Reply To: Questions regarding DPF.

[Rezwan]

I just spent all day Monday at a fundraising workshop offered by the Support Center for Nonprofit Management. The title: “Getting General Operational Support”. It was very informative.

First – as you note,

I would suggest the creation of an informational packet which could be used for such purposes. Something that isn’t technical at all, but tells 1) What Focus Fusion has the possibility of accomplishing, 2) What are the phases of development, 3) How much each phase of development will cost and how long it will take, 4) When/how we will know if the phases are a success or failure. 5) And, what EXACTLY we are asking of them (the billionaires).

LPP has a brochure, and it has gone out to some people. Not all that it should go to, by any means. But developing materials, tailoring them, updating them, and most importantly tracking down people to send them to, following up, phone calling, all that is skilled work that takes time and $. I suppose we could take the list and do a mailing to 100 billionaires. The brochure’s done, we’d just have to print 100, plus postage. Cover letter? Call first and after?

So you see, first we’d need to raise some modest funds for a billionaire-targeted fundraising campaign. And I’m not sure the brochures or more expensive “packet” would do the trick.

And the worst thing they could do is say no or ignore us.

Yes, most likely they’ll ignore a cold mailing. This kind of thing needs personal attention.

I’m all for having billionaires on board. Not least because it will give prestige to the venture and get other people more interested in participating. And for LPP, ease up on the tight budget, speeding up the experiment.

But the workshop had a lot of interesting points to make on fundraising strategy:

1) It’s best to diversify your portfolio of investors. One big investor makes you over-reliant on them. Also, they tend to want a lot of control and glory. Corporate donors want their name everywhere, etc. That might lead to some of the legal problems mentioned.

2) For any grant application, or appeal to big fish, they like to see how solid you are as an organization, how much people care about the issue. How supportive is the core of people interested in this venture? If you can’t muster support from the folks closest to the project, why should they support you? Eventually, with enough core support, you might get the big fish to put up “matching grants”.

3) On average, organizations get 80% of their funding from small and medium donors. (They said this in the workshop, and I don’t doubt it – it’s been LPP’s experience as well).

4) Building an organization, and getting people to donate money, takes a lot of time. You have to build the organization, build trust, make it a real vibrant place where people are truly involved in the mission.

5) This time and effort costs $. A lot of money raised is just spent on raising more money. Then, a lot of money is spent on unglamorous things like salaries, heating bills, office supplies.

6) Many potential donors like to ignore those costs and put restrictions on the money. The most restricted funds tend to come from government or specific grants. The least restricted (and most useful) funds come again, from small and medium donors.

7) It’s not really about getting money from people. It’s about developing relationships, finding people who are as passionate about this idea as you. Getting them involved in whatever capacity they can get involved. Eventually, someone will know a billionaire. But by then, hopefully, you won’t even need the billionaire ex machina device.

Not that I’d turn down the billionaire’s offer of funds. That would be mean.

Of course, I’m thinking about FFS as a nonprofit organization with a mission. You’re thinking about investors in the LPP experiment – a for profit endeavor. It’s a similar thing. Takes a while to build the relationships, and the big fish follow the little guys. Small and medium investors save the day. They’re the bread and butter, man. They’re solid.

Now, the only problem with this that I see is that “micro-investors” or, non-accredited investors who want to chip in funds to the experiment, will get nothing back from their investment. They can only donate. So, this tends to discourage people from donating. Let the big fish be a free rider on my dime! Hah! Let them come up with the whole thing. This issue has always bugged me.

After the workshop on fundraising, taking advantage of the handy NYC location, I met with an organizer of the Cornellians in Entertainment networking group. We talked about the crazy world of film financing, the crazy economy where the big guys seem to be playing a number of ponzi schemes and not really trying to make money available to businesses or innovators. And then getting bailed out by taxpayers. It’s the same issue. I think the “accredited investors” model doesn’t really work for the economy. We’re setting up a Cornell meeting about it in the new year to discuss “micro-financing” and the rules and institutions that might make it work. A lot of similarities in the sciences and in the creative arts as far as funding high risk ventures (movies flop, inventions get beaten out by other inventions, etc.)

Anyway, if you have a close, personal connection to a billionaire, by all means, set up a meeting! Get us in the door! But I suspect there’s a more sustainable, community building, organic, feel-good payoff from appreciating small and medium donors.