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E26: Negotiating With Donors To Scale Impact

by Sean Boyce

How do you get donors to focus on impact?

What I talk about on this episode
  • How to negotiate with donors
  • Why they are (still) focused on output
  • How to refocus the conversation around impact
  • A negotiation tactic for managing this conversation
  • Great books to help with this effort
Resources
Episode Transcript

Hey everyone, Sean here and today what I want to talk to you about is negotiating with donors. 

That might sound somewhat surprising because usually in the nonprofit world, we’re trying to figure out where we can receive funding from and when we can receive it. We usually accept it. Right? But what I’m here to share with you today is that if that funding is coming with what you believe to be arbitrary strings attached, or any type of limitations that are gonna hold you back from achieving your mission, that you should consider negotiating upfront, so that it can be more well aligned with how you want to drive impact at your organization. 

Now, this can be funding from private sources, all the way to grants and quite a bit of the time some of that money comes with the strings attached that are tied to output as opposed to achieving successful outcomes. Now, as a nonprofit leader, you probably know better in that achieving more output isn’t necessarily going to drive more successful outcomes or impact for your beneficiaries and your clients which means that it’s probably worthy of a conversation. 

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If you’ve been on the nonprofit scene for a while now, I’m sure you’re very familiar with this challenge and I’m also sure that you’ve probably seen that landscape shifting at least a little bit, in that people are more aware of this as a problem nowadays. So they’re more open to a conversation about focusing on outcomes as opposed to output. So if you are if you find yourself in a situation like this, what should you do as a nonprofit leader? I would recommend negotiating any of those limiting factors upfront as much as you can, pushing back and refocusing that conversation around driving successful outcomes, which are ultimately going to lead to real impact. 

Now, if you are having a conversation with them, you may need to provide them with examples, as in whatever strings that might be attached to the funding source. In this case, it might be certain amount of output produced like meetings held or some kind of time element or whatever. But at the end of the day, what you might be trying to do is cure childhood literacy or pull people out of poverty, right? So give them examples to compare something like those two together, for them to better understand what the real mission is here. We’re not trying to have as many meetings as possible. We’re trying to cure childhood literacy or we’re trying to save people from poverty, right? They should get excited about that latter example much more so than the former. As such, you’ll start to inspire them and get a better understanding of where you’re coming from and what the real mission of your organization is, then you can help them better understand how, however that is written to access that funding is limiting you in that way. A lot of this detail is laid out in the book Lean Impact written by Ann Mei Chang so if you don’t have a copy of that book, I’d highly recommend you get one and read it because there’s a lot of really powerful information in it to help you with this process. 

I’m gonna recommend another book as well too. This is another tip that I use and a strategy when it comes to negotiating something like this and that comes from a book called Never Split The Difference which I’m another huge fan of. I think it’s a fantastic book about negotiating, and it can realistically be for anything, but I’m going to leverage one of the tactics recommended in that book in this episode and share with you because I feel it applies in this situation. If you’re having a conversation with someone who may be a particular funding source, or grant or private donor or whatever, and you’re getting pushback in terms of trying to refocus the effort from output to driving successful outcomes. One of the tactics that’s recommended in that book Never Split The Difference is to simply ask them to describe for you how you can be expected to achieve both of those objectives simultaneously. So the question essentially just goes something like this. If they’re saying that you really need to focus on the number of meetings and those other things are somewhat less important or are as important as having a number of meetings. You can ask them how you can be expected to do that, right? How can I be expected to focus on two or three things at the same time and make as much progress as if I were just focusing on the one that ultimately delivers successful outcomes and drives impact. 

So I recommend both of those books and I hope this information was helpful in terms of helping you understand that this process can be a negotiation, and whenever it can be leveraged some of these tactics in order to refocus efforts on driving successful outcomes as opposed to output so that you can focus more on scaling impact.