Nonprofit Fundraising Basics

• Stating why the funds are needed now
• Explaining what the money will accomplish
• Telling whom the funds will benefit

• Set forth a compelling statement
• Identify the right prospective donors
• Create a strategy for approaching those donors
• Assemble a team well equipped to execute the strategy

Types of Fundraising

• Grants: Grant money consists of billions of dollars distributed by the U.S. government, state agencies, corporations, and foundations to nonprofit organizations, as well as to individuals and businesses that meet certain criteria. These funds, which are awarded without the expectation of repayment, are typically obtained through long grant application or proposal processes. Successful grant seekers follow submission guidelines expertly and communicate their needs compellingly. For a detailed overview of grant writing strategies, see the Quamut guide to Grant Writing.
• Earned income: Many nonprofit organizations, such as Goodwill Industries, generate income to support community initiatives through the retail sale of goods and services. More and more charities are considering the business model amid heightened competition for donations and the increasing prevalence of MBA-holders in the nonprofit sector. Organizations that consider this route to revenue must carefully consider the operational, staffing, and competitive issues inherent in doing business.
• Donations: Individual donations are the third major source of funds. Individual donations include all of the funds that charitable organizations generate by asking individuals to support causes. This includes revenue from special events, direct-mail campaigns, door-to-door canvassing, auctions, telemarketing, and more.

Tips for Soliciting Donations

• Ask in person: Asking a prospective donor for funds in person demonstrates the seriousness of your request and is harder to dismiss than a form letter sent by mail. It also makes the request interactive: you are there live to respond to objections, answer questions, and encourage the person to make a pledge.
• Start with those closest to the cause: Rather than cold-call people with no discernible connection to the cause, start with the organization’s volunteers, board members, even the constituents it serves. For example, library patrons are a natural fit for library fundraisers.
• Present a vision that packs emotional punch: Don’t depress potential contributors with detailed descriptions of the social ills plaguing your community. Instead, use the problems as a launching pad to present the exciting future your organization (with donors’ help) can create.
• Set a good example: People are more likely to give if the person asking is enthusiastic about the request. If you’re genuinely interested in the cause and involved with your organization, your appeals will be more informative and compelling. Having made a financial commitment to the organization yourself also makes your fundraising request more credible and persuasive.
• Do your homework: Researching prospective donors is a wise use of time—it keeps you from wasting time trying to woo donors who are unlikely to support your cause. Try to assess both a potential donor’s wealth and her history of charitable giving. For some high-end fundraisers, you’ll need to do significant research to qualify prospects. Try the following resources:
  • Property records (on your county tax assessor’s website) offer insight into potential donors’ wealth.
  • Public companies’ proxy statements, found at www.sec.gov/edgar.shtml, list executive salaries.
  • The website www.opensecrets.org compiles data on political contributions.
  • Other nonprofits’ annual reports often list past donors to those organizations.
• Use technology: Fundraising management software packages, such as DonorQuest, PledgeMaker, and The Raiser’s Edge, can boost your fundraising efforts’ effectiveness by helping your staff track data, generate reports, make projections, and develop deeper relationships with donors.
• Get outside help: Carefully screened outside con­sultants can enhance your organization’s efforts.
• Focus on donor benefits: Attracting corporate donors is increasingly difficult because of widespread focus on return on investment. Even where charitable giving is concerned, more and more companies view donations primarily from a marketing and public relations per­spective. Corporate donors want nonprofits to show them which new audiences their donations could bring them into contact with and how nonprofits will help them make a strong impression with those audiences.