Today there are essentially two ways that opportunities for new partnerships are formed: 1. relationship process, and 2. diligence process. A relationship process depends upon, you guessed it, the relationship that exists prior to an opportunity forming and uses trust as the motivating factor. A diligence process, depends upon a set of criteria that are used to evaluate a range of potential partners for an opportunity that the funder has already identified. Most relationship processes include diligence, and most diligence processes involve some sort of relationship. The best thing that you can do is prepare for both.
The fact is that while trust-based philanthropy grows as an approach used by more organizations, the process of due diligence is not going away. It’s key to know what to consider when forming a new opportunity – whether that is a new program, a new investment, or an existing project. Here are some suggestions on what you should prepare before seeking a new opportunity from a partner:
- Alignment with the partner’s priorities: Perhaps the most important factor to consider. If the project does not align with the partner’s values and goals, the chances of securing funding are eliminated unless there is a strong relationship present. If a nonprofit organization focused on animal welfare approaches a funder with a project proposal for improving access to education in low-income communities, it is unlikely to be successful. Likewise, if a funder opens a new program stream for environmental programming but shares it only with its network of education-focused charities, it is unlikely to have a strong match, or worse… tempt an organization to abandon its strategy to pursue funding because of financial pressure. It is essential to thoroughly research the partner’s history and past partnerships to ensure that the proposed project aligns with their priorities.
- Potential impact of the project: Funders want to know that their investment will make a meaningful difference. It is therefore important to clearly communicate the specific outcomes and impact that the project is intended to achieve. For example, if a nonprofit is proposing a project to improve access to clean water in a particular community, it might be helpful to provide data on the current state of the water supply and the expected health and economic benefits of the project.
- Sustainability of the project: In addition to short-term impact, funders also want to know that their investment will be able to continue to make a difference in the long-term. This might involve demonstrating a plan for long-term funding or identifying potential partnerships that could help to sustain the project. For example, a nonprofit organization that is proposing a project to improve access to mental health services in a particular community might consider seeking partnerships with local hospitals or other healthcare providers to ensure that the project can be sustained beyond the initial funding period.
- Budget and cost-effectiveness of the project: Funders will want to know that the proposed project represents the best use of their resources. It is therefore important to be transparent about the costs involved and to provide a detailed budget that clearly explains how the funds will be used. For example, a nonprofit organization that is proposing a project to provide job training and employment opportunities in a particular community might consider including data on the projected return on investment for the project.
- Track record: Funders want to know that their investment will be in good hands and that the nonprofit has a history of successfully implementing projects and achieving results. It is therefore important to be able to demonstrate the organization’s experience and expertise in the area of the proposed project. For example, a nonprofit organization that is proposing a project to provide healthcare services in a particular community might consider highlighting previous projects that it has successfully implemented in similar contexts.
- Team and leadership involved in the project: Funders will want to know that the project is being led by a strong and capable team with the necessary skills and experience to successfully implement the project. It is therefore important to highlight the qualifications and experience of the team members who will be responsible for leading the project.
- Potential for scalability and replication of the project: Funders may be interested in supporting projects that have the potential to be replicated in other locations or adapted for different populations. It is therefore important to consider how the project might be scaled up or adapted to meet the needs of other communities.
- Level of engagement and collaboration with relevant stakeholders: Funders often value projects that involve partnerships and collaboration with other organizations, communities, and stakeholders. It is therefore important to demonstrate a plan for involving these groups in the project and to show how their input and expertise will be incorporated into the project design and implementation.
As the winds of change sweep through the world of grantmaking and nonprofit programs thanks to the leadership of movements like Trust-Based Philanthropy, funders and nonprofits must constantly evaluate their portfolios and seek out new opportunities for collaboration. But before embarking on a new venture, it is crucial for all sides to carefully consider their shared values and goals, as well as the resources and capacity required to bring the initiative to fruition. Without this, misunderstanding and misalignment of outcomes will turn a good idea into a living nightmare. Funders and nonprofits alike benefit when they take the time to empathize with the goals and motivations of their potential partner, allowing you to marry those goals to your idea and get the opportunity started.
If you’ve done this work and you’re ready for what comes next. Check out our articles on the Art of Discovery and Before the Intro to learn about how to start a relationship with a prospective partner.