Nonprofit fundraising is a complicated topic and a critical function. Nonprofits are in a unique position from businesses in that they cannot price their products and services to, well, make a profit. Operating budgets must be conceived from other sources than program revenues.
This is a guide focused on fundraising for nonprofits. It will discuss the following major topics:
1. Crafting a nonprofit fundraising strategy
2. Optimizing your organization
3. Kickstarting your donor development
4. Developing your marketing campaign
5. Leveraging grants and other funding opportunities
Before we begin, here is a brief background on funding.
How are nonprofits funded?
The following categories make up the bulk of funding for nonprofits:
- Fees for Goods/Services from Private Sources – this is driven largely by hospitals and higher-education nonprofits who charge fees for services, tuition, etc.
- Fees for Goods/Services from Government Sources – includes things like Medicare and Medicaid reimbursements
- Government Grants – cash awarded to organizations with varying stipulations attached
- Private Contributions – charitable donations and grants from private individuals, corporations, etc.
- Investment Income – endowments make up a significant portion of income, especially among foundations
Where do donations come from?
Private contributions make up the largest portion of non-program-related revenue streams for nonprofits. These donations totaled $373.25 billion in 2015.
Of this amount, 71% came from individuals, while the rest came from foundation grants, bequests and other corporate philanthropy.
While this represents enormous potential, it brings even more enormous challenges for nonprofits looking to focus marketing and fundraising strategies on specific channels. The need for personal touch with most individual donors makes it hard to scale funding strategies focused on individual donors.
Craft the perfect nonprofit fundraising strategy
Any successful initiative requires a plan. To maximize your organization’s potential, it is important to understand where you are today and define specific paths to where you need to be in the future. A useful strategic plan for your fundraising function will provide a sense of direction for your organization and outline measurable goals to assess progress.