertainment, and so on.

Brand Building We focus even more on communicating and building a world-class brand. We spend more time and energy now on thought-leadership activities, public speaking, blogging, and social media to build toward a recognizable, household brand name. Our aim is to be a trusted leader in international education. This focus on raising our profile has inspired our investors to increase their levels of support as well as attract new investors. We have been fortunate to win many awards over the years as well, which has helped provide cachet and credentials that validate our model.

Identify Ambassadors We work to identify people in our organization and broader network who can be great ambassadors for Room to Read. These ambassadors are our “fund whisperers,” or people who can inspire other funders with great stories of how our organization is having impact. There is nothing more important in fundraising than a robust network. We have created regional development boards, for example, of some of our most committed and significant investors in Europe, Asia, Australia, and the United States to build a sense of community and commitment to Room to Read.

Technology Investments We are investing more in technology than ever before. Technology has revolutionized fundraising. Online giving has grown double digits every year for several years now. Crowdfunding and peer-to-peer fundraising are standard models that most organizations employ. We have invested a lot more heavily in technology to support our global fundraising and investor communications at this stage.

Tailor Your Interactions for the Investor We have started to segment our different types of investors into categories defined by what motivates them to give to our organization so we can tailor our interactions and communications while also building scalable systems. We have broad categories of the key motivators for our investor base, such as people who are motivated by social change, or public leadership and recognition within one’s peer group, or family philanthropic activity. This allows us to continue to take investors on a journey with the organization as we discussed previously based on their interests, but also allows the organization to chart out certain common journeys for our investor base.

Evolve Reporting We have also found that we needed to be prepared for savvier investors. As our investor base grew, we met more investors with a deeper knowledge of our content space. Particularly with foundations and institutional funders, there is a certain “technocratization” in which investments are made by people with deep technical knowledge in a field. They tend to focus on impacts and theories of change and desire volumes of data and details. It can be challenging for an entrepreneurial social enterprise organization to supply all the information being requested. It requires more sophisticated and formal reporting systems to be put into place. As philanthropy has become much more systematized, our start-up entrepreneurial organizational culture has had to adapt to this.

Approach Every Investor with Respect Investors are busy people with many competing priorities. They often have different stakeholders to engage with, and response times can sometimes be slower than you desire. The difference between sales and fundraising from individuals is that securing an investment quickly doesn’t generally lead to the best investment. The first “get to know you” meeting is often not the right time to bring up making a financial contribution, as you might just get the polite, small gift in which an investor gives the minimum instead of the maximum, or, worst case, the potential investor feels you have rushed them and your organization is not a good fit.

Learn as Much as We Can In the first few meetings, we try to talk less and listen more. Are investors motivated by a commitment to social change (in education, healthcare, alleviating poverty)? Or by finding organizations that can scale? Do they have a geographic focus, such as Southeast Asia? Do they want their whole family to be involved in the philanthropic decisions? Do they have a family connection to India, or did they hear about us from a friend they trust? Or, for corporations, are employee engagement opportunities and media exposure key opportunities they are seeking? The list goes on. What motivates the person’s giving is fundamental information for fundraising. Good fundraisers ask a lot of questions and build strong relationships with their investors such that they learn the answers to what matters most to them.

Be Prepared to Answer a Lot of Investors’ Questions, Too Every funder usually asks the following in some form, so be prepared to answer questions such as, “Where do you want to go? What are your big goals?” “What are your biggest challenges and barriers?” “What do you want to accomplish next?” “How can we help you get there?”

“No” Should Never Be Taken as an Absolute End of the Conversation We always like to think of a “Sorry, we can’t fund you” at Room to Read as a “Sorry, we can’t fund you YET…” with a crack in the door always open for possible funding or an introduction to another investor later.

Finding the Right Level of Communication It is important to not undercommunicate or overcommunicate, so we always ask what amount of communication each investor prefers.

Trust and Transparency Many of our investors have told us that what they appreciate the most about interacting with us is how transparent and candid we are. We will share what is not working and what our challenges are. Whenever we share bad news, we share what we have learned from the situation and what we are going to do to fix it. One of our proudest moments, oddly enough, was when a few former employees misappropriated several thousand dollars in our Africa operations. We could have kept quiet and absorbed the loss, as all program deliverables were still achievable. However, instead, we decided to personally call each major investor to our Africa operations at the time and explain the situation as well as the new financial controls we were putting into place to prevent this from happening again. We did not lose a single investor, and, in fact, many said they had a greater respect for the operational challenges we face.

Fundraising from Foundations and Corporations Can be Different Beasts Altogether than Fundraising with Individuals Every foundation or corporation has a different history for why it was established and rationale for what change it desires to support. Some operate off tight guidelines; others are more fluid. A program officer at a corporation or foundation, in any case, is that organization’s advocate. That person often has many constituencies to please. It is important to become familiar with the strategy of the foundation and analyze how your work can fit into that strategy best. Program officers want to be good partners. Foundations can be slow to change their priorities or approach. They are driven by the founding family, their history, and goals under which they were set up. It is more common now for foundations to reject unsolicited proposals, so building a network with staff members who work in corporations and foundations is a key part of the job of any nonprofit leader or fundraiser.