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ОглавлениеCHAPTER TWO
WHERE’S THE
MONEY?
“You prepare the ground so that a lucky accident can happen.”
— Sidney Lumet
“Where is the money?” That’s an easy question to answer.
There is a simple map to follow for finding money, and it is made up almost exclusively of the following (placed in order of their ranking for giving to all noncommercial endeavors of every type — not just film and video — nationwide):
♦ Individuals
♦ Government (Federal, State, and Local)
♦ Private Foundations
♦ Corporations
♦ Small Businesses
♦ Other Nonprofit Organizations
The filmmaker must remember that he is swimming in a sea of money — surrounded by many sources of funding. The difficult decision is choosing which of these sources is the most appropriate for the filmmaker’s personality and for each project so that energy is placed in the right direction. The filmmaker needs to:
♦ create a fundraising plan
♦ identify the most appropriate sources for each project
♦ research each prospect thoroughly, and then
♦ make the “ask” in the most effective way possible.
There are no deep, dark secrets to fundraising and no set of arcane or insanely difficult skills to acquire. Mainly, fundraising is just plain hard work. One thing that complicates fundraising is that it takes a slightly different set of tools to work in each avenue of possible support. Approaching individuals is different from approaching private foundations. The fundraising letter you send to a corporation will be very different from the one you send to a small business.
This chapter introduces you to the broad categories of possible support and provides an overview of the terrain. I will highlight the “upside” and “downside” of each avenue, list the main ways to research each area, and quickly highlight the means of approach. Later in this book I will be giving much more detail on how to actually conduct your fundraising approaches (e.g., how to write a grant, how to ask an individual for support).
INDIVIDUALS
Upside: Individuals have traditionally represented over 80% of all the donations given to all noncommercial enterprises of all types in the U.S. Individual donors provide the filmmaker with a vast pool of potential support. If a filmmaker needs money quickly, individuals are the fastest source of support. Many individual donations are possible in a short amount of time. Also, this type of fundraising entails establishing a direct connection with the donor, and generally involves very little paperwork.
Downside: This type of fundraising is very labor-intensive. Donations generally trickle in over long periods of time, and arrive in small-to-medium amounts. Individual donations are usually in the hundreds of dollars (or less), occasionally in the thousands of dollars, and very rarely in the tens of thousands of dollars.
How Do I Find Them?
People with money for film and video projects are everywhere — quite often in the most obvious places, the ones filmmakers might take for granted. Here is a laundry list of places and methods for finding individual donors:
♦ In your head. The filmmaker should take a moment to think about everyone he has ever met who likes him and/or might take an interest in his project. Rummage through memories of parties, past jobs, conversations with friends, business luncheons, and attendance at official receptions.
♦ In your Rolodex. The filmmaker should go through every name in his address book, Rolodex, or electronic organizing device and see if these generate any ideas or leads. Look at each and every name and ask: “Is this a person who could be of some help to me? Is this a person whom I should ask for support? Is this a person who might give me leads to other people or organizations?”
♦ In your family. Do not rule out asking close relatives and friends for support — they are often the first donors to a project. Keep in mind that the vast majority of individual donations come from people with annual incomes below $50,000. Filmmakers are often hesitant to ask friends and family, but if they are appropriate and if the filmmaker feels they can afford to help, then the task is to find a comfortable way to make an approach.
♦ In your local newspaper. Check out the appropriate sections of local and national newspapers for people who have shown interest in the topic area of the film (for documentaries), including the business pages and society columns. It is surprising how often newspapers list the causes supported by individuals, and even how much they gave.
♦ Throw a brainstorming party. A very effective way to garner names is to throw a brief evening gathering where the filmmaker asks guests to help brainstorm names of people and organizations that might contribute.
♦ Cast out/into the Net. The Internet is an excellent place to get word out about a filmmaker’s project to niche groups and begin to find people of similar interests who might lend support. Look for appropriate blogs and Web sites by topic area and post notes there if the Webmaster will allow it. Establish a Web site and/or blog of your own and have it linked to other sites where people might want to find you. Become involved in social networking sites (MySpace, Facebook, Twitter, etc.).
♦ The Social Register (available for a dozen major cities).
♦ Membership and Donor Lists. Check the back of annual reports, performance programs, and Web site donor lists from nonprofit organizations where target donors are likely to have already contributed. This is a rich source of information on potential donors. The lovely thing about these donor lists is that they almost always provide the amount of money each person gave — an important piece of information.
♦ Who’s Who. Editions of Who’s Who are available nationally and for regions, as well as various professions.
How to Approach Individuals
♦ One-on-One (or Two-on-One). This is a direct, in-person “ask” and is statistically the single most effective way to get money. The one-on-one ask may also be the most difficult one to arrange. A variant on this is the over-the-phone ask (only good with people you already know).
♦ Fundraising Houseparty. This is not to be confused with a fundraising event where you charge admission. A fundraising houseparty is one where a number of people are invited to an evening soiree at someone’s home. Everyone invited understands that a presentation will be given that night about your film, and that participants will have a chance to decide about making a contribution. (For a very detailed description of this type of event, refer to my book, The Fundraising Houseparty: How to Party with a Purpose and Raise Money for Your Cause — 2nd Edition available at www.warshawski.com).
♦ Direct Mail. There are two variants for direct mail approaches.
• The first is a personal letter sent by you to just a few people you know personally, or by an avid supporter who will write to his own friends.
• The second is a mass mail appeal sent to a list you have acquired of possible supporters (members of clubs, organizations, magazine subscribers, etc.).
♦ The Internet. This area of fundraising has been growing exponentially in the last few years. E-mail letter appeals to individuals is one approach, but only if the recipient feels that the mailing is not a mass “spam” appeal. Linking your letter to a Web site and/or blog that has more details is a good idea. Listserves and social networking groups (like Facebook) are another way to get information out about your project and your need for support. Typically, this works best if the filmmaker has a cause-related program, and the notice is being sent by an organization that is involved in that cause and has a large membership list.
GOVERNMENT
Upside: When a government source awards a grant it is usually a substantial amount, in the thousands of dollars. Government grants are very easy to research, and agencies that reject you must provide you with feedback on your application if requested.
Downside: When the economy is down, government grants shrink considerably and become even more competitive than usual. Paperwork can be very extensive (long application, follow- up reports, and accounting). Some government agencies are very worried about political scrutiny, so controversial topics have a more difficult time finding support here.
How Do I Do the Research?
There are three levels of government support available: National, State, and Local.
Nationally, the major sources include:
• National Endowment for the Arts
• National Endowment for the Humanities
• Corporation for Public Broadcasting
• Public Broadcasting Service
• Miscellaneous government agencies (e.g. Forestry, IRS)
On the State level there are typically:
• State Arts Agencies
• State Humanities Councils
• State Tourism Boards
On the Local level there are very few agencies that give support, but you can look for:
• Local City or Regional Arts Council
• Local/Regional Commerce and Growth Associations
• City Tourism Board
Information on Government sources can be found through:
• Catalog of Federal Domestic Assistance. Available in most libraries.
• Directly from the agencies themselves. All publish their own guidelines and application forms and can be found on the Web.
• Foundation Center Libraries. Located in most metropolitan centers, these libraries are a great font of information. (See detailed note in next section).
• Internet. Every Federal agency, and many state and local agencies, maintain their own Web sites replete with information and, often, downloadable application forms.
How to Approach Government Agencies
Very simply: Get the guidelines, determine if you and the agency are a good match, request the application form and fill out as appropriate, and contact a program officer before sending in materials to cover any questions you might have.
PRIVATE FOUNDATIONS
Upside: In the last two decades private foundations experienced an explosion in the size of their endowments and the numbers in their ranks. Foundations with a variety of interests can be found throughout the U.S. Grants are almost always in the thousands of dollars, and foundations are very easy to research.
Downside: It takes a long time to finally see a dollar from a foundation, and often years of work setting the stage for an ask — six to eighteen months is not unusual. Some foundations meet only once or twice a year, so it is important to be very mindful of deadlines. Paperwork is usually extensive (introductory letter, full grant proposal, follow-up reports, and accounting). Competition for foundation support is always very stiff, and increases when the economy is in a slump.
How Do I Do the Research?
♦ Foundation Center Libraries. These are the first and best places to go. The Foundation Center Libraries contain many books that list foundations, their areas of interest, application procedures and grants they have given in the past, as well as basic books on how to write grants. The Foundation Center maintains cooperating center branches in every major city in the U.S. For the one closest to you call: 1 (800) 424-9836 or visit their Web site at www.fdncenter.org.
Their five main branches are as follows:
• New York City, 79 Fifth Avenue, (212) 620-4230
• San Francisco, 312 Sutter Street, (415) 397-0902
• Washington, D.C., 1001 Connecticut Avenue, N.W., (202) 331-1400
• Cleveland, 1422 Euclid, Suite 1356, (216) 861-1933
• Atlanta, Suite 150, Hurt Bldg., 50 Hurt Plaza, (404) 880-0094
♦ Local Public Library. Most public libraries have all the basic texts. Two main texts are: The Foundation Directory and the National Data Book of Foundations.
♦ Foundations themselves. Once you have targeted a foundation, always request a copy of their latest annual report and guidelines for grant applications.
♦ The Internet. Most foundations maintain their own Web sites; you can discover a wealth of information right there. Often they list an e-mail contact for correspondence. More and more foundations are accepting electronic applications. Check out the Council on Foundation’s Website (www.cof.org), which contains a wealth of information on its two thousand-plus members. Also, see the Bibliography for a list of Internet sources for doing research.
♦ Fast Forward and Record. Yes, watch PBS for any programs that are similar to yours (or rent them), then record the end credits that list all the funders! These are probably the same national and local foundations that will have an interest in your project.
♦ Professional Journals. Both in your topic area and in film/ video. Watch for other projects and see where their funding is coming from.
♦ Network. Start going to as many places as you can where other filmmakers and people in your topic interest gather — parties, cafes, conferences, workshops. These gatherings offer great opportunities for up-to-date information on funding patterns.
How to Approach Foundations
After doing all the research possible and discovering everything there is to know about the foundation (and about your project), try to make an in-person meeting or at least a phone call with the appropriate program officer. If at all possible, avoid having to write an initial letter of inquiry before that personal contact — letters of inquiry make it too easy to be rejected. After that, complete whatever paperwork the foundation requests, which usually takes the form of a full written grant proposal.
CORPORATIONS
Upside: Corporations have many doors to walk through including:
• corporate foundation office
• the CEO or CFO office
• advertising and marketing departments
• community relations, public relations
• human resources
• employee-designated contributions
This is a good environment for entrepreneurial filmmakers. Contributions can be made rather quickly. Contributions can come in the form of money, goods, and/or services.
Downside: It is very hard to do research on corporate funding (at least for corporations without official foundations). Corporations are much more interested in “strategic investments” than in pure donations, so the filmmaker’s project usually has to provide an advertising, public relations, or promotion benefit to the company. It helps tremendously to have a personal connection, or someone who will provide entrée.
How Do I Do the Research?
♦ Foundation Records. If a corporation has its own foundation, then you can follow the instructions for private foundations above.
♦ Newspapers. The other best source for information is the business section of your local newspaper (and national publications like the Wall Street Journal). The newspaper provides great leads on the current fiscal condition of companies. Do not approach a corporation, for instance, at the end of a very bad earnings quarter.
♦ The Directory of International Corporate Giving in America — available in most libraries.
♦ Standard and Poor’s — Register of Corporations, Directors and Executives.
♦ Magazines: Fortune (see their annual “Fortune 500 List” issue, also available on their Web site), Advertising Age, Forbes, INC, Fast Company.
♦ Internet. Find the corporation’s Web site and see if there is any information about applying for donations.
♦ Annual Reports. A good way to find out what the corporation is interested in, its fiscal viability, and whether or not it has a department concerned with community affairs.
How to Approach Corporations
For corporate foundations, use the same instructions as for private foundations. In all other instances, you will need to identify the right person in the right office first (e.g., CEO, Director of Marketing, Employee Contributions Representative). Be prepared to tell the corporation exactly how it will benefit from being associated with your project (this usually translates as a strong correlation between your audience and the demographics and/or psychographics of their customers). Provide whatever written materials they might request (sometimes a short letter with a budget, sometimes a full-blown detailed proposal).
SMALL BUSINESSES
Upside: They are everywhere and are very easy to approach. Little or no paperwork is involved, and there are rarely any reporting requirements. Contribution decision is made very quickly — in a matter of days or weeks. Little or no research is necessary.
Downside: Small businesses rarely give money. They are much more likely to provide donated goods and services (free pizzas for the crew, free use of cell phones, free photocopying). Donations are usually modest. Giving is often based on a strong community connection to the project.
How Do I Do the Research?
♦ Chamber of Commerce. Check for their list of members.
♦ Business Journal. Subscribe to or locate your city’s edition.
♦ Clubs and Associations. Attend meetings of the local Rotary and Kiwanis Clubs.
♦ Local Television. Watch late night TV to see who advertises.
♦ The Better Business Bureau — a good place to check references.
♦ Snoop. Walk around your neighborhood. Make notes about local businesses and visit them to introduce yourself.
♦ The Yellow Pages. Let your fingers do the walking.
How to Approach Small Businesses
The personal approach works best. Contact the business by phone or in person to find out who to “ask,” and be prepared to hand over a short document with:
• A very brief description of the project with information on your crew.
• The benefit to the donor. This could be in the form of free publicity through a credit in the film and/or on its packaging, free copies of the program, or an invitation to a local premiere where the business will be thanked in public.
• The types of goods/services you are requesting (e.g., three free lunches for a crew of ten, twenty copies of a sixty-page script).
• Local references.
OTHER NONPROFITS
Upside: There are some niche pots of money available from organizations and agencies in increasing numbers. Often these are very localized and emphasize a larger number of small grants.
Downside: No long tradition of funding, so research can be difficult, especially as new sources crop up.
How Do I Do the Research?
Ear-to-the-ground, plus all other methods recommended above. In this arena, professional journals are a key source of information. Some agencies that fit in this category include:
♦ Religious Denominations
♦ United Way
♦ Independent Television Service-ITVS (an agency under the wing of the Corporation for Public Broadcasting)
♦ Foreign television stations (e.g., Channel Four in Britain, Canal+ in France, ZDF in Germany) who are interested in co-productions
♦ Foreign governments with grants for co-productions that take place primarily on their soil and/or with local talent
♦ Fraternities and sororities
♦ VFW, Knights of Columbus, Lions Club, Rotary International
How to Approach Other Nonprofits
The approach will vary in this arena from donor to donor, so there are no pat rules. Foreign entities, for instance, almost always will need to be contacted in person, which makes this type of funding very difficult. ITVS has printed guidelines available on its Web site (www.itvs.org). ITVS has become a key source of funding for independent projects of an alternative nature intended for television. You will find a sample ITVS grant proposal at the end of the book. Churches and other nonprofits will need to be researched and approached on a case-by-case basis. Nonprofit service organizations might make an outright donation, or want to make pre-buys of your program as benefits to their members and/or for fundraising purposes.
MIXING IT UP
Once the filmmaker has a grasp of the full universe of potential support, the next question is “What mix of fundraising support is the best for me and my project?” A fundraising plan has to be created because no one has the time and the energy necessary to pursue all avenues of possible support. There are some quick guidelines that can help the filmmaker with this issue. The first is to realize that some projects are just more naturally appropriate for some types of support. The second filter is to realize that some filmmakers are more naturally predisposed and skillful at certain types of approaches — these filmmakers are great schmoozers, or wonderful grant writers, or great at working with community members.
With regard to the right “fit” for your project with funders, here is a loose overview:
♦ Documentaries. Social issue documentaries enjoy the broadest possible avenues of support — appropriate for almost every type of fundraising.
♦ Independent dramatic features and shorts. Best bets are individuals approached one-on-one or in fundraising houseparty settings. Occasionally noncommercial features can find grant support from foundations and government agencies, but usually only if there is a social issue involved. Corporate support might be forthcoming if there is product or audience crossover within the interests of the business.
♦ Experimental or “personal” work. Video art and experimental films have very limited avenues of support — just a handful of private foundations and a few government agencies. These works rarely receive support from corporations or small businesses. Individuals can be a good source of support, but there usually has to be an already established connection between the filmmaker and the donor.
♦ Animated films. Very few funders are interested in animation as an art form. If the animated film has any type of “message” or can be used in an educational setting, then funding can be found through all appropriate channels. If the animated work is primarily entertaining and/or personal or experimental in nature, then the filmmaker can look to a few government and private foundations, and perhaps individuals.
Later in this book I will be discussing in more detail the specifics of making each approach more effective. This will help the filmmaker decide which approaches are more suited to her skills, her project, and her resources (time, money, and volunteer support). For instance, the documentary filmmaker might end up deciding that for her one-hour program she will try to pursue the following mix of support:
• 50% from three or four private foundations
• 20% from state humanities councils
• 15% from four fundraising houseparties
• 15% from individuals through an Internet letter-writing campaign
Whatever mix chosen, try to pick one that has a high probability of success for you and the project. Sooner or later the filmmaker will have to present this fundraising “plan” to potential donors who will want to feel that it is plausible. More important, sooner or later the filmmaker will actually have to traverse this road toward a goal of adequately funding a project.
FOR-PROFIT
The one area of fundraising that I do not cover in this book is the whole world of for-profit investments — support that comes to your project but is not a tax-deductible charitable donation. These major sources include:
♦ International Pre-Sales: Usually brokered by an International Sales Agent/Company. A good place to research what foreign broadcasters are looking for is the annual European Documentary Network’s Financing Guide (www.edn.dk).
♦ Gap and Supergap financing: Typically, a bank loan in the amount of 10% - 30% of the film’s budget.
♦ Federal and State tax incentives: These are offered federally and on a state-by-state basis and can change annually. There are professionals who specialize in assisting with this.
♦ Deferments: If your project does indeed look like it can make a profit, it is not unusual for the producer and/or cast members to defer all or part of their fees (usually to be recouped ahead of all other financing).
♦ Equity Investors: This can be single or multi-source and you’ll need a good lawyer to put together all the appropriate paperwork. The rules for how you can approach and involve equity investors vary from state-to-state.
♦ Postproduction House Investor: Sometimes you can get a post- production house to “invest” part or all of its services.
♦ Sponsorship and Product Placement: A sponsorship involves providing logo exposure outside of the film for a company, and product placement entails featuring the product directly in the film.
To pursue most of these you will need a good entertainment attorney and/or accountant. More and more filmmakers are mixing nonprofit and for-profit sources of support. Innes Smolansky is a lawyer who has worked with many independent filmmakers. As she notes: “Traditionally, independent feature films were funded with investments or loans and independent documentaries were funded with grants and donations. Today we see more and more combinations of the two types of funding in the same project.” Here is Innes’ simple road map to keeping your options open for different kinds of funding:
ROAD MAP TO MIXING DONATIONS & INVESTMENTS
• Incorporate. A limited liability company (LLC) is considered to be the most popular and convenient legal structure through which to fundraise and produce a film. While other for-profit structures may be considered, creating and producing a film through a not-for-profit 501(c)(3) corporation will limit your ability to attract both investments and donations for the same project.
• Create a Budget. Before you start fundraising, have a clear understanding of your budget needs. Have a Best Case Scenario Budget and a Worst Case Scenario Budget.
• Identify Your Funding Options. This is often an ongoing process, but try to identify the big categories, for example: private loans and equity investments from friends, family and co-producing partners; donations from private individuals and grants from various granting organizations; pre- sale of some media rights, etc. Except for donations, all the funds that you raise should go directly into your LLC, but to receive donations you need a Fiscal Sponsor.
• Find the “Right” Fiscal Sponsor. You should identify a not-for-profit 501 (c) (3) organization that has a logical connection with your project. This usually means that one of the purposes of a fiscal sponsor’s existence must be to support audiovisual projects, or a cause that your film falls under.
• Channel the Funds. All the funds you raise as donations from private individuals or grants that require a 501(c)(3) organization to receive them should be channeled through your fiscal sponsor. The donor or granting organization should send the funds directly to the fiscal sponsor, clearly identifying for which project the funds are to be used. The fiscal sponsor will deduct an administration fee (usually between 5% and 12%), and transmit the rest to your LLC. The donor will receive a receipt from the fiscal sponsor for making a tax-deductible charitable donation. You can then use the funds received from the fiscal sponsor for production of your film and keep your portion of the profits should your film turn out to be profitable.
—Innes Smolansky, Esq.
