An additional 600,000 people became millionaires last year according to the World Wealth Report issued by Merrill Lynch and Capgemini U.S. The number of rich folks isn’t shrinking even with all the talk of doomed credit markets and rising oil prices.  What does this trend mean for your fundraising?

There are at least three new ways of thinking that we can take from this news.

1.  Think abundance

Yes, we are all having more difficulty securing big gifts this year. But the well has not dried up. More than 10 million people have a net worth of $1 million plus. That’s a pretty big pond. Keep fishing. All indicators point toward increasing dollars out there for the wise non-profit staffer to secure.

2.  Think globally

While the U.S. does have one third of all the world’s millionaires, India, China and Brazil saw double digit growth in this elite bunch. With the U.S. dollar sinking ever lower on the power scale, some foreign investment wouldn’t be a bad thing for your organization.  Take some cues from presidential candidates Barak Obama and John McCain, they’ve both made trips overseas with the express intent of raising money. Building a global base of support deepens your pool. Start networking internationally today.

3.  Think like an investor

High net worth individuals are earning their money by investing. They want to do deals and make connections that are beneficial. Investors are typically less risk averse – startups and untried programs may be exciting to them when they turn off foundations or your general file. Get to the point quickly. If you can’t boil your finances to a page and your needs to a page; keep working until you can. It might be helpful to take a look at a stock prospectus to a get a sense for the language and indicators an investor finds important.

Major donors are still people. They just happen to be very good at making money. Don’t fault them for that by treating them like a cash machine. They still want to know you and your mission. High net worth individuals still have fears and dreams that you’ll likely find very interesting if you listen. Take time to get to know some people in this elite group – not for the sake of increasing your bottom line, but for the simple joy of building relationships with fascinating people. Remember, there is more to fundraising than money.

Though giving from U.S. foundations was up in 2007, the investment market isn’t looking pretty for anybody. We can expect that numbers for 2008 will be quite different. Foundations effected by declining investment markets are likely to give less and you may be on the other end of some letters declining funding this year.

So what next?

Foundations decline proposals for many reasons. As a member of a foundation board myself, I know that deciding not to fund something is often more difficult than grantmaking. While there are many reasons foundations decline, for the sake of time let’s just focus on what to do next.

First, finding out the reason for the decline should make the list of top priorities. A simple call to follow up is usually all that’s needed. It sounds easy, but I’ll bet most of you haven’t thought of doing it. It’s sad, but many non-profit fundraisers just get so busy that following up on a decline for funding gets put on the long list to-do-later. Don’t! Do it now.

When I talk to a foundation representative about a decline, I want to know if they can help me understand the shortcomings of my proposal. If I’m the grant writer I usually have to swallow my pride and need to feel vindicated (translation: I keep my mouth shut and receive feedback). Don’t fire your grant writer the first time you get a negative critique. It is impossible to have 100 percent success. Likewise, don’t internalize any feedback about your program – foundation staffers aren’t rejecting you when they decline a proposal.

Here are some questions to help you get through this potentially difficult call:

• “Did the program seem to fit your foundation’s interest?”
• “Was there an emphasis in the proposal that missed the mark or was it something else?”
• “How did our outcomes come across?”

Finally, ask a foundation if you should reapply. Based on the conversation, you should have some idea about where things went wrong. I like to end my questioning by simply asking, “Should we consider reapplying next year?”

This is a really important question. It gives the grantmaker a way to tell you, gracefully, if you stand a chance based on what she knows about your organization and her foundation. It also will give you some renewed hope about your grants efforts.

If a foundation staff person says, “No, I don’t think so.” Accept it gracefully knowing that you can mark them off the list and move on to spend your time some other way that will generate revenue. It’s all part of the process.

Let’s assume all has gone well and you know that you’ll submit another proposal at the appropriate grant cycle. I don’t want you stop now. You are almost home! Send a follow note of thanks.

I know it’s talked about like a magic bullet – but building relationship is very critical to keeping your grants program active and successful. A quick note saying, “Thanks for taking time to talk with me about our proposal. It really helped me understand your interests better.”

Now, add them to your grants calendar (more on that in future articles) to ensure you remember to call again closer to the application deadline. You’ve discovered how to write a better proposal, built the relationship and are ready to resubmit. You are on your way to funding!

This article is part of the Fundraising in Challenging Economic Times series.

Here’s a list of each of the articles in this series:

1. Recession Proof Fundraising by Anisha Robinson Keeys
2. 3 Suggestions for Raising Money in Tough Economic Times by Jim Berigan
3. When Foundations Say “No” by Aaron Atwood
4. Succeed at Fundraising Despite a Recession by Marc Pitman

When non-profit directors or development staff comes to me looking for help in the world of foundations, the first thing I usually have to do is dispel the most common myths surrounding foundation funding.

Myth #1: Foundation funding is easy.
Myth #2: Foundations are anxious to give money to organizations like mine.
Myth #3: Foundations just require a good grant proposal.

While each of these myths has some basis in reality, none are the whole story.

Myth 1: Foundation Funding is easy.

“Competition is a sin,” said John D. Rockefeller.
“Competition is good and has served us well,” Judge Harold Greene said.

Whichever way you look at it, finding foundation funding is competitive. According to the National Center for Charitable Statistics, there are nearly 1.5 million non-profits in the U.S. Like it or not, many of those organizations are seeking the same funding you are. Setting your organization apart in this pool of worthy causes is critical.

Ask yourself, “Why us, why now,” when considering how to make your non-profit stand out from the crowd. Do you have a track record of success? Perhaps you’ve accomplished amazing results in a very short time. Ask your clients and donors why they choose you to find answers if you are really stumped.

Myth 2: Foundations are anxious to give money to organizations like mine.

That may be true, but don’t make assumptions. Most foundations were started with a specific purpose in mind. They give to causes across the spectrum like human services, arts, community development and hundreds of other areas of interest. With the volume of requests growing rapidly, foundations may be more particular than you think.

Nearly every foundation I know gets approximately 10 times more requests than they can actually fund in a year. Many of those requests are form letters or template proposals. The writers have never bothered to research more than the foundation’s address.
Think about building relationship with funders – not just foundations but all your donors and potential donors. Then you’ll know which foundations are likely to fund your mission. Knowing is much better than sending blind proposals.

Myth 3: Foundations just require a good grant proposal.

Writing is only a part of finding foundation funding, a minor part at that. Behind the scenes of a successful foundation funding effort is strategic planning, outcomes measurement and many other components that ensure success. Finding a good writer is great for your organization, but a writer won’t bring dollars with them.

Research, reporting and relationship are essential to having a holistic approach to foundation funding. When you consider the entire approach, you give yourself a chance to stand out from the crowd and find good fits for your mission.

Before you begin…

When you start out to find foundation funding, you must be ready to take on some big issues. Have you asked yourself, “How are we measuring success?” Are you ready to be transparent with a donor?

Many foundations will value your forethought and candor when you approach them for the first time. Foundation staff is charged with giving away money in ways that get the best results. When you can say to a donor, “I believe what we do is the best approach,” then you are ready. Substantiate your claim with measurable outcomes, a prudent budget and realistic timeline. These tools allow you to plant seeds of fruitful funding for years to come.

This article is part of the Mythbusters series.

Here’s a list of each of the articles in this series:

1. Fundraising Myth: If You Build It They Will Come by Sandra Sims
2. The Myth of the “Selfless Volunteer” by Tom Welsh
3. Fundraising Myth: It’s Great to Be Cheap by Marc Pitman
4. Advertising and Marketing Are Too Expensive by Jim Berigan
5. The Myth of the Dried Up Well by Sandy Rees
6. Myths About Foundation Funding by Aaron Atwood