Creating effective relationships with financial backers is essential to
Impact investing is an up-and-coming way for social cause campaigns to raise the funds needed to make a difference. And since it’s pretty new, we realize you might not be entirely familiar with what it entails. According to Forbes, this fundraising method allows private investors, companies, the government, and others “to invest in efforts that not only provide a return on investment, but also target specific social needs.” In other words, it’s a way for causes to wean themselves away from dependence on donations by generous philanthropists – and it might even mean that budgeting will be less of a guessing game!
But let’s get real: asking someone to fund your cause is a tricky business. One wrong move and a prospect could lose interest in moving forward. Here are some practical tips for approaching an impact investor:
1. Get to know them and their personality. Before you approach a potential investor, do your research. Learn about them. Figure out who they are and what causes they care about. Then, determine a plan of attack and apply all of this research as you reach out. Knowing more about prospects will give you leverage in understanding how to approach them and answer any difficult or complex questions.
2.Get them up close and personal with your mission and campaign. Many people aren’t willing to invest in something they don’t see as a beneficial idea — whether it’s a startup, a company, or a social cause campaign. A prospective investor needs to understand and believe in your vision before they shell out their cash.
That’s why you need to give them a taste of what’s to come from your effort. Show them the real “you.” Bring them to your meetings so they have a good understanding of the operational workflow and get to meet your team of volunteers. Invite them to an event or rally hosted for your campaign. Do whatever it takes to get them interested and keep them that way. Make it easy for prospects to see your vision clearly, without a clouded view or playing the guessing game.
3. Be clear about what you’re looking for. We’re not exactly suggesting you need to ask for a specific number, but be honest about what you’re looking for. Do you want a certain level of financial investment? Are you hoping for help to get your campaign launched from the ground up or are you in need of funds to keep it up and running? Are you looking for a long-term commitment? How much time have your volunteers promised you?
Let your potential investors know! The more they understand about the campaign, the better. Don’t be afraid to share how you see them and their contribution playing into your overall vision. Of course, you can’t assume that an impact investor will automatically hop on board on your terms, but you need to be up front about what you’re aiming for.
4. Be willing to bend your expectations if needed. You can’t force anyone to be in, so be flexible. A prospective impact investor might not have the same contribution level in mind. Being willing to negotiate can mean the difference between some funding or nothing at all. Besides, nothing is worse than a stubborn or pushy campaign manager during the process of bargaining for support.
5. Show them the numbers. Companies and individuals who have enough cash to consider investing are more than likely going to be good with data. Now’s your chance to wow them. If you want to get an impact investor on board, you’ve got to have your numbers ready. Make charts to help them understand how their contribution will be used. Make a plan for every penny you’d like to raise. Your seriousness and professionalism are bound to leave an impression.
Understand that prospects also want to know how and when to expect a return on their investment. After all, this an for them — not simply a charity donation or a grant. If you can provide an estimate of when you expect a return on their capital, they’ll be more likely to give you their backing.