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Raising Money to Do Economic Development

Raising Money to Do Economic Development. Thayr Richey, President SDG 6-12-14 IEDA Summer Conference. Every Not-for-Profit Needs Money. Daviess County’s ED Commission is nearing the end of its $1M capital campaign.

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Raising Money to Do Economic Development

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  1. Raising Money to Do Economic Development Thayr Richey, President SDG 6-12-14 IEDA Summer Conference

  2. Every Not-for-Profit Needs Money • Daviess County’s ED Commission is nearing the end of its $1M capital campaign. • The Capital Region EDC will launch a new $3M fundraising campaign this spring to pay for economic development initiatives over the next four years. • Columbus 2020 sets $30M fundraising goal to support economic development.

  3. The Double Whammy • Indiana communities are caught between the loss of tens of thousands of high-paying, unionized manufacturing jobs that used to contribute to social service businesses. • At the same time we’re still struggling to recover from the “Great Recession.”

  4. Not Enough Money for Everyone Your choice: • Economic development or • County ambulance service

  5. In One Normal-Sized Indiana County • Abate • Arts • Homeless • Animal shelters • Sports • Libraries • 4H • Band • Food banks • Shelters for abused women • Churches • Lions • Elks • Optimists • Hospital foundations • Literacy programs • Boys & Girls clubs • Services for seniors There were over 700 N-f-Ps listed

  6. How LEDOs Can Compete

  7. Build on • Your track record • New Opportunities • What similar communities are doing • Fear

  8. A Clear, Simple Plan Is Essential • Phase I • Specify what the funding will pay for (benefits) • Prepare LEDO board and staff for the campaign • Determine income needs • Create the “ask” • Have staff develop materials for the campaign (with professional marketing/PR help if needed) • Ensure that each board member understands his/her role in the process • Identify current and past donors • By donation category • By type of organization • Government • Business • For-profit • Not-for-profit • Individual/Family • Review probability of donation renewal

  9. The Plan - continued • Assign specific board member to each established prospect • Research new prospective donors • Assign specific board member to each prospective donor • Depending on how formal the plan, you might want to create a communications strategy for the plan and have a resource development kickoff meeting • Phase II • Make the “ask” of dependable established donors • For new donors, some LEDOs have small meetings in which the LEDO president gives a brief presentation on the goals and objectives, the competition, and the need for funding • Then or shortly after, the board members make the “ask”

  10. Why Should Board Members Have to Ask for Money • Most people would prefer not to do this The king-asks-kings syndrome • When the LEDO president asks, he/she is often perceived as seeking money to keep a job

  11. How Much Do You Ask for? • For businesses it depends on the size and type: • Gold • Silver • Etc. • Levels of funding can also be tied to donor benefits • For individuals, it depends on their commitment to the long-term vitality of the community • Ask for a three-year commitment • Should you ask basic employers for donations?

  12. Making the Ask • People respond to danger • The danger for your community is that – in an economy that is both making a fundamental shift and highly competitive – the community will lose its economic reason for existence • The solution is your organization’s ability to grow established employers and recruit new ones • These companies employ local businesses’ customers • These companies are the potential employers of your donors’ children and grandchildren

  13. Focus on Tough Competition

  14. Then Sell the Small Benefits For Example: • Gold – has a board membership • Silver – Can attend quarterly and annual meetings • Bronze – can attend annual meetings

  15. The Elevator Speeches • What is the problem that drives your LEDO? • 30 seconds • 60 seconds • 90 seconds • What does your LEDO do that solves the problem? • 30 seconds • 60 seconds • 90 seconds

  16. Current Trends in LEDO Resource Development • A greater focus on one-time outside grants for special projects • USDA-RD to provide RLFs • EDA for key infrastructure leverage • For those 501(c)6’,s LEDOs are forming additional 501(c)3’s • LEDOs are also rethinking the board structure to bring in additional “members” of the corporation; these members then elect a smaller board of directors • A hot trend that calls for more revenue is the creation of “deal-closing” funds

  17. Discussion • How difficult will it be to raise that 2015 budget? • How many of your board members will be willing to make the ask? • What has worked in the past for you? • How formal should the resource development plan be in your community?

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