Season ending fundraisers has been enhanced by local and national giving days.  There are many reasons for why this time of year is the top fundraising season including:

  • Meeting End of Year budget needs
  • Raising funds for next year’s programs
  • Holidays brings out the giving nature of donors
  • Many nonprofits needs grow during the holiday season
  • Tax Deduction for donors

While all of these are reasons nonprofits see donations increase at the end of the year, many of these are same reasons nonprofits should fundraise all year round.  Often I speak with organizations who are brand new and they struggle with just getting started.  Nonprofits who have been around for a while wonder how to get their fundraising programs to work better.  Whether you are just getting started or working to reinvigorate your fundraising, the key is to JUST DO IT.

The circle of donors:

Nonprofit Fundraising Circle of Donors

The first donors nonprofits find beneficial are their family and friends.  Your passion for your nonprofit’s mission and vision is a compelling story.   Your script, aka your story, can be used on your friends and family first which allows you to practice, rewrite the script and have confidence when sharing with those you don’t know.  This is a personal, one-on-one ask to those you know. Take them to lunch or after dinner sometime.   This practice applies to those just starting their nonprofit and to existing nonprofits who have new Board of Directors, staff and volunteers.  This circle can be repeated once a year or more often if you have additional needs that come up.

Speaking of Board of Directors, many foundations require that 100% of the board donate to the organization. Although there is not an amount of the donation that they request be given, there is an expectation that the board of committed to the organization.  Some boards use a “Give or Get” model where directors will either give of their funds or raise money from others to give to the organization.  Successful organizations have Board of Directors that participate in all phases of fundraising including identifying donors, making asks, making connections with the Executive Director and/or Development Director, and helping with fundraising events.

Speaking of events, the next circle of folks is the Community you wish to find donors.  This can be your local geographic community, an online community or even a national campaign.  I recommend starting locally and then moving outward to expand your geographical and online areas.  One mistake I see sometimes is organizations who stick with the community they are serving rather than finding donors outside of your clients.  Clients and the people you serve should be receiving services for free and are not your best donors.  Some exceptions to this may be the friends and family of the people you serve.  Parents in a Parent/Teacher organization are good donors or extended family members of a cancer patient and their immediate family.  Otherwise, consider doing events that bring in as much of the community as possible.  Another caveat to this approach is to target your donors to those you would donate to you by creating events geared to your type of donor.  Your events will target different donors if you are helping firefighters or an opera theater.  Consider your community donors carefully and expand as you become more comfortable with reaching out to your donors.  Try not to burn out your donor community by searching out donors in a broader community as you grow.  And always remember to cultivate your existing donor base.

Small Businesses will give in-kind or cash donations.  It’s important to understand why businesses give to nonprofits and to establish relationships with this in mind.  When working with businesses learn why they want to give to you, what they have to give and their business philanthropic mission/vision statement.  Also, businesses usually use their donations as a marketing expense and not a charitable tax deduction.  This is important when talking with businesses on their benefits for donating to your nonprofit.  Businesses want exposure in the community connecting them to a cause.  I encourage businesses and nonprofits to establish long term relationships.  Businesses can help nonprofits by providing volunteers, serving as a board member, giving in-kind donations and sponsorships.  Co-branding serves both parties in meeting the needs of the community they live and work in.

There is a difference between Small Businesses and Large Corporations.  For on, small businesses can be more responsive to immediate needs of a nonprofit as they are locally owned while corporations often require a longer lead time.  Corporations have larger philanthropic budgets and rely on sponsorships of large events for maximum exposure.  These relationships take longer to cultivate and it is important to larger companies that they are working with a nonprofit that has proven success and longer standing stature in the community.  The contacts often have extensive experience in the nonprofit sector.  This can be a great resource to your nonprofit.  Some corporations will want shorter term commitments while others appreciate an longer term relationship.  Just a note that while many corporations have separate foundations, you can also work with the for-profit company.

Foundations provide grants and this is also a relationship that needs to be cultivated as well. Years ago, nonprofits would never speak with foundations.  They would write a grant and hope they got it and once they got the money, never spoke with the foundation again.  Other than private family foundations and donor advised funds, most foundations work closely with nonprofits before, during and after the granting process. Keep in mind that on average a nonprofit will only get about 20% of their total budget from grants.  Foundations require that nonprofits show they are financially successful in raising and keeping funding from other sources.  Furthermore, foundations usually only fund a nonprofit from 1-5 years of time.  Be prepared to answer questions about your board, 990s, mission and vision and programming and how successful you are in delivering your programs.  Foundations are ensuring the funds they give out will have a true impact.

At the very edge of the Circle of Donors are State and Federal Grants.  Government grants require the highest level of scrutiny from nonprofit organizations.  They must show that they can deliver on their mission goals and objectives and the reporting requirements are quite extensive including regular and ongoing status’, annual audits that costs thousands of dollars (not covered by the grant) and real world impacts in their community.  These grants can be influenced by politics and legislative changes, but are generally stable sources of funding.  Different kinds of nonprofits are more suited to state and federal grants such as health care, veterans organizations, education and arts organizations.

Regardless of where you are in your circle of donors, the important part is to FUNDRAISE NOW, even if you don’t yet have your 501c3 Tax Exempt status yet.  Never promise tax deduction to anyone as it is dependent on their personal and business tax situation.  New tax laws make it less likely your donors will even receive a tax deduction as only tax-payers who itemize deductions can receive a tax deduction and fewer people will be itemizing in the future.   So always lead with your nonprofit story and how you will make the world a better place.  People donate to causes they support and love.