“What is fundraising?” seems like a simple question, yet it is often one of the most challenging areas for young nonprofit organizations or anyone looking to raise money for their cause.
I see the results of this every day: appeal letters from organizations I’ve never heard of that don’t do much to get me excited, invitations to crowdfund projects and ideas, and requests from fledgling organizations to help them increase their grant revenue. Without asking “what is fundraising?” many would-be fundraisers jump into asking for money ill-prepared, and find themselves scratching their heads when the money doesn’t follow.
If you’ve been struggling to find funding, it's time to go back to the basics of what makes fundraising successful.
Fundraising is relationship based
Good fundraising is all about building authentic and long-lasting relationships between someone doing good work (your organization) and someone wanting to support that work (your donor). It’s the social activist donating $25 to a grassroots organization because they feel a strong connection to the work, the seasoned philanthropist writing a six-figure check to help build a new community center that will bear their name, or a foundation choosing to fund a grant application for a new program. What all these donors have in common is a strong relationship with the organization they support.
With more than 1.5 million charity organizations in the United States alone, organizations are vying for donors’ attention. The way to capture (and keep) it? A relationship that builds on the interests of donors by cultivating a genuine interest in your organization through marketing, events, and outreach and stewarding the relationship with timely updates on your work and plans for the future.
Cultivating donor relationships is the difference between “we think people will want to help our mission because they care about the same things as us” and “we think these specific funders will want to get involved with us because of their specific interests, geography, and even giving history, and here’s how we’re going to talk to them about it.”
This goes for all types of donors, whether they give $10 or $1,000,000. Individuals, corporations and businesses, and grantmaking organizations all rely on relationships drive their giving. The best thing you can do to raise more money is to focus on building strong relationships.
Fundraising isn’t a numbers game
Have you ever received a letter in the mail from an organization you've never heard of, asking you for money? Did you make a gift? The average person will ignore the appeal letter, opting instead to donate to an organization with whom they already have a relationship.
But many new organizations will, seemingly with blinders on, continue to blast out letters and emails as if they could wish a better response rate. They apply to every grant they can get their hands on, sometimes without even seeing if they are eligible to submit a proposal. They start crowdfunding campaigns without thinking about who the donors might be. They remain stuck in the mindset that “we just have to find the right donors”. They throw spaghetti at the wall and hope some of it will stick.
This isn’t how successful fundraising unfolds. The average return on direct mail to new donors is somewhere around 1%, meaning for everyone hundred letters you send you might get one donation. Email is worse with a return less than 1%! Many grantmaking organizations won’t accept a Letter of Inquiry or proposal without inviting you to submit it meaning (guess what!) they’re looking to get to know the organization before considering a donation.
You can spend countless hours writing grant proposals and creating crowdfunding campaigns, hoping for donors to materialize, but they won’t pop out of thin air. Without building relationships first, you’re just crossing your fingers hoping they’ll come. And the reality is that probably won't happen.
- 7 reasons you aren't getting grant funding
- Write a fundraising letter that raises money
- How to create an astonishingly successful fundraising plan
Fundraising is a constant learning process
Taking the sometimes daunting step from wanting people to fund your program or organization to putting the tools of a fundraising department in place can be challenging. Where do you start? It’s a constant evolution, but best practices hold true. Focus on the supporters you have and turn them into donors. If they are donors, ask them for more. Build a pipeline of prospective donors based on research, then cultivate them. At every step of the way make sure to put your mission, and your donor's relationship to it, at the heart of your work.
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