One of my passions is to shift how nonprofit organizations talk about the money they must raise every year. In my workshops and webinars I always make a point to share examples of CEOs and Development Directors who are so good at talking about their funding gap they receive checks and online contributions that are larger than usual and often arrive without even making an "ask."
I define the funding gap as the difference between your total expenses minus what you have raised to date…not pledges or pending grants…but what is in the door and already working to serve your community.
Often when I introduce the "funding gap" concept and stories of others who have shared theirs, people get excited and start to use the language right away – which is great, but often it can be scary for those who are not clear about what a funding gap is.
Here is a question I received last week from Davonna who is working hard to change the communication culture at her organization:
I attended a webinar at CharityHowTo where you talked about the funding gap for an organization and that you should use that language and tell folks about your funding gap to help raise $$ for your organization. So . . . I've been doing that. I tell stories each week about the impact of our work and I have the statistics that show the need in our community. And I let people know we have a funding gap of $373,000. I just heard from a friend of mine that he thought that gap was just too much and that it put off donors. He said he would only be able to give a little bit and that wouldn't make a dent in a gap that large. So, I'm wondering about this. Is there a funding gap that is "too big"? How do I honestly reflect this gap without scaring donors? Thanks in advance for your help.
In my follow up conversation with Davonna here is what I shared with her:
Sharing your "funding gap" is key to raise more dollars from individuals, BUT you’ll need to bring people along in understanding that your nonprofit organization has always had one.
And it’s important to share the large number so we can see the full "gap" that needs to be filled, but it is equally important to share examples of how real people’s lives are changed with smaller dollar amounts. For example it takes $47 a month to help Janice learn the skills she needs to pass her GED test. Or it takes about $250 to provide hands-on weekend trainings for more than 500 youth leaders.
Letting the board or new or prospective donors "in" on the real numbers – both the bigger numbers and the bite-size pieces can help your community understand there is always more to do and you do it with an incredible return on the investment of their financial gifts.
The reality is that every nonprofit organization has a funding gap every day from the first day of their fiscal year to the moment when they close the gap – either at the end of the year or sometime earlier in their year. Most board members are surprised to hear this, even though they have seen that very gap in the financials they review at every board meeting.
It is NOT a measure of a badly run organization to share your funding gap. It’s authentic communication about the reality of running your business. The key: share it often and share stories of lives that are changed because you continue to reduce that gap every day.
Good luck, Devonna!