Integration

This blog is now integrated with the GlobalFOCUS blog network and any new updates will be posted there from now on.

The new address is:

http://blogs.globalfocus.net/globalfundraising/

Basic Questons

Most of the preparatory work is now done and as we are drafting a business plan to present to investors. I had a long discussion with our CEO this afternoon concerning how we move forward. The ball is now in our court and we have to decide exactly what kind of organisation we want to be in the long-term. What kind of capital we attract is dependent on how we want to implement change, whether we want to keep the not-for-profit business model or make profit, and if so when and how much. What about debt? And equity? These issues go to the heart of our long-term aims and activities, and whatever details we have not thought about in the past, we have to address now.

For-Profit?

I had lunch last week with a prominent climate entrepreneur and ex-McKinsey consultant to talk about our business model, which of our activities have the potential to scale up and which have the potential to generate profit over time. This meeting raised a number of interesting issues which might shape our business model and thus influence our fundraising strategy, issues which we now need to address in the team.

Networking in Cambridge

“Don’t work, network!” was the motto at the CUTEC event that I attended in Cambridge over the weekend. Networking is an essential part of the fundraising process, and I did have the chance to meet some wonderful young entrepreneurs, most of the MBA students, from Cambridge, London, Paris and Copenhagen.

We talked a lot about prospective ventures and I was very fortunate to have some MBA students from the world’s best business schools offer to give us feedback on our upcoming business plan. For someone who used to disliked networking, things have changed quite a bit. At most of the events that I attend now days, I end up meeting both strong business connections as well making new friends.

Trusts and Foundations

Trusts and foundations are primary sources of funding for traditional not-for-profit organisations. Getting an overview of which organisations is not too difficult, but it can be time-consuming, and costly if you have not got access to a decent library. The best single source of information is the West is the previously mentioned Directory of Social Change, which publishes several directories for different geographical areas. We have spent several days in the British Library mapping out the landscape.

Sources of Information

There are a number of excellent (and in many cases free) sources of information on fundraising on the web. I have previously mentioned Capital Ideas at Social Edge. The Foundation Center and =mc also have a lot of information online. The Directory of Social Change publishes a number of good books on fundraising and The Institute of Fundraising, together with many of the other organisations just mentioned, run regular workshops and courses on different aspects of fundraising. A diary of events in London can be found at UK Fundraising.

Fundraising Consultant

I had a first meeting today with an experienced fundraising consultant in London to present GlobalFOCUS and discuss our strategy. I was happy to hear that our strategy was not too different from the recommendations by provided during the meeting and that we could spend most of our time refining that strategy to increase our chances, instead of starting from scratch.

The organisational structure we discussed as a suitable to our efforts was a one based on trustees and patrons, with trustees covering the administrative costs of the organisation in order to make sure that all of the money contributed by patrons directly contribute to the impact on climate change.

We also discussed non-traditional sources of funding, which are in many ways interesting, but also challenging, particularly in times of financial crisis. Sourcing capital from the major donors in the private sector also require some bold moves and an extensive network, utilised meticulously.  It is now up to us to decide whether we are up to that challenge, and the rewards that are available through it.

Thoughts on the Process So Far

As we now are a few weeks into the project, I wanted to take a moment and reflect on how some of our perceptions of the process have changed since we started out.

1. Admittedly some of our optimism setting out has been weakened in the realities of the global financial crisis. As it turns out, certain sources of funding (particularly newly created and private sector initiatives, as well as those funds hurt particularly badly by the crisis) are frozen at the moment. These sources will also be extremely cautious so bold, experimental organisations who are entering unexplored territory might experience extra difficulties for the time being.
2. With the financial crises also come opportunities. The talks of a New Green Deal in the US and UK as emphasised what GlobalFOCUS has been advocating for some time, namely investments in low carbon technologies and infrastructure as an opportunity, not a problem. President Obama repeated in his first press conference a few days ago the green stimulus package as one solutions to three problems: the climate, the financial crisis and unemployment.
3. In terms of fundraising some the restraints an organisation like ours generally face in virtue of being a not-for-profits have transformed into a relative advantage. Technology venture capitalist Trevor R. Loy from Flywheel Ventures in California asserted in a lecture last week that those companies in his sector who survive are those who can limit their ambitions and sustain themselves through the crisis. We have already secured our core funding and are looking to expand our operations. If this proves too difficult in the current economic climate we can comfortably sustain our current organisation, but our ambition remains to grow!

Capital Ideas

I just discovered that Eric Savage & Kylie Charlton run a great blog at Social Edge.  Capital Ideas is described as a “Finance 101 for Social Entrepreneurs” and is a wonderful resource throughout the fundraising process.

There are entries on financing alternatives, pitching, business plans and more. I have not yet had the time to read through all the material on the blog, but what I have had the chance to look at is interesting and extensive without being too technical. The blog is running for another few months, so check it out!

Climate Entrepreneurs Raising Capital

This afternoon I was down in Covent Garden for an Environmental Investment Network meeting, hosted by Clarks Legal and the EIC. I wanted to meet a few climate entrepreneurs from the UK, as well as some people from the cleantech sphere, but most importantly; I wanted to see how the entrepreneurs themselves raised capital to fund their businesses. In the audience with me were mainly venture capitalists who knew how to spot an investment opportunity from a costly mistake.

The most important lesson of today I think is this: the moment when you meet your potential investors, that is when long hours of thought, preparation and due dilligence that have gone into the business plan really pay off. Whether you are fundraising for a business, social business or charity, the original idea, no matter how brilliant, needs to be transformed into a complete business plan, which can then be communicated elegantly. Any short-cuts taken in that process will become obvious in front of the potential investor.