Funders Want to See “Skin in the Game.” Here are Three Ways to Show It

Image: Shutterstock

Image: Shutterstock

If a nonprofit leader is plotting a bold new move, he or she generally needs to inspire new support from a range of partners and donors in order to pull it off.  But how to do this when the new undertaking involves significant risk?

Careful research, a well-conceived business plan, and a clear and compelling pitch are certainly critical to developing buy-in. But my client work suggests another opportunity to inspire confidence from potential partners in the face of uncertainty that many nonprofits miss.  

Demonstrating that people have “skin in the game” – or have made specific commitments to the field of play – can have a powerful influence on those still standing on the sidelines. The term “skin in the game” is often used in business and finance. But in the nonprofit context it can refer to much more than monetary investment. And the “skin” can come from valued partners, the nonprofit itself, or the community it serves.

Here are three ways I’ve seen this work.

1. Put a dollar amount on in-kind contributions  

One of our clients had ambitious plans to take a pilot program and scale it up to serve a significant portion of all pre-K students and their families in a major urban school district. The program had strong evidence of effectiveness and the growth plan was well conceived. But the plan relied heavily on philanthropic funding, none of which had been committed yet.

In preparation for a meeting with a room full of funders contemplating investment in the plan, we worked with our client to make the Department of Education’s support for the plan concrete. While the DOE was not committing dollars to the program, they were committing their buildings, significant time from teachers and administrators, instructional hours, and professional development time. We put a number value on these critical resources. The total was impressive and helped inspire the major philanthropic investment that followed.

2. Show concrete commitments from credible partners

Another nonprofit I worked with asked its long-term university partner to make specific commitments to gathering and analyzing data on the effectiveness of a program the nonprofit hoped to launch. The commitment of intellectual resources from a respected university increased the credibility of the program to potential funders and other program partners.

But what if you don’t yet have a partner whose commitments you can leverage?

3. Lead before asking others to follow

Nonprofits can start with putting their own skin in the game. That can look like 100% Board giving to the new plan, over and above their gifts from the prior year. It can look like a major portion of their discretionary budget allocated to the new undertaking, or an investment in developing a strong business plan. It can look like a low-income community that raises funds internally through bake sales and barbeques before asking for external investment from donors. These efforts send a strong signal that the nonprofit has committed whole-heartedly to its plans and will see them through.

At the end of the day, showing skin in the game helps potential partners breathe easier, knowing that risk is shared and commitment is strong.