Fundraising is a perennial challenge for nonprofit executive directors and CEOs. The typical cycle is: you have a number of projects, you’re very busy, and so fundraising slacks off. Then you wake up at 3:00 a.m. one morning realizing all of the projects you have are sun-setting, so you panic and begin to search for new funders anywhere you can find them- no matter how long the shot. Everything else, including current projects, staff issues, and operations, is set aside to get new funding in the door. Before you know it, you’re back to having so many projects at once that you let your pipeline of funding languish again. As a result, you’re feeling like a hamster on a wheel. Yet there’s an even darker scenario as your projects sunset—you cannot find replacements, and you soon find yourself without revenue and you have to close your doors.
Accordingly, it is very important to keep your funding pipeline moving. Even if you have other staff helping you fundraise, as the leader of your organization, this function always rest heavily on your shoulders. Your organization’s value is tied to your expertise, reputation, and wisdom.
This is why it is crucial to always be moving your fund raising pipeline.
So how do you manage this?
Over the years I’ve used a number of methods, but the one that I found consistently useful is what I call the ‘Pemberton Method’ after Dr. Don Pemberton, former Director of the University of Florida’s Lastinger Center for Learning. Don is one of the best fundraisers I know. He introduced me to his method and converted me into an evangelist of it. In a scant twelve years, Don was able to take an operation that consisted of himself and an assistant and move it into a global education innovation hub with a portfolio of over $24 million in projects. He has been so successful because he understands what his clients need, can deliver effective solutions, and always keeps his eye on moving fundraising forward.
HERE IS HOW YOU CAN APPLY THE PEMBERTON METHOD TO KEEP YOUR ORGANIZATION’S fundraising PIPELINE HEALTHY.
With the Pemberton Method, you take each of your leads and add the organization it is with, your prospective customer at the organization, the last step you took, and the next step you need to take, with due date, who has the action on your team, and an estimate of the total amount that can be raised.
STEP 1: ASSIGN A STAGE
You can use any of that you want, but I usually recommend five stages for fundraising:
- Prospect - you have a funder who has an interest in your organization, geography, and/or programs.
- Project design and conversations- you are actively talking with the funder about pursuing a project together or a developing a proposal or RFP response.
- Proposal submitted - you have a proposal into the funder for consideration.
- Oral agreement - the funder has told you they are going to fund you (but, at this point, there's nothing in writing so sometimes things fall through).
- Win/loss - you have the funding in hand or a writen award or you have been declined.
You also need to assign a weight for each of the categories that reflects your data on the chance of closing the ask from that point forward. This will help to value your pipeline (we'll get to that in a minute).
For example, let's say that you land about 1 out of every 10 prospects you start to pursue. That would mean the value for the "prospect" stage would be 10% (since you land 10% of the funders you identify). Similarly, let's say that by the time you have a proposal in with a given funder you land most of them, therefore, you may assgin this category a weight of 70%.
When in doubt, I suggest clients use the following weights that I have found are a good starting point.
- Prospect: 10 percent
- Project design and conversations: 25 percent
- Proposal submitted: 70 percent
- Oral agreement: 90 percent
- Win: 100 percent
STEP 2: ADD WEIGHTS TO LEAD VALUES
The weights adjust the estimated sale value. For example, in the case of a $5 million project, you would put at the end of the lead $500,000 (i.e., 10 percent of $5 million). The result is that you have a more realistic view of your pipeline value since it is a function of not only what you are asking for (in this case the $5 million) but also your probability of success (that is, 10%).
You can quickly have an idea if you are on track to cover costs or need to generate more prospects. You’ll see many methods for managing your a pipeline, but one of the things I really like about the Pemberton Method is that I’ve seen these weights work again and again at effectively estimating how much work you will have.
Without them, I’ve found organizations overestimate the value of their pipeline, since there is no reduction of value because of the stage it is in. Their mistake is that a $5 million deal that is a lead and a long shot is treated the same as the $10,000 project in proposal stage. I’ve found that the result of having just total numbers is complacency, and ultimately a slacking off on fundraising. Why not? You have more than $5 million in funding coming!
More importantly, you have a simple system for seeing where you need to apply your time and how you need to move the various leads in the process. You’ll find that, for most of you, this is far easier to manage and use than other more complex sales systems, like HubSpot or SalesForce.
Here’s an example of how the Pemberton Method can look.
|HR Puffenstuff Foundation||Intro call last week||Send examples of our impact and evaluation data by Friday.||
|B. Keeshan Kangaroo Community Foundation||Sent proposal yesterday||Circle back in three weeks to see if a decision has been made.||
Proposal Submitted (70%)
|M Freeman Institute for Easy Reading||Received oral approval today||Develop a MOU.||
Oral Approval (90%)
In this case, you have three prospects. Your largest opportunity is still a lead, so you only count 10 percent of the value (i.e., $5,000). Your other two prospects are much further along in the fundraising process, so they have a higher value (i.e., $17,500 and $30,600, respectively). Based on the Pemberton Method, you can plan a pipeline value of $53,100.
You’ll find that over time you’ll learn more about your pipeline dynamics, Accordingly, you will want to adjust your system based on your experiences as you have a sharper and sharper picture of pipeline value and what needs to happen so that prospects become funders.