Fundraising Strategies For Successful Nonprofits, Part 1: Donor Cultivation

12/14/2015

If you’ve read my other posts discussing nonprofits, you’ll know that I take fundraising seriously. In my opinion there is a transitionary line of demarkation between a young nonprofit and mature nonprofit, and that line is the sobering realization that fundraising is as important as serving your cause. It sounds callous, but without funding there is no nonprofit because there are no resources to serve.  Funding is what separates the effective versus the passive. Without funding you’re a group with great intentions, just spinning your wheels, not getting anything accomplished. With funding you are doing.

You may disagree that money is essential. You may say; well we have a bunch of people donating their time, can’t that be enough? And my answer is that depends on your scope. What do you want to accomplish? At some point cash comes in to play. Even if your group is just strictly serving by volunteering their time, you have to be serving something. As an example, say your group feeds folks in need. This is a great service, but funding is essential because you need to get the food from somewhere, and you need to prepare and serve it somewhere. If you’re delivering food, then you need resources to package and deliver. Whether it’s cash donations so your nonprofit can purchase the food and supplies, or it’s donated food and supplies, the point is, somebody purchased them and gave it to you.
 
This is still fundraising. The mechanism is the same. In order to GET resources, your nonprofit had to reach out to the community and ASK for resources. Your group's ability to acquire resources will determine the amount of people you can serve, and how effective your nonprofit is at contributing to your cause. It is a mature nonprofit that understands this concept, and takes meaningful steps towards developing a fundraising board. And until your nonprofit does the same, it will have limited impact.
 
Now that we’ve established the importance of fundraising, in this post (and following posts) I would like to discuss fundraising strategies that successful nonprofits use, in the hopes that some will inspire you to take your fundraising to the next level.  In my mind, a cohesive fundraising strategy has three elements. They are:
 
  1. Donors 
  2. Events and P2P
  3. Corporate Partnerships
 
As a board, I would recommend creating a fundraising committee that can work on all three simultaneously, because when done well, they will feed of each other. In this post, let’s discuss strategies for targeting donors.

Donors 

If you can only choose one fundraising strategy, I would recommend concentrating all your resources on finding and connecting with willing donors. While targeting corporate sponsors can be lucrative, and creating events does as much for community moral as it does for raising funds, establishing a strong donor pool combines elements of both. Here’s why. If you can convince someone to care about your cause enough to donate, there’s a good shot they will become an evangelist for your cause. Which means, they will spread your message throughout their sphere of influence, raising funds and creating goodwill for your cause. And that’s your ultimate goal when cultivating donors; finding folks that both give and care. Here are the steps involved in donor cultivation:

1. Identify your donor pool.

Sit down with your nonprofit board; the whole board, not just the fundraising committee, and make a list of everyone you all know who may be interested in donating to your cause. It’s important to use a contact management system to better organize your donors. Organize your donor poll into tiers based on the likelihood that they would want to donate, the likelihood that they may want to be involved beyond a cash contribution, and/or how large a contribution you think they might be able to give. This will be different for different organizations, but tiers could be based on any or all of the above. Then, add in people you may not know, but have a philanthropic reputation in your community. Again, organize them by likely contribution amount, likely involvement level, etc.
 
Next, assign each potential on your list to a board member who has the greatest chance of being able to communicate the mission of your nonprofit to the potential donor. Sometimes it may be better for multiple board members to team up on a particular potential donor, especially if the potential donation amount or involvement level is high, and that’s ok. I find that most folks take it as a sign of respect if you bring a buddy. I recommend that each board member, and each fundraising committee member commit to meeting with at least one potential donor each month. That way everyone gets in the habit of asking for money. Then, make sure each interaction is documented in the contact manager.

2. Make two personal connections.

For most people, asking for money is a bit scary, and I could spend a lot of time on steps to take to overcome this fear. But ultimately what it comes down to is practice. The first time is the most difficult, and if you can summon the courage to do it a second time, after that you’ll be a lot more comfortable. But you don’t want to lose that comfort by waiting too long between asks. That’s why it’s vital to set up at least one meeting per month.

The most important thing to keep in mind when you’re meeting with someone to ask them for money and involvement is you need to make two personal connections; the personal connection between you and the potential donor, and the personal connection between the donor and your nonprofit. The purpose of assigning donors to board members they know is to help them with the first connection. If the board member and donor already have rapport, than the personal connection may already be there.
 
People buy from who they like. A fundraising ask is really no different than a sale. At the beginning of the meeting, take some time to establish or reestablish a connection. Talk about things that matter to the potential donor, and any common attributes or goals. Next, connect the potential donor with the mission of your nonprofit. Show them how you are creating goodwill for the niche you're serving. Show them how their contribution or participation will make a difference. Your goal is to make the mission of your nonprofit so vital to the donor that they have no choice but to contribute. Then ask.

3. Sincerely Thank.

One common underdeveloped system with most nonprofits is also extremely important; donor recognition. It’s not simply enough to say thank you, though that’s a good place to start. Sincerely written thank you cards, recognition through social media, and on your website and event programs are all good to do, but will not set you apart. Think of creative ways to say thank you that are commensurate with the size of the contribution. If you have a space, give your largest donors naming rights to the facility or part of the facility. Give backstage passes to events, create a personalized thank you video, or send a gift basket. The more creative and personal, the better you will set your organization apart.
 
However you decide to say thank you, create a donor benefits system with tiers that trigger based on contribution level. Then give it to your most organized board member to manage. If you do this right, you’ll turn one time donors into life long evangelizers. 

4. Build Membership

You want your donors to feel like they belong to something that matters. Membership is a great way to cultivate this feeling. I recommend that all donation tiers, even the lowest, include membership in your organization. Building membership also implies that you have a reason to keep in touch with your donors; to keep them in the loop on events, successes, and organizations changes. I think it’s important that membership provides benefits; perhaps discount event tickets and products, or access to exclusive content. Giving benefits is another way to say thank you to your donors.
 
Successful nonprofits focus on cultivating their donor base, and just because a potential donor becomes a donor doesn’t mean the cultivation stops. It’s much easier to convince a donor to contribute again, than it is to convince someone to contribute for the first time. Make sure you follow up with your donors at least on a yearly basis to seek additional contributions. In the next post, I will discuss fundraising through events.
 
 


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