Nonprofit Fundraising Challenges of Small to Mid-size Nonprofits

You may have the noblest of causes and a compelling narrative to go with it, but without funds, you will fall short of your goals. One of the main challenges of small to mid-sized nonprofit organizations face is raising and maintaining a steady stream of funds. In this article, I will be examining some of these challenges and I will also suggest some causes of action that could be taken to meet these challenges.

Maintaining a Steady Stream of Donations

We have all at one point in time come across a ‘donate now’ button on a website or have participated in an event where participants were encouraged to donate to a cause or causes. While some of these donation drives achieve their fundraising goals, there is always a sustainability challenge. It is never a guarantee that successive fundraising drives would meet fundraising goals.

How do you turn one time donations into reoccurring donations? Or how do you create a network of donors? A small to mid-sized nonprofit might not have the reach of organizations such as public radio and its ability to create sustainable donors, despite that, there are multiple means through which a they can turn one time donors into sustainable donors.
In her book ‘Fundraising for Social Change’, Kim Klein writes:

“The purpose of fundraising should not be to raise money but to raise donors. In other words, you don’t want gifts, you want givers. Nonprofit organizations that build a network of givers or donors are more likely to succeed.”

The goal of every fundraising drives should be to find sustainable donors. The goal should not to have a one time donation of $10, it should be to turn that $10 one time donation into multiple $10 donations over time. Some steps that a nonprofit organization can take to build a network or donors are as follows:

Engagement

Building a brand can be regarded as a social science because you must understand the society in which you want to create donors from. A better understanding of your society will help your organization communicate or use the sort of language that will get through and impact prospective donors. Yes, brands are conceptualize in boardrooms but they actually come to live only when society or constituents understand and internalize it. Brand building is a series of continuous reinforcements to an extent where your logo, name or organization become synonymous to what your organization stands for.

• Nonprofits must have a compelling story and long term goal that engages prospective donors.
• Your story and goal should be your brand because a strong brand is integral to successful fundraising.
• The brand should therefore be defined or viewed within your organization and the public as promises and expectations that you are striving to meet.
• Volunteers or fundraisers must be trained not only to effectively communicate but also to identify whenever the values of your organization merge with those of a prospective donors.

Identifying Sustainable Donors

It is worth mentioning that every prospective donor should be given the same attention as those most likely to become recurring donors. With that said, it is important to pay more attention to prospective donors whose values align with what your organization stands for. That means that your fundraisers should spend more time listening to their stories, empathizing and relating.

Involvement

Now that you have successfully branded and engaged prospective donors it is imperative to stay in front of them through involvement. One of the most effective ways to involve your donors is to having them visualize how their donations are not only being used but also how it is impacting lives. Take for example a nonprofit organization whose goal is to bring education to people who do not have access to it; communicating that a school was built is good but it is better to actually give names and faces of those who are benefiting from the school. It is about telling personal stories and possibly videos or pictures of certificates or diplomas earned because of donations that made it possible. They donated because they are interested in enacting change and they see your organization as a vehicle through which they can make an impact.

Recruiting and Retaining Qualified Personnel

Inexperience and High turnover in Key Positions

Based on a survey of more than twenty-seven hundred nonprofit executive directors and development directors, UnderDeveloped: A National Study of Challenges Facing Nonprofit Fundraising, found that nonprofits tend to rely on Development Directors to fundraise. Half of the Development Directors surveyed said they expect to leave their current job within two years; while 40% surveyed said they were not committed to their career. At nonprofits where the development director position was vacant, positions stayed open six months on average, while 16% of nonprofits reported that the post had been vacant for more than two years.

High turnover extends to other employees who are directly or indirectly involved in fundraising. Earlier in this article, we touched on the importance of establishing sustainable donors through continual engagement and involvement. We also stressed the importance of highly trained personnel and volunteers who do not only understand constituents but also know how to effectively communicate a brand. In the long run, ‘substantial’ donors cultivate relationships with their point of contact within the organization. High turnovers create volatility thereby threatening revenue streams needed for success.

As explained in the UnderDeveloped: A National Study of Challenges Facing Nonprofit Fundraising, oftentimes, a small to mid-sized nonprofit simply do not have the financial muscle to stop good Development Directors and other key personnel from jumping ship onto larger organizations who can offer considerably more money for their services. Not to mention the small pool of qualified candidates to replace or fill key positions

To mitigate these loses, small nonprofits could start by creating a culture of philanthropy Placing the responsibility to fundraise on just one person or to just a few, puts your organization at a disadvantage. Instead, when everyone becomes a philanthropy facilitator, turnovers no longer have the crippling impact they might have otherwise had in organizations absent a culture of philanthropy.

Lastly, to stay competitive in recruiting , nonprofits could take steps to ensure that their organization is an attractive and fun place to work. Consider offering flexible work options such as remote work arrangements. Studies have shown that flexible work environments improve work satisfaction among employees and reduce employee turnover.

Failure to Take Advantage of Technology

Nonprofits generally struggle to keep money coming in and to add new donors on their list existing donors. Technology is becoming an integral part of how nonprofits manage donor relationships. We are in what could be termed an age of information, with more ways through which prospective donors can be reached. Social media, email marketing, online fundraising, text to donate etc are some of the means through which a nonprofit can implement an effective and sustainable crowdfunding campaign.

It is vital for nonprofits to use whatever means available to engage prospective donors. Besides failure to update and modernize existing channels to keep pace with consumer behavior would likely result in your nonprofit falling short of its goals or even failing.It is imperative for nonprofits to invest in donor management systems whereby donor communication can be strategized and managed.

Failure to Plan is Planning to Fail

Having a fundraising action plan that details planned fundraising activities for a time period is equally important. As the old adage goes, ‘failing to plan is planning for failure. Nonprofits must have strategic plans that include campaign dates, strategies being used, means through which prospective donors will be reached, donor-tracking plans, planned events and definitely benchmarks for success.

The importance of a fundraising action plan can not be over stated. First and foremost, fundraising action plans get everyone within your organization on the same page. It clearly communicates to everyone involved what their role is and what is expected of them.

Currency of Trust

“One bad apple in a basket spoils the others.” The erosion of confidence or breach in trust on the part of the public vis-a-vis one nonprofit, shines a negative light over other nonprofits as well. Without public trust, nonprofits simply can’t survive. Public trust should be regarded as the currency or oxygen a nonprofit needs to survive because even the perception of fraud could take ages to repair or worse still seriously hamper a nonprofit’s ability to bring in funds. More and more donors and conducting research into nonprofits before they donate. The slightest blemish in your reputation will send them elsewhere. Hence, the need for transparency.

Sharing inspiring stories of lives changed or images of schools or hospitals built, might no longer be enough, the public and especially your donors are better served with the knowledge of what it cost you and how you got there. Donors want a clear picture how their donations made a change or is making changes.