Fundraising In a For-profit World (Part 1/2): Scramble for Innovation
Fundraising has outgrown the non-profit world. People who see it as a toy for those not capable of making real money should not waste their precious time here. For the rest of you, I hope this will be an interesting read, assembled by a very passionate insider. Here is Part 1. Part 2 will be out before "Winds of Winter", I promise.
I made up my mind long ago. Fundraising was always going to be my weapon of choice, and my kill count so far says it was a good call. It could have been even better had I opted to stick to the easy way of raising funds for charities, human rights, and all kinds of empowerment.
Well, somewhat predictably, I just could not do that. Easy has never been my thing, though I wish I had that option at times.
So here I am, doing fundraising in a for-profit, inside a very profitable industry. For 6 years I have been following the path of innovation, eventually ending up as a fundraising consultant who almost exclusively works with SME’s and startups in one form or another.
It took a lot of strategy and patience to get to this point, but also a fair share of luck. Even after all those years of industrious writing and almost permanent scheming, being introduced directly to the founding fathers of the national innovation ecosystem is not something that a reasonable person takes for granted. It is fair to say that it was a combination of misfortune, strategy, hard work, scheming, luck and the perfectly timed rise of innovation that brought me here.
Now, here is a fun fact: That is exactly the same set of circumstances that brought fundraising itself to the for-profit sector, though it has yet to be universally recognized as its mainstay. Make no mistake - as grotesque as it sounds, many hardline capitalism worshipers still see raising money as an obvious antipode to making money - their deity of choice.
I remember my first day with current employer. I did a little tour of the workplace with my new boss who was introducing me to the people that happened to be there at that time. One of them, a very opinionated fellow, upon hearing why I was brought in, made a memorable short remark.
- Oh, free money. Sure.
Obviously unimpressed by my line of work, he painted a perfect example of the image that fundraising has yet to shrug off.
However, hard facts are pretty much one-sided and hardly allow an interesting debate. Winners are clearly those business owners and managers that can see fundraising for what it is – externally funded development that they would otherwise have to finance out of their own pockets.
Making money VS raising money - the epic clash of philosophies is of course a fantasy. It is the same money, and most of the time it serves the same purpose. Only the skill sets needed for each of them are different. Winners recognize, integrate and benefit from both. Not-so-winners prefer to see contest in this narrative. Back at my workplace, my boss and the opinionated unimpressed fellow reflect this difference convincingly enough. One has led his company from strength to strength and managed to grow even during the pandemic. The other is long gone and nowhere to be seen. He somehow managed to lose the same non-existing contest he felt so superior about.
The traditional view of fundraising as exclusively a non-profit thing certainly has some reasonable roots. It has been developed to empower those who fight for a better society, and this battle remains its main conceptual pillar. Sure, new theatres of war have been opened, new formations are advancing and new weapons are in use, but in essence - it is still the same old battle that rages on.
There was no clear cut-off point when fundraising entered the for-profit world. Some of its elements have always featured there, just not very prominently.
However, when the rest of the world finally started experiencing the full splendor of the fundraising travelling circus, with all of its shiny colors, freakshows, jugglers and acrobats – the change has been triggered by some momentous events still vivid in our collective memory.
Europe’s desire to avoid being caught in another vortex of passion between legendary lovers – French and Germans, led to the tighter economic integration and gradual development of the European single market. Being the best thing that has ever happened to Europe, single market propelled a proliferation of SME’s - small family businesses driven by the entrepreneurial spirit of Europeans, fresh out of muddy trenches, and fully focused on making the most of this new invention called peace. By the year 2007, SME’s were proudly wearing the flattering title - Backbone of the European economy. But then 2007 happened, and with it, a great misfortune that was the global financial crisis. Cracks in the European economy started spreading like wildfire, which led to a significant drop in its competitiveness, as new global economic powerhouses began emerging from the east.
In response to this era-defining challenge, European Commission made a faithful decision that was about to change everything.
The idea was quite straight forward: In order to grow and create jobs, European SME’s must be more competitive globally. Competitiveness was to be achieved through innovation driven by scientific research and disruptive digital solutions. But individual SME’s simply could not develop and implement innovation on the scale necessary for the critical continent-wide economic push. They needed structured long term support in funds, skills and collaboration tools. They needed all the science they could possibly apply and all the digital fixes for their leaking and rusty business models they could possibly score.
Out of necessity, innovation has become the most precious commodity in Europe, and engine constructed for its production, testing, distribution and multiplication was named Horizon 2020.
All of a sudden, there were hundreds of calls for proposals, with billions of Euros offered to those who knew how to get them. Over the next 7 years, Horizon 2020 has mobilized grassroots, repurposed fundraising, and built up the whole structure conveniently replicated from the non-profit sector. Today, as we count down to the start of Horizon’s successor framework, the fundraising travelling circus has long settled among hardline capitalism worshipers, with some of them even claiming that they've actually been clowns all along. This time, there will be no major construction works, as flags are already flying high and fundraising hype is in full swing. This time the show begins immediately!
And there you have it. Misfortune, strategy, hard work, scheming, luck and innovation.
In an ironic twist of fate, fundraising has penetrated the for-profit sector through some of its most profitable segments. Just as European scramble for innovation was about to begin, another unstoppable force was gaining its own momentum, preparing to burst out of the shadows and make its mark. It would go on to take the world by storm, and round up a remarkable rebirth of fundraising along the way.
Next time, I will tell you the story about this other force. It also starts with innovation, but then drifts away from the EU administrative procedures and fades into mythology. A story in which fundraising is no longer feeding the bureaucracy, but unicorns.