By Kelsey Boudin
President and Founder, Southern Tier Communications Strategies, LLC
How effective was your nonprofit fundraising strategy in 2021? We’re well into 2022 now, and many effective nonprofit organizations have done – or are just finishing – an annual review of past strategies to adjust as necessary for the rest of the yearlong fundraising campaign.
How did your strategy look?
Did you kick ass at grant writing? Or did your grant-funding strategy result in a lot of “we regret to inform you” letters? How about your donor relations? Were you able to make strong special appeals from those in your nonprofit’s orbit with big wallets? Or did they bring only a slow trickle of revenue? Did your holiday fundraising campaign bring lots of new and repeat givers alike? Or did it fail to resonate with your target audience?
If funding was tight and successes few, you need to evaluate and evolve your nonprofit fundraising strategy.
Let’s Start Building a Winning Nonprofit Fundraising Strategy
So many nonprofit executive directors struggle with limited budgets and resources to do everything needed to raise funds. Very small nonprofits especially may have to pick and choose between contracting with that new grant writer, crafting a stronger digital media presence, managing donor relations, and more.
Of course, who has the time, right? It’s true: the year goes quickly and it always seems like that year-end campaign bites you when July 4th feels like yesterday. But if you plan correctly, you can save time and money on fundraising strategies that actually bring results.
Here are a few strategies to evolve your nonprofit fundraising strategy.
Look at Past Fundraising ROI
Certain fundraising activities, in general, have a better track record for return on investment (ROI). Let’s break it down in terms of how much investment it takes, on average, to raise $1. According to our good friends at Joanne Oppelt Consulting, the following common nonprofit fundraising tactics cost (on the dollar):
- Grant writing – $0.20
- Charitable business giving – $0.25
- Existing individual donors – $0.25
- Acquiring new donors – $1.50
- Fundraising events – $0.50 (not including labor and administrative expenses)
There’s a cost associated with every activity. You must pay the grant writer. You must pay staff to research businesses with appropriate charitable missions, and then build and nurture relationships. You must first cover the impressive spread at your annual gala before counting the loot.
We’re talking net revenue vs. gross revenue. If you spent $20,000 on a contract grant writer to raise $100,000 in grants, congratulations you netted $80,000! If you spent $125,000 on filet mignon, crystal stemware and catering (not to mention administrative time) to raise $150,000, you netted $25,000 and are probably lucky you didn’t just break even … or worse.
The community may absolutely love your nonprofit’s annual awards dinner, but it may be time to scrap it if the “juice isn’t worth the squeeze.” If your donor retention model effectively informs, involves and motivates supporters to give time and again to meet fundraising goals, keep up the good work! If your tradition of sending mailers for holiday donations is losing money on printing and postage, try something else.
Plug the Holes
If you’re not seeing fundraising results, you’re likely missing something. There’s some element of your nonprofit presence that doesn’t resonate with funders, donors and supporters. Small nonprofits especially struggle with the “Our program is amazing. They couldn’t possibly not fund us” mindset.
Of course, your program is amazing. So are the 147 other applications sitting on a grant reviewer’s desk. But what sets you apart? What makes your organization look more capable? What makes you look more in-tune to the missions and communities you serve? Perhaps, if your nonprofit fundraising strategy isn’t working, it’s actually best to look at what’s making you look incapable and less in-tune to your mission and community.
Some common shortcomings:
- No Strategic Plan – Many funders, donors and other supporters like to see there’s a well-thought-out plan in place, encompassing not only the organizational mission but also financial realities, projections, objectives and goals.
- Scarce Social Media – It’s the place where most people communicate with the world. If you’re not engaging, you’re not serving.
- Website woes – Similarly, if your website is unattractive, inaccessible and outdated, it’s the equivalent of a digital graveyard. Yes, funders and donors will check. (Helpful hint: Start with the Google Ads Grant to begin building that digital presence.)
- Poor sustainability outlook – It’s a question on every grant application. Confidence in your proposal quickly fades if your plan for future funding is essentially “Ask you for another grant, of course.”
- Administrative trouble – Yes, even organizational and Board leadership may struggle. In worst cases, you may even have a reputation for poor management. Invest in a Board retreat and/or training to realign missions and values with strategic objectives (or start from scratch and build a new Board.)
- Staffing Shortage – We recognize so many small nonprofits are tiny teams – or teams of one. You may have the best mission in the world, but it won’t get far without the personnel to launch it.
Winning nonprofits have their houses in order. Some have great resources. Others must get creative to survive. Invest in what you can, when you can, to position your organization for success.
Stay in Your Lane
Along those lines, funding may remain elusive because your organization chases money for the sake of chasing money. We see it often. A big grant opens and “LET’S GO FOR IT!” because they can … with zero consideration for if they should.
Just because the money is out there doesn’t mean it’s worth pursuing. Why? Because 99.9% of the time grant funding is tied to specific work that promises specific results. If your nonprofit is not the authority at delivering those specific results, you’re not likely to be funded and you’ve wasted time and resources.
Let’s look at some hypotheticals:
- You’re the executive director of a nonprofit serving dementia patients with at-home resources for caregivers. A huge federal grant releases an RFP to train nurses in a new model of care. The dollar signs look great. But does your organization train nurses? Do you have the authority and staff capacity to administer a training program at all? If not, don’t go for it.
- You manage a local food pantry. A grant process opens that supports pantry expansion to accommodate more food, consumers, and even some part-time staffing and administrative costs. Sound like a perfect fit? Go for it!
Fundraising is so much more than a dash for cash. Be reasonable and realistic. Be strategic. Do your research on funders and donors. There’s a ton of info out there on what funders typically support and at what level (IRS 990s are public record). It’s a far better use of your nonprofit’s time and resources to craft five strategic funding proposals than throwing 50 proposals at the wall to see which sticks.
Be Strategic to Build a Nonprofit Fundraising Strategy That Works
Nonprofit funding is highly competitive. There are more than 1.5 million nonprofits in the U.S. – many of which vying for the same support as yours.
If what you’re doing isn’t working, you must evolve. Look at what activities are bringing the greatest ROI (and remember time is the most precious resource you have). Systematically build up the areas that need improvement. Don’t succumb to mission drift by seeking funds for things you don’t/can’t do.
If you need help from an experienced nonprofit fundraising team that’ll help you be in it to win serious funding, email firstname.lastname@example.org.