Sick of Fundraising? This Tool Makes it Easier for Social Entrepreneurs to Find Opportunities
Social enterprises and their innovations are instrumental in helping address the toughest global development challenges. But every social entrepreneur will agree that no matter what their social enterprise focuses on, where they are implementing it or what stage they are in, there is one challenge they all find to be extremely painful — fundraising. As one entrepreneur put it: “Finding funding is just a rat race.”
In fact, in our survey of 180 social entrepreneurs, close to 80 percent reported fundraising as their biggest pain point. In follow-up interviews, we asked 20 social entrepreneurs from various countries how they would rate fundraising on a scale of 1-5 (5 being excruciatingly painful). On average, they rated it 4.5.
We wanted to know what made the fundraising process so painful for them. Over the course of several months, we interviewed various social entrepreneurs who shared common pain points at the various stages of the fundraising process, including finding funding, determining which opportunities were worth applying to, and spending too much time actually applying.
Finding Funding Opportunities: Do I Qualify?
All of them shared challenges of combing through funders’ websites to find out whether their innovation would meet the basic requirements. Another issue is lack of clarity on the specifics. A grant manager for a for-profit social enterprise shared: “The problem we saw most often was that funders didn’t specify the stage or type of organization they were most interested in funding. Do we fit their criteria of social enterprise as a for-profit entity or are they looking for nonprofits only?” He further shared that another challenge for them is that funders often don’t specify the amount they are funding or the requirements about how those funds can be utilized. Around 30 percent of funding opportunities we’ve sourced for Global Innovation Exchange did not have an amount disclosed on the funding website.
Simply put, entrepreneurs often lack easy access to information they need to understand if they qualify for the opportunity.
Selecting Funding: Is this The Right Fit?
One entrepreneur with a health innovation explained, “there is ambiguity around what funders want. It’s hard to know if you have what they are looking for.”
Seasoned entrepreneurs know the importance of looking beyond the basics to answer, “Am I a good fit for this funder right now?” One such entrepreneur shared, “I try to figure out are we really in line with what they’re looking at. We don’t want to have to spin our story too much and say that we are something that we’re not. I really try to read in between the lines.”
Entrepreneurs lack the information about what funders are really interested in funding, which is essential to assess whether it is worth their time pursuing an opportunity.
Application Process: Will This Ever End?
A young social entrepreneur from Nigeria said: “Applications for larger investors are really difficult because they are asking for information that takes time to write.” This means that oftentimes, they will not pursue these opportunities, even if they are qualified.
They also realize the importance of standing out in their applications, which also takes time. “Out of 100 applications, three will be considered, so we spend a lot of time trying to design what will be sexy. There has to be an edge. Every two minutes you are trying to figure out what that edge is.”
One entrepreneur summarized the fundraising challenges as:
“We can spend a lot of time which we don’t have resources to invest, filling out applications where we are not the right fit because we don’t have the right information or it’s too broadly categorized.”
This is a story every social entrepreneur echoed. We acknowledge that not every fund-raising opportunity is going to pan out — and that’s okay. Bigger nonprofits or NGOs can more easily bear this burden, which is harder for these social entrepreneurs who are focused on implementing their innovation with the least amount of resources possible to be the most cost-effective in addressing the world’s toughest challenges.
The Solution: One-Stop Shop
One entrepreneur acutely pointed out, “there is no one-stop shop to see: Here are the different types of funding that is open and here is what they are looking for.”
This is where Global Innovation Exchange (GIE) comes in. This public good, tech platform, which is being launched this week, is designed to help social entrepreneurs fundraise more effectively.
On GIE, social entrepreneurs can develop their fundraising strategy and build a pipeline of new opportunities for their innovation by:
- Using the database of open funding that is simple, free and updated weekly.
- Researching the opportunities beyond the requirements by looking at past funding history for various funders including the U.S. Agency of International Development, Australian Department of Foreign Affairs and Trade, Bill and Melinda Gates Foundation, the Korea International Cooperation Agency, Grand Challenges Canada, Global Innovation Fund and more.
- Showcasing their innovation via “digital pitch decks” we call innovation profiles like EnerGaia or ayzh. This helps them get on funders’ radar, benchmark their innovation against others or be discovered by collaborators such as implementers in their country or sector.
GIE is part of our larger mission to accelerate innovation in developing countries through a central repository of global development innovations, related funding and other critical data. Investors, funders, implementers, practitioners or journalists, can use the platform as a research tool to learn about innovations in global development. This is just the beginning of bringing business intelligence akin to the private sector to the global development industry that is needed to scale innovations and multiply the return on investments in emerging markets.
Are you a global development social entrepreneur and familiar with fundraising challenges? Share your story and thoughts below and try out the platform.
Are you an organization supporting development-focused social entrepreneurs? Share this resource with them.
Photos courtesy of Global Innovation Exchange.