Nonprofits
Your Fundraising Needs to Change Now
The author submits that focusing on individual donors may yield the most return
State incomes have declined and social services are being cut to meet budget gaps. Foundations lost $150 billion last year–that’s more than foundations gave out in the last four years combined. Many of the biggest corporate givers–Citigroup, JP Morgan, Wells Fargo–are in financial distress. Giving by high-net-worth individuals is down because their assets are down. This is a dire snapshot of the fundraising market that nonprofits face.
The only giving that is expected to remain unchanged is giving by individual donors who give from income. Individual giving has increased every year despite recessions.
These were some of the key points made by Curtis Chang of Consulting Within Reach, at his seminar I attended yesterday with nonprofits and funders in the Silicon Valley area. Nonprofits are facing an ecological shift in donors. To survive, nonprofits need to lessen their fundraising focused on state, corporate, foundation and high-net-worth individuals giving, said Curtis. And they need to increase their focus on development staff and marketing appeals to target middle class individuals.
This requires a whole new set of capacities that need to be built to reach individual donors. Curtis shared this graphic with us:
State/Corporate/Foundation Fundraising Model
Appeal: innovation/social impact
Content: hard data
Communication: grant writing
Tracking: annual
Key Contacts: program officers
Individual Fundraising Model
Appeal: brand experience
Content: emotional stories
Communications: marketing
Tracking: continual
Key Contacts: social connections
I agree with many of Curtis’ points, especially the need these days to focus on individual donors. I think there is one missing piece in this, which is to cultivate volunteers as well as individual donors. Research shows that 50 percent of volunteers end up donating to the nonprofits as well. This is a spectacular conversion rate and much better than any direct mail or Facebook solicitation. If nonprofits can convey the stories, the emotional experience, and rewards of being part of their cause, donations will follow.
Perla Ni, founding publisher of the Stanford Social Innovation Review, is the founder and CEO of GreatNonprofits. She is also a cofounder of Grassroots.com.
Reflections on a discussion about the capacity for continuous innovation in social sector organizations.
A follow up to the recent post "Some Questions About Udacity."
From the Field Series: A living case study of Makmende, which provides women in Nairobi with coordinated walking groups.
Exploring open spaces, parks, gardens, and trails as tools for social impact.
Universities are the missing link in entrepreneurship.
For “scaling what works” to actually work, we need a new and improved version that addresses two fundamental constraints.
The more we share our data with each other inside and outside of our organizations, the more data-driven we can be in our work collectively.
There's only one bottom line. It ought to be impact.
COMMENTS
BY Anne-Marie Baker
ON May 18, 2009 12:23 PM
I agree. The current economic situation requires organizations to become increasingly efficient and creative in their development efforts. Organizations overall are seeing dramatic decreases in giving, and with the potential for caps on tax deductions for high net worth individuals, targeting middle class individuals will be important.
BY Barbara Talisman
ON May 22, 2009 04:50 AM
Perla,
Thank you for your post and sharing what you learned. It is right on target. Diversified income is fundraising 101. Unfortunately, the brass ring for non-profits are the big, one shot deals of large pots of money (I won’t call them gifts) they can obtain through foundation and corporate giving. Yet we all know this accounts for less 20% of all charitable giving in the US.
I would contend the shift should have been made long ago but the “big” money is seen in some ways as easier to obtain. And I get that. But this recession has only brought home the point of needing to diversify income sources in case one large donor walks away.
Your comment about volunteering is right on as well. People are volunteering their newly found “free” time in record numbers. If anything this is where new capacities for non-profits need to be built. We have to offer great volunteer experiences, cultivate them like any potential donor and solicit appropriately. Typically it is the cultivation and solicitation piece that is left off the table or not discussed between staff.
On the other hand individual giving does not require new capacities at a non-profit. Annual and major giving should be part of every fund development plan. However, it is the cultivation between the asks that might be need some tweaking. In this economy, if a non-profit has not been reaching out to donors regularly when not asking for money - needing help now - fast - does not resonate with donors and prospects. Those organizations who have a systematic donor cultivation program in place are able to dialogue with their donors effectively about programs, money and impact of the recession without whining.
Better to start now than never, but the times we are in are testing all of us. Priorities are be realigned for donors and organizations. For an organization to remain top of mind, a consistent message shared consistently is required.
BY Victoria
ON May 27, 2009 10:35 AM
I would love to see non-profits really start focusing on planning and sticking to them. There always appears to be some reason why they can’t stick to one. Either an event is coming up, or a board meeting, or it is time for the annual appeal, all great things but for some reason whenever something “big” is happening planning goes out the window. What I would love to see are nonprofits embrace the idea that they have a job to do, that they can plan out things, that they can have effective marketing programs and create effective donor relations programs.
I recently spoke at a conference attended by mostly small, local organizations. Many of them, had this belief that a magical grant would appear and hence they would be funded for years, I told them, that that was a myth, that the best way to really go about getting money was to plan, and diversify your funding sources. Look everywhere, and make sure your board members are doing their job.
Far to often, non-profits with amazing missions and enthusiastic staff fail to recognize what they could do if they took some deep breaths and really planned.
Victoria