“Cash is King,”You hear them. Because funds are essential to the survival of nonprofits and enable them to fulfil their missions, they will have to raise funds sooner or later. This is something we can all probably agree to.
We have been blessed. We can’t complain that Americans donated a record $306.4 trillion to non-profit causes in 2007. The 2008 level of charitable giving will be even higher. It is an incredible record of generosity, unmatched anywhere else in the world.
Yet, too many non-profit organizations are struggling to make ends meet on a shoestring budget. It begs the question: why can’t charities raise more money in such a wealthy country?
These answers do not require rocket science or magical mystery. They are just a matter of common sense. “out there beyond our control.”Nonprofits have to take full responsibility, even though it can be difficult medicine. This is akin to Abraham Lincoln telling us that everyone above 40 has responsibility for their own faces. The bottom line is that our lives are up to us. We make choices and nonprofits make choices that have consequences. Answers to the fundraising question can be found in simple things that many nonprofits fail to do.
Again, the question is why nonprofits don’t raise more money. Because they…
- Don’t ask.It’s amazing to realize that nonprofit leaders don’t ask for help. While they may be nice people, they do not pull the trigger. Many major donors who have been in the field for a long time tell of stories from organizations they were interested in but did not approach them to support. The nonprofit may have indicated it was interested in help. Or the CEO might have entertained the potential donor. “Will you help us with a gift of X amount?”Because it did not request, the nonprofit didn’t have to.
- Don’t develop a plan.A plan is an outline of a strategy to help raise funds. It’s a detailed plan that you create. It doesn’t matter if the economy is in boom or slump. Yes, people will tighten their belts during bear markets and give less. One thing that we have found over time is this: Fundraising success for nonprofits is not about how well you plan or the economic effects of your plan.
- As the chief fundraiser, don’t ask your CEO to get involved.Donors desire to know the person in charge of spending the money and finishing the project. The CEO is the best person to help them meet their visionary leader. Amazingly, you may find nonprofit CEOs in all communities who don’t mind fundraising. A campaign can be run by staff or volunteers without the involvement of the chief executive officer. This is only possible if a volunteer or staff member acts as a surrogate leader. Even then, the chance of a successful campaign is reduced if the CEO does not participate or withdraws.
- Do not build relationships with constituents.Nonprofits that are struggling to raise funds often ignore the most basic law of fundraising, which is get to know potential and existing supporters. They want more from their favourite nonprofits than just results. They desire an emotional connection, involvement or connectedness, and maybe even affirmation. They want to feel part of something important. This is often missed by nonprofits, who make a big deal about themselves but fail to appreciate the accomplishments and the hardships of their donors. It would be a good idea for non-profits to get to know their supporters’ needs and values. Money is not the only thing that matters.
- Do not build relationships with the right constituenciesAround 80% of the funds you receive are usually from 20% of your donors. This old rule is now 90/10. Direct mail, email blasts and phonathons are not the best sources of funds. The majority of funds that your non-profit could use won’t come from foundations or businesses. Many of the funds your nonprofit needs are available to families and individuals of greater net worth. These people have real priorities, real problems, and real potential. En masse approaches don’t work. Make an effort to get to know them.
- Do not engage members of the governing boards in actively networking for, fundraising, or promoting your organization.Fundraising activities without trustees are impossible if they have one hand on the reins. Directors or trustees are required “Give, get, or get off.”When they hire board members for non-profits, they aren’t being mercenaries. “Work, wealth, wisdom, and witness”Keep that in mind. Although being a trustee can be an honour, it is not what the appointment really is. Trustee status requires that you are willing to volunteer your time, support the nonprofit and share professional and personal knowledge. Non-giving boards that aren’t involved in fundraising can lead to organizational collapse and disaster.
- Do not spend money on raising money.Fundraising campaigns cost between 5% and 12% depending on whether they are budgeted or include in the funds raised. As a maximum limit, 35% is set by the Better Business Bureau. A plan is required to help the CEO raise funds. Nonprofit boards cannot raise funding without making investments in staff development, professional counsel and in plans. The bottom line is that non-profit boards who are unable to afford to fundraise soon will not be in a position to do so.
- Do not recognize competition.The United States has 1.5 million non-profit organizations working on public, religious, educational and humanitarian causes. The National Center for Charitable Statistics reports that this number has increased by 36.2% over the last ten years. While a non-profit can expect to reach a wide audience for its appeals for help, it must also compete against other similar charities. As with any endeavor, this pressure puts on non-profits to stand out and clearly state what distinguishes them. If they do not, they will soon. “a day late and a dollar short.”
- Don’t develop excellent programming.Everyone can imagine a poor organization that survives. But quality does matter. Higher net worth potential donors are particularly affected. These people can afford quality and are able to purchase it regularly in their lives. They expect the same in organizations that they support. Nonprofits who use lack funds as an excuse to not be excellant create their own self-fulfilling prophecies. It doesn’t matter what the funds of a nonprofit are, they can still accomplish whatever it wants to. It is impossible to justify a lack of excellence. At least, it’s not something that a prospect donor will allow.
- Talk about their desire for more money only.Nonprofits that are only interested in acquisition quickly find themselves isolated. However, this doesn’t mean that you shouldn’t ask. The point is that donors desire more than just an offer. This is where we return to relationships and vision. Diffuse the vision of potential donors and donors. Speak about solutions, plans and successes. Tell potential donors how your donation will help. Funds will be raised if there is hope for better.
- You don’t need to have an impeccable track record.You can lose trust and support today, but you cannot lose it tomorrow. If a nonprofit is found to have misappropriated or misused funds, it can be difficult for them to raise money. Put in place highly accountable and accessible financial and operational systems. Never be ashamed. Ooze integrity.
- You don’t know the importance of fundraising consultants.Fundraising consultants can’t often, ethically and practically, act as conduits for wealthy donors. Name-dropping does not work. Consultants cannot guarantee success in fundraising. Experiential fundraising consultants can assist nonprofits with identifying issues and putting together a strategy for growth. They also have the ability to encourage and partner with nonprofit leaders and increase their productivity. Coaching is a key part of the success stories in politics, business, sports, and other areas. The best people want to do well, and they seek out the help of coaches. Nonprofits should do the same.
- Recognize that they don’t have a mission.Some nonprofits are out of use and wise donors can often see this, before board members or staff acknowledge it. It’s because donors aren’t as likely to give their money for lost causes and have less stake in the organization than those working within it. While it is not always easy for a nonprofit you love to go, that should be done. This natural process can be facilitated by donors withdrawing their support.
The times, the economy-circumstances can affect a nonprofit organization’s ability to raise funds. But, most importantly, they can’t raise as much money for things that aren’t done.
This is good news. The nonprofit can raise more money if it chooses to do so. You can help your nonprofit raise more money if you take certain steps. Don’t be discouraged. It is possible to attract more funds for your mission. You have the option to choose.