Nonprofit Fundraising 101
The Complete Guide to Raising Money for Your Nonprofit
A strong fundraising strategy is the backbone of every nonprofit organization.
As the sole source of incoming revenue for nonprofits, donations make it possible for you to spread the word about your organization and fulfill your cause.
The more donations you receive, the greater the impact you can have. But asking for money from strangers can be hard – and maintaining a constant flow of donations is even more difficult.
So what are the best strategies for asking for donations? And how do you maintain positive relationships with donors?
In this comprehensive guide, we cover everything you need to know about nonprofit fundraising so you can start to raise more money, scale your organization, and grow your impact.
Table of Contents
- Why is Nonprofit Fundraising Important
- Getting Started – The Basics of Nonprofit Fundraising
- Nonprofit Fundraising Strategies
- Nonprofit Fundraising Tips
- Additional Nonprofit Fundraising Resources
Why is Nonprofit Fundraising Important?
Fundraising is the process of asking for donations from individuals, companies, and foundations. Nonprofits rely on donations to fund projects, supplies, campaigns, and everyday expenses, from utilities to payroll.
Clearly, donations are important for keeping your organization afloat. But the benefits of fundraising expand way beyond covering your costs. An effective fundraising strategy allows your nonprofit to:
- Raise awareness about an important cause
- Give legitimacy to your organization
- Attract attention from foundations and other institutions that may award grants
- Build an extensive list of donors who will attend future events, spread awareness, and contribute repeatedly
- Foster relationships with major donors
- Fund large projects and research initiatives
With a smart fundraising strategy in place, your nonprofit has the potential to engage the masses and grow your impact on a local or global scale.
Getting Started – The Basics of Nonprofit Fundraising
What Inspires People to Donate to Nonprofits?
Before you start reaching out to potential donors, you need to know what inspires people to give to nonprofits in the first place. Understanding people’s primary motives for donating will help you craft messages that resonate.
- Altruism: The desire to help others is one of the most compelling reasons people donate. Some people may feel drawn to local causes, while others prefer to give to larger, international nonprofits.
- Internal Satisfaction: Let’s be honest – most people give to nonprofits because it makes them feel good! Giving money to people and communities in need naturally makes people feel good about doing their part – and in turn, will likely motivate them to donate again in the future.
- Societal Expectations: Individuals may feel compelled to donate to a nonprofit if they see their family, friends, or coworkers doing so.
- Personal Connection: People often give to organizations that they feel a strong personal connection to. For example, someone whose life has been affected by cancer will be more likely to donate to an institution that funds cancer research.
- Tax Incentives: Nonprofit donations are sometimes tax-deductible, which motivates many people to give. Tax incentives usually aren’t the primary motivator for giving, but it can be a nice perk for donors who give a large sum of money to nonprofits.
- Impulsivity: Some donors will act on an impulse to give to a nonprofit. Certain donor demographics, like millennials, are more likely to donate on a whim.
What Resources Do You Need to Start Fundraising?
Before you’re ready to start receiving donations, you’ll need to lay out a fundraising plan. Make sure you check these action items off your list before setting up a fundraising campaign.
Set a Financial Goal
Having a targeted fundraising goal in place will help you strategize the best methods for raising money. It’ll also motivate your staff members and volunteers to stay on track when they’re working toward a common goal.
Create Marketing Assets
Before donations can start flowing in, you’ll need to get the word out about the amazing work you’re doing. You can create traditional materials like flyers, pamphlets, and banners to promote your nonprofit in a local area. Or you can opt for digital marketing strategies such as emails and social media to spread the word to more people. Using a combination of traditional and digital marketing can also be a smart option.
Set a Budget
It takes money to raise money, so you’ll need to create a budget. Include categories for staff, marketing materials, nonprofit software, and any other tools you may need.
Get Started on a Nonprofit CRM
Keeping a database of prospective and current donors is essential. And while basic spreadsheets might cut it at first, you’ll probably want to invest in a nonprofit CRM to manage your contacts as your organization grows. Nonprofit software can help you communicate with donors, market your nonprofit, and understand donor history to raise more money.
Track Important Metrics
A data-driven fundraising plan will help you keep track of what’s working and what’s not. It’s a must for learning donor habits, increasing retention, and replicating past successes. A few key metrics you’ll want to track include new donors, donor retention rate, average gift size, and donor lifetime value. Many nonprofit software platforms offer built-in analytics and reporting tools to make this part easy for you.
Build up a Volunteer Base
Start building up a community of volunteers you can call on to help run events and support day-to-day activities. Volunteers provide the extra hands you need to collect donations during auctions or fundraisers, answer the phone, or go door-to-door during fundraising campaigns.
Create a System for Donation Receipts
Donation receipts are written acknowledgments that a charitable contribution was made. In the U.S., donation receipts are required for any monetary contribution greater than $250. But in general, it’s best practice to always send a donation receipt. Proactively sending receipts is key to building long-lasting relationships with your donors. Instead of doing them manually (yikes), you’ll want to invest in a platform that automatically sends donation receipts for you. Once you have these resources and processes in place, you’re ready to start asking for donations.
Nonprofit Fundraising Strategies
During the pre-internet days, nonprofits were limited to taking donations by cash or check only. But today, anyone can pick up their phone or computer and donate with a few clicks. This means you have more options than ever when it comes to accepting donations.
Here are four of the most popular and effective nonprofit fundraising strategies.
Online donations are contributions that are made through a nonprofit’s online donation page.
Online fundraising is becoming increasingly popular, as it allows your nonprofit to accept donations from virtually anywhere. And it’s the preferred method of giving for donors, too. Today, 54% of donors prefer to give online with a credit or debit card.
To set up online donations, you’ll need to create a donation form on your website. You can build a donation form in-house if you have a web developer on staff. However, tons of tools exist that offer pre-built features to help you create a simple, attractive donation form.
- Make sure donors can easily find your donation page. Feature it prominently across your site and include a clear CTA such as “Donate Now” so they know exactly where to go.
- Keep your donation form simple. Only include the fields that you absolutely need to capture, and make sure everything stays on one page so donors don’t have to click through multiple pages.
- Integrate your form with a payment processor to ensure donations reach your account quickly and reliably. Stripe and Paypal are two popular nonprofit payment processors.
Event donations take place during a fundraising event such as a charity auction, gala, or walkathon.
These contributions can take many forms. For example, people might donate by bidding on an auction item, or by stopping through a donation both.
Hosting an event can be an impactful fundraising strategy because it encourages a large group of people to donate all at once. Many nonprofits host multiple events throughout the year to reach their fundraising goals.
- Choose the right kind of event for the size of your organization. If you’re a smaller, lesser-known nonprofit, it wouldn’t be smart to host an extravagant gala. Start small and plan an event you know you can afford and get people to attend.
- Offer multiple payment methods. If you plan to set up a booth or table, get your hands on a credit card reader so donors can contribute even if they don’t have cash. If you want to give people the option to text in donations, invest in a mobile giving platform.
- Make live announcements during the event to remind donors of their options for donating. Make sure attendees know where your donation table is, or give them a phone number they can call or text to donate.
Some donors elect to make regular contributions, known as recurring donations. These are often monthly or quarterly donations, but can be made as often as weekly.
Recurring donations allow donors to automate their contributions to organizations they want to support long term and can be made through check, text-to-give, or through an online donation page.
The best way to encourage donor retention is to set up your online donation page to receive recurring contributions. Using donation software like Keela makes it easy to schedule monthly or quarterly donations, so donors can set up payments once and not have to worry about coming back again and again.
- Offer multiple donation schedules. Not every donor will want to give monthly, and some will want to give more frequently. Make sure they have several options to choose from.
- Include a message on your donation page that explains the significance of recurring donations. If potential donors understand how their recurring contributions will positively impact the work you’re doing, they’ll be more likely to check that box.
Major gifts are substantial contributions that are typically made by individuals with a close connection to the nonprofit.
How you define “major gift” will depend on your nonprofit’s size and fundraising history. A small nonprofit might consider $2,000 a significant donation, while others would need a donation to be over $10,000 to define it as major.
Donors often feel compelled to give major gifts to charitable organizations because they receive tax benefits. But no matter the reason, major gifts are beneficial for both parties.
- Carefully research previous giving patterns and donor behavior before asking for large gifts. If you ask for too much, you risk insulting your donor. If you ask for too little, you might be leaving money on the table.
One way to pinpoint which donors are most likely to contribute large gifts is by using Keela’s Donor Score. It calculates a score for each contact based on their total amount of donations, the number of years they’ve been contributing, and whether their donation amount has increased over time. Armed with this data, Donor Score identifies donors who are most likely to respond to your fundraising efforts and give more generously.
- Form a major donor club to give those donors special status and show that you value their contributions.
Nonprofit Fundraising Tips
After you get individuals or organizations to donate once, how do you ensure they become repeat donors? Follow these tips to communicate with donors and keep them engaged with your organization:
One of the biggest reasons people won’t make a charitable gift is simply because nobody is asking them to! Stay active on the communication channels your donors are hanging out on, such as email and social media. Don’t be afraid to ask donors for donations, but make sure to mix your asks in with other content they’ll find valuable, such as weekly newsletters and blog posts.
According to one study, 59% of donors give to an organization because they’re passionate about the cause. Don’t be shy when it comes to spreading the word about the work you’re doing! Use photos, videos, and testimonials to show the impact of your mission and get donors emotionally invested in your cause.
Segment Your Donor List
Donors want to receive messages that are relevant to them and their history with your nonprofit. Segmenting your contacts into groups allows you to send personalized content that is more likely to encourage donations. You can segment your audience by:
- Giving preferences (dollar amount, frequency, etc.)
- Communication preferences
- Event attendance history
- Business affiliations
Remember, your donors are trusting that your organization will use their money wisely. Keep them in the loop on all fundraising initiatives, past campaigns, and future plans so they can see where their money is going. One tactic for keeping donors informed is sending a monthly newsletter. You can recap last month’s activities, call out exciting news, and share upcoming events to build trust and nurture those relationships.
Share Success Stories
Keep your donors informed about the positive impacts you’re having in the community. Sharing positive stories from your past campaigns fosters good feelings and shows donors that their gifts made a difference. When donors feel appreciated and see the impact of their donation, they’re much more likely to give again in the future.
Additional Nonprofit Fundraising Resources
Looking for more secrets to help you refine your fundraising strategy? Check out these popular blogs!