Editor’s Note: Sara Leonard is engaged with Margin & Mission Ignition (MMI) and helps MMI organizations raise investment capital.
Successful social enterprise requires capital investment. I am honored to work with the organizations participating in The Patterson Foundation’s Margin & Mission Ignition initiative. My role is to support their capital investment fundraising efforts. Social enterprise business planning is hard work and not coincidentally, raising the capital can be hard work, too. Once the business plan is complete, the hard work of implementation begins. At this critical moment, organizations can be tempted to move on full speed ahead without thinking about their donor investors.
Warning: this is a terrible idea.
Just like other types of fundraising, capital investment fundraising requires careful stewardship of donors. How should you steward them? I’m glad you asked! There are three major steps: Appreciate, Engage, and Listen.
First, make sure they know they are appreciated. This starts with an accurate, well-crafted thank you letter. Be sure to spell the donor’s name right and use their preferred title. If it’s a business, ensure that the letter is addressed to the right person so it doesn’t get lost.
But don’t stop with the letter from the organization. Look for other ways to say thank you. For instance, if a board member helped secure the gift, ask that board member to write a personal note or send an e-mail directly to the donor. You can’t really thank someone too much.
Providing updates on your capital fundraising efforts is another way to appreciate donors. When you show progress toward your capital investment fundraising, you are reassuring the donor that their investment is being joined by others. For instance, the Margin Mission Ignition organizations had a stated goal and were fundraising to secure matching funds by a deadline. By providing timely updates, early investors got to share in the celebration.
Second, keep them engaged. By the time you raise the gift, you’ve probably had multiple conversations with the donor about your earned-income venture. Don’t go silent at that point. Update them on your business planning and implementation. They want to know that you are still making progress and likely can help in one way or another.
You can also engage donors by asking them to share their expertise. For instance, if they have a marketing background, ask them to review the drafts of your new website. If they are an accountant, ask for their help in creating your new accounting system. Donors like to be valued for more than just the checks they write us. Keep in mind though, only ask for their expertise if you’re willing to listen to their ideas.
When appropriate, invite donors to participate as customers. You could offer a coupon and make it comfortable for them to invite family and friends to join them. If your new enterprise includes a “soft opening,” invite donors to be a part of that. Ask for an honest critique of their experience.
Third, listen. With each of these interactions suggested above, listen to how your investors respond and act accordingly. Some questions to consider:
• Are they investment donors who might want to reinvest? Then keep them in mind if you need additional capital investment or if you embark on another business plan.
• Are they committed to your mission and would be likely to support other parts of your organization? Look for the next big thing that will intrigue them.
• Do they like numbers? Keep them updated on the business plan and the adjustments you are making throughout implementation.
• Are they more interested in the impact on your mission? Send them stories about how the proceeds change and save lives at your organization.
Here’s a bonus tip: as you appreciate, engage and listen – a picture is worth a thousand words. Keep the photos coming. Every communication doesn’t have to be a major design work of art. Spontaneous e-mails with photos attached can be very meaningful. When your donor investors visit you, be sure to snap and share photos. When the proceeds of your enterprise impact your mission, share photos. As an example, the picture above is from The Folk School at Florida Maritime Museum, a Margin & Mission Ignition 2016 organization.
According to research by fundraising expert Penelope Burk, donors (and investors) are most interested in knowing that you put their money to work as they intended. They don’t mind if you made some mistakes along the way as long as you can show that those mistakes were used as learning opportunities. That is reassurance that their money is well spent. Taking the time to steward your social enterprise investors will be time well spent.