2013 was Mozilla’s most successful fundraising year ever. We grew our core operating grants and more than doubled the size of our donations campaign.
This is a shared, project-wide accomplishment. More than 40 Mozillians from across the foundation, corporation, and community pulled together to make it happen. And I’m proud of what we accomplished.
We still have a long way to go. We’re overly dependent on a few key funders and there’s a big gap between our current revenue and our goal of matching Wikimedia’s fundraising program.
But 2013 was an indication that we’re on the right path, with the right team, and a mission our community loves.
This post is designed to help you answer the question:
“Why do you need my money when you have all that Google cash?”
We’ve provided 5 different ways to answer the question, listed in order of how well they usually satisfy the person posing it. In terms of soliciting support, (1), (2), and (3) all work in decreasing efficacy. If you find yourself answering with (4) or (5), you’ve already lost.
(4) is the one most people inside of Mozilla will tell you. But it won’t inspire anyone to make a donation, won’t inspire anyone about the mission, and demeans the potential upside of what fundraising does for Mozilla both in terms of bringing new resources to the mission and growing our community. (5) is tricky and brings up all sorts of other questions, so use at your own risk.
None of the answers are prescriptive or written as scripts. Just suggestions. You can also make up your own answer: why you feel fundraising is important to Mozilla.
When answering the question, the most important thing is to be confident; you don’t need to excuse anything. More than 120,000 people gave to Mozilla in 2013. Our community understands that we’re different, that we’re tackling a huge challenge, that that challenge matters, and that we need all the expertise, time, and money we can get if we’re to win.
You can also point them to this post on why fundraising matters to Mozilla.
1.) Turn around, look up the hill.
The main thing that works is contextualizing $300M in terms of the scale of the challenge. It’s a lot of cash by itself. It’s nothing compared to what we need to do. Don’t look down the hill at the scale of other non-profits. Look up the hill at the scale of each of our competitors, much less their combined strength. Follow this up by talking about the outsized impact that Mozilla wields. How $10 in our hands goes much further because of our community, our leverage, and our reputation. Look at what Firefox did to Internet Explorer.
Strength: Fact-based and usually obvious, once pointed out.
Weakness: Risks making $10 feel inconsequential.
2.) Product vs. Program
The $300M Firefox makes is spent making Firefox. The Google revenue pays for the main pieces of software we build. There’s barely any left once that’s done. But there’s still a lot we need to do to pursue the mission. That’s where the donations and grants come in. They drive our education work. Our activism. Our protection of privacy. Our research and development. They help us teach kids to code. To get governments to respect our rights to privacy. To address the parts of our mission that Firefox can’t solve by itself.
Strength: Makes it clear where the donations go and why $300M isn’t enough.
Weakness: Most people know and like us because of Firefox. This argument underlines that their donations are not directly connected to keeping Firefox around.
3.) Money is more than money.
Money is a means of contributing. Of expressing support. Of making partnerships real. Of feeling you belong. Of getting us into rooms. It lets us build relationships with funders that help us direct and influence how billions of charitable and public dollars are spent each year. Money brings much needed resources to our organization, but it also grows our community, builds our momentum, helps us solidify key partnerships, and generally gain the energy, access, and reach we need to win.
Strength: Lots of rhetoric and poetry. You can hear the music swelling.
Weakness: Nothing but rhetoric and poetry. Easily deflated.
4.) Being a non-profit matters. And non-profits need to raise money.
Being mission-driven isn’t enough. Mozilla’s founders decided they couldn’t pursue our mission as a software company that maintains a value set. They decided that we actually need to be a non-profit. That’s the anchor that does more than just guide our decision-making, it guarantees we make the right call. And non-profits in the United States have to fundraise. It’s part of what lets you stay a non-profit.
Strength: Fact-based and a one or zero problem set. We don’t fundraise, we can’t stay a non-profit.
Weakness: Completely uninspiring. If you get here you’ve usually already lost, as it’s the least interesting and motivational.
5.) Fundraising is part of our efforts to diversify our revenue.
Saying this is risky, because the size of our fundraising program is nowhere near the scale of our Google deal. However, our fundraising has almost doubled year-over-year since 2009 to reach $12M in 2013. Wikimedia, our closest analog, makes $30M a year, which is real revenue. We’re working to match that. Large charities – hospitals, universities, big health – routinely combine large earned income programs with equally large (if not bigger) fundraising programs measured in 100s of millions a year. This is many years away for us, but it’s a perfectly viable form of long-term revenue.
Strength: Diversification is an obvious good to most people.
Weakness: Fundraising is not a meaningful replacement for the Google deal (yet). Also highlights the dependency on the Google deal.
Sue Gardner, the outgoing Executive Director of Wikimedia, has just launched a brilliant and insightful mini-manifesto on fundraising; specifically, the disconnect between what we do and how we pay for it. (Vs. the for-profit sector, where what they do is how they pay for it.)
As a fundraiser who works within an open culture, I relish the instances when fundraising is discussed transparently, with statements like this one:
“All sorts of energy is therefore dedicated towards making it [a satisfying experience for the donor]: donors get glossy newsletters of thanks, there are gala dinners, they are elaborately consulted on a variety of issues, and so forth.”
It doesn’t say anything fundraisers and donors don’t already know, but it’s wonderfully direct to call it out.
The post also echoes many of my favourite rants:
“I’m particularly irritated by people who say that nonprofits “should be more businesslike,” with businesslike as a kind of confused stand-in for “better.”
“In the for-profit sector…[p]aying attention to revenue makes sense in part because revenue functions as a signal for the overall effectiveness of the org… Nonprofits also prioritize revenue. But for most it doesn’t actually serve as much of an indicator of overall effectiveness.”
“Donors seem relatively willing to accept the proposition that administrative effectiveness is a good proxy for overall organizational impact, even though such a proposition is actually pretty weak. A whole industry has developed around this: supporting good compliance and measuring it, as a service for potential donors.”
Sue outlines how Wikimedia built their small dollar program, which is (quite rightly) held up as best-in-class. They raise a huge amount of unrestricted money in a very short period of time. What’s more, they do it all in the open, publishing their strategies, results, and practices to be understood and emulated by other non-profits.
But I break with the post when Sue asserts that successful non-profits focus on one type of fundraising.
The Bridgespan study she cites has fostered prevailing wisdom that effective organizations build around one form revenue: grants, gifts, or donations. This assertion is based on the premise that the type of money you chase shapes your organization, so expertise and impact can be achieved through focus.
The flaw in the study is its conclusion that efficiencies flow from a permanent focus as an organization. Instead, the gains are achieved through a time-bound, need-driven focus based on your stage of development. I.e. You should chase the type money best suited to what you need to do next. Not just chase one type of money.
This is how the private sector works.* You bootstrap through contract work, focus with angel investment, scale with venture capital, and generate revenue to sustain operations and create profit. There are financial instruments and practices for each stage of development.
The strategy we use at Mozilla is to launch projects with grants, scale them through gifts, and sustain them through small dollar donations. This keeps us on the plus side of all the various trade-offs, benefits, and challenges related to different types of fundraising revenue.
The jury’s still out but it seems to be working. Webmaker and OpenBadges were built with grant funding. As they begin to scale our focus is shifting to lining up investments — gifts — to drive their growth. And, in parallel, we’re experimenting with how they can play into our small dollar program.
I’ve written a series of posts that lays all this out in greater detail and would love to hear your thoughts.
If you love these topics as much as I do, I’d also encourage you to check out the work of Dan Pallato on breaking away from the the ‘low overhead’ approach to fundraising and Jennifer McCrea on how to build true working relationships with your donors.
* I realize I’m contradicting myself about modeling from the private sector. =)
As a non-profit, Mozilla has access to four types of revenue: grants, gifts, donations, and earned income. Our earned income streams come through Firefox, which leaves the other three – grants, gifts, and donations – to be driven by our fundraising strategy (the focus of this post).
So far, and while we can always get better, we’re pretty good at securing grants. We’ve built meaningful working relationships with large philanthropies and government agencies, which contribute approximately $5M each year to Webmaker, Open Badges, and our policy work.
We don’t have a major gifts program (as yet; more on this later in the year).
And, while we’ve spent a fair amount of time building a small dollar donations program, it’s definitely not what it could be. Last year, we generated around $750K from e-mails to more than 500K people and an end-of-year presence in the main Firefox channels.
There are many and valid reasons for this result. Fundraising as a large-scale social enterprise is challenging and I believe we’ve done well to get where we are. But given our reach and the importance of the Web there is massive room for improvement.
NOW: Help us get better at fundraising. Tell us what you think about Mozilla, our mission, and our fundraising.
Solving Small Dollar Fundraising
Building an effective small dollar program is important for several reasons:
- It’s the most stable form of revenue available to the Foundation: small amounts of funding from a large and diverse group of donors;
- It mitigates risk by distributing external dependence and increasing revenue diversity; and
- It’s a meaningful contribution path for a large number of Mozillians who don’t have the time or capacity to code.
Grants and (eventually) gifts will always be crucial to the health and growth of Mozilla. They allow us to work with amazing partners, test new ideas, and launch new products. But building a sustainable small dollar program is our top development priority for 2013.
Enter the Study
Good fundraising – like many things – involves constantly questioning and challenging assumptions. We’ve used the first part of year to hold conversations to gain perspective and input from the Mozilla community: people who care about our mission and want to help it succeed.
We’ve asked what people think about Mozilla. Why they have chosen to become involved. Whether they think being a non-profit is central to what we do. Whether fundraising should be a part of that. And, if yes, how we can make it more effective. (Get involved and be heard.)
The Story So Far
The discussions have been amazing. We’re learning a lot about Mozilla and why our community and staff devote their time to the cause. And we’re also seeing themes emerge around how people view Mozilla, our mission, and our fundraising:
Being a non-profit matters. It’s the foundation of our brand, what differentiates our products in the market, and the source of a lot of pride. Not having external shareholders is empowering. But people resist being identified as a charity. The sense is that ‘charity’ carries connotations of need and behaviours that don’t apply to Mozilla.
Tension between being ‘mission-driven’ and ‘product-driven’. There’s a healthy, though challenging, day-to-day tension between the ‘why’ of our work, the mission, and the ‘what’, shipping products. That tension is surfacing more as we enter new markets with different operating cultures. And in terms of fundraising, the tension impacts decisions like whether to direct site traffic to fundraising or product marketing campaigns.
Fundraising has been a black box. Very little is understood about how or why we raise money. Most of the participants in the study wanted to learn more: to have a chance to engage and help shape our fundraising. So we, as the development team, need to get better at sharing our work. (This post you’re reading and this post and these posts and this dashboard are our first attempts to fix this.)
Donating is considered a more accessible contribution path than coding. Mozilla’s competitive advantage is and has always been its community. We don’t have the financial strength or employee base to go head-to-head with our competitors. When we win, it’s because of the people who contribute to our work. As our mission gains importance – as more things move to the Web – we will need to attract contributors from outside our usual channels. People who don’t code, but have other sources of expertise that can advance the mission (see the groundswell of educators gathering around Webmaker). Donating is seen as an easy yet meaningful way to become a Mozillian.
Online fundraising isn’t the only way to raise money. To date, small dollar fundraising and online fundraising have been synonymous. But as we scale Webmaker events around the world, as we get more people into more rooms, and as ReMo continues to grow and kick ass, we increasingly have opportunities to raise money in-person. We need to look away from the Lost Ark of online fundraising to new ways to engage directly with donors.
Donors want to know where their money goes. In line with trends across the non-profit sector, people want to understand the specific impact of their donations. Crowdfunding, social media, and micro-lending platforms have led donors to expect a direct relationship with the recipients of their support. We can do more to draw the line between a $30 donation and a scientist, teacher, or teenager learning how to express themselves on the Web. (We also need to get our act together around an annual donor report, most likely as a fork of the yearly State of Mozilla.)
We should be good at being a non-profit. One of the most interesting themes was the sense that if we’re going to be a non-profit, we should be good at it. That we should leverage all the advantages – volunteers, movement building, partnerships, activism, fundraising, etc. – that come along with it. Not at the expense of our strength – building meaningful products – but as a way of pursuing our mission and expressing our brand.
The study is also surfacing a healthy amount of skepticism:
- “Why do we need my $30 when we have all the Google revenue?”
- “I delete all those e-mails. I don’t think they’re effective.”
- “Doesn’t everyone get paid from the Google deal?”
- “Why do we even have a Foundation?”
- “We shouldn’t be asking people for money. It’s annoying and unnecessary.”
- “We need people closing bugs, not giving money.”
Perhaps the best finding so far is that many of the people who work for Mozilla also donate to the mission. This means that the people who experience Mozilla on a daily basis continue to believe in the organization and its work. As a fundraiser, I know that one of the first things major donors ask is what percentage of employees also donate to the mission. So we’re in good shape.
We want to talk to more people. But as we can’t take everyone to lunch (sadly!), we’ve put together a survey. Please take 5 minutes and let us know what you think about Mozilla, our mission, and our fundraising. This is your chance to help us rock. We hope you’ll participate.
What Will Happen From There
In early June, we will:
- Post the final results and analysis of the study;
- Use the results to shape a new fundraising strategy; and
- Work to engage every Mozillian – including you – in what we hope will be our most effective end-of-year campaign ever.
So far we’re thrilled at the number of people who actually want to step up and help Mozilla raise money. The challenge is on us, as a team, to make sure you can and to do so with pride.
Building a product involves delivering on a brand promise. It means achieving stability, consistency, and permanence. It involves shaping the entire ecosystem: dependable release cycles, a healthy contributor community, on ramps for new users, partnerships that bring value, and reference implementations that showcase potential. Perhaps most importantly, it means creating something that works: that achieves its expected and intended purpose.
Our Project Directors already function as Product Managers. They are responsible for driving for the utility, polish, and performance of the tools and programs they oversee. They are expected to gain market share, achieve performance metrics, and meet targets. And because we’re social enterprise – a group of people in pursuit of a mission – our Project Directors are expected to build things that empower you to help shape the Web.
Our fundraising strategy will extend this product model to include funding and revenue generation. Along with the tools, content, and community that comprise our products, our project teams will ‘ship’ the funding narrative needed for their next stage of development.
- Grants: How is what we want to build going to help foundations and governments deliver on their priorities?
- Gifts: Now that we’re starting to gain traction, what’s the big dream that will excite investors to help us scale?
- Donations & Revenue: And now that we’ve built something useful, why will people pay or give to keep it going?
Having to deliver a funding narrative will add scope to an already complex task. But (despite our best efforts) money continues to be a thing we need. If we don’t think about funding from the start we ensure that, when we do get around to it, we won’t have the relationships, value proposition, or narrative in place to be successful. Much better – and easier – to bake it into what we already do.
Mozilla’s new fundraising strategy will see us pursue grants, gifts, and donations in sequence. Projects will launch with grants, focus and grow with gifts, and sustain themselves with donations and earned income.
The strategy is based on key assumptions about each type of funding:
Structured relationship; Contracted deliverables; Funders have to invest in projects;
Funding can address core costs; Support flows from talent, vision, and results; Open communication provides flexible decision-making;
Funding can support all types of cost; Comparatively stable, predictable revenue; Can mobilize a community to action;
|Challenges & Risks||
Restricted, project-based funding; Additive to scope; Process-driven and closed decision-making;
Have to already be demonstrating success; Donors do not have to fund anything, let alone you; Personal dynamic can introduce complications;
Requires active channels to an existing community; Messaging needs to be simple, clear, and direct; Comparatively costly to maintain;
To launch new projects; To establish relationships with new partners; To build internal capacity;
To grow promising activities; To gain access to expertise; To catalyze a bold, new vision;
To sustain existing activities; To gain stability and independence; To mobilize a community;
Working from this matrix will let us achieve three things:
- Have the right fundraising team and message in place at the right time;
- Come out on the plus side of the reward/risk and return/investment equations; and
- Gain independence and stability over time.
For example, while all forms of funding are rooted in partnership and common cause, they each require a different approach. Grants are joint ventures between institutions, major gifts are sales driven by strong personal relationships, and donations are one-to-many marketing campaigns.
Similarly, they carry different trade-offs. You can start a new project with a grant, but you take on process requirements and additional scope. Major gifts provide breathing room, but trade contracts for personal relationships based on — occasionally dynamic — emotional bonds. Donations provide stability, but require an established brand, significant reach, and timely narrative.
Finally, a mix of funding will achieve the revenue diversity we need to reduce financial risk.
In the next post we’ll look at how we’re going to implement this strategy.