5 Fundraising Mistakes Your Nonprofit Might be Making

5 Fundraising Mistakes

The following is a guest post from our friends at CharityEngine:

When it comes to fundraising, nonprofits are overloaded with information from the internet. Some blogs say to incorporate a 5K into your next campaign while others instruct you to focus on extensive prospect research. With so much information, how do you know what to do?

The truth is, every nonprofit is different. Online guides can help you devise a plan and give you new ideas, but you have the ultimate say about whether different fundraising activities will help you achieve your desired results.

Even with all of the different guides out there and various information available, there are some universal truths about raising money.

For instance, three of the most important steps to raising money for any organization include:

  • Establishing credibility in the community to instill a level of trust with your donors.
  • Creating a well-thought-out campaign structure with effective leadership.
  • Focusing on the outcome and impact of your nonprofit.

In addition to establishing a smart plan for fundraising, you also need to make sure you’re not accidentally sabotaging that plan with common mistakes.

That’s why in this article we’ll cover some of the common fundraising mistakes made by nonprofit organizations and how you can avoid them. We’ll cover mishaps such as:

  1. Failing to establish donor/investor relationships
  2. Focusing on outputs rather than outcomes
  3. Underestimating your own fundraising ability
  4. Relying too heavily on pathos
  5. Forgetting about matching gifts

Nonprofits sometimes make mistakes. It’s easy to do when there’s so much information out there telling organizations to do different things. Let’s take a deeper dive into these mistakes so that your nonprofit can avoid them in the future.

Failing to Establish Donor Relationships

Relationships are key for sustainable fundraising. It’s far more expensive and timely to reach out and acquire new donors (or investors, as we prefer to call them) than it is to retain the ones who already gave to the nonprofit.

Too many nonprofits are overly focused on their acquisition strategies. They want to spread the word about their nonprofit to get more and more people involved. Inherently, this isn’t a problem because nonprofits should want to spread the word about their missions. However, this should never come at the expense of the supporters you’ve already reached.

In order to retain the investors you’ve touched, you should make sure to:

  • Create valuable data segments. Within your CRM, be sure to create donor segments to guide your nonprofit strategy and outreach. For instance, segments based on the donor’s preferred method of contact can help you reach supporters through their most viewed outreach channels.
  • Personalize outreach. People respond positively to personalization. Not only that, but they come to expect it. In fact, 72% of consumers only engage with personalized marketing messages. Your organization can automate messaging to auto-populate individuals’ names, contact information, and personal details in order to personalize outreach.
  • Track touchpoints. It usually takes anywhere from 7 to 12 touchpoints with a donor before they make the decision to give to your organization. Tracking each of these touchpoints will help you best navigate conversations and relationships with your investors.

All of these retention strategies center around the same idea: making the most of your nonprofit’s CRM. People donate money to people. Using the data in your CRM to reach your investors on a personal level shows them that you care and want to help them make a difference.

CharityEngine’s donor management software guide explains the different types of tools available through CRM solutions that help reach your investors in different ways. From segmentation to outreach, having the right donor management tool can make a big difference.

Focusing on Outputs

Outputs for nonprofits are the activities you’re able to instill as an organization thanks to the donation you receive.  it is very easy to count outputs … how much money did we raise, how many people did we reach, how many meals did we serve, how many volunteer hours were donated, etc.

Meanwhile, outcomes for nonprofits are very different. An outcome refers to the real-world impact you have on the community. For example, calculate how much money is saved by getting children out of foster care earlier, how much more money those whose lives you improve will make over the course of their lifetime with a high school diploma, etc.

The difference is important, and it goes a step further. It’s not enough simply to identify your most powerful outcomes, you must also be able to match your outcomes to the investors who will most value them and ultimately, fund them.

This will help your organization stand out from the crowd. It is the reason strong nonprofit fundraising consultants encourage organizations to change how they communicate in order to emphasize impact and outcomes.

Fundraising Ability

Many nonprofits have a problem in that they underestimate themselves and their investors. Fundraisers ask for less than their investors are willing to give because they’re worried about hearing the word “no.”

However, this approach leaves money on the table that your nonprofit could have used in order to make a difference for your mission!

One way to make sure your organization is reaching out to the right people, asking for the right amount, and taking a healthy approach to the ask, is to understand which contributors have the potential to become organization investors.

This is one of the primary reasons Convergent differentiates between nonprofit donors and investors, explaining how important it is to look for investors for your fundraising plan. The difference is as follows:

  • Donors tend to give to small-scale campaigns. They want the organization to demonstrate its need for funding and will likely ask for a report addressing the activities undertaken to address the need.
  • Investors are more likely to provide more substantial multi-year investments to campaigns. They want the organization to demonstrate its plans for addressing a need rather than the need itself. They’ll direct their questions to address outcomes and impact rather than just activity.

Looking for investors helps nonprofits create a more sustainable plan for achieving more of its mission. It also helps fundraisers maximize the use of their time and energy to ensure the nonprofit creates the most impact possible, which is, after all, why the organization was formed in the first place!

You can also differentiate between your nonprofit donors and investors in your organization’s CRM. With a management system that tracks the journey of your supporters, you’ll be able to better reach out to and develop relationships. These relationships will help cultivate new investors and grow overall fundraising revenue.

Relying on Pathos

Specifically, when it comes to communications, nonprofits have been told over and over again to use emotion and pathos to appeal to their supporters. However, this is not the only rhetorical device that your organization should use to appeal to supporters.

A combination of storytelling and rationalization in outreach brings in the most revenue for nonprofits.

Supporters who provide larger investments and contributions to your organization are those who are swayed by the rational implications of giving. Therefore, using a dual approach to outreach ensures supporters can see both the emotional tie to the cause and the rationality behind giving to your particular organization.

Forgetting Matching Gifts

Did you know that billions of dollars are left on the table every year? Matching gift funds are a part of corporate social responsibility programs designed for corporations to give back to their communities. However, since nonprofits don’t prioritize these programs in their marketing,  eligible investors don’t know that their gifts can be matched.

Making an effort to incorporate matching gifts in your nonprofit’s fundraising can help make sure you’re not leaving this money behind.

According to Double the Donation’s guide on corporate social responsibility, about 18 million individuals work for companies with matching gift programs, but they may not know it. That’s why it’s your organization’s job to tell them about their potential eligibility and explain how the process works. In order to spread the word, your nonprofit can:

  • Include a matching gift database on your donation page or confirmation screen.
  • Send out information about these opportunities in your newsletter or email campaign.
  • Create a dedicated matching gift page on the website to provide general information about the programs.

When you craft your next fundraising plan, keep in mind that your organization is unique. You need to decide what’s best based on your needs. You work hard for your nonprofit to drive the organization’s mission. Don’t miss out on valuable opportunities or self-sabotage your fundraising plan with common blunders like those we’ve described here, and you’ll be on your way to meeting funding goals.

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