7 Essential Tips for an Effective Fundraising Strategy
As someone who volunteers and sits on a number of boards for nonprofits, it is my goal to add value and make an impact by curating thoughtful discourse, making connections or volunteering for events. Inevitably, however, I am asked to do the one thing I dislike most.
My angst for fundraising probably derives from my early and impressionable days as a sales associate, when the idea of "asking for the sale" was beaten into my professional character by people who could best be described as snake oil salesmen.
David Atchley, on the other hand, is a skilled and experienced fundraiser, successfully raising millions of dollars for his client organizations, including universities, economic development centers and cause-based organizations such as the Faison School for Autism.
Atchley approaches fundraising not as a sales pitch, but rather a long-term partnership between organizations and donors -- much like an entrepreneur with investors. And like a business, he feels fundraising should be approached and prioritized just like any business goal -- with a strategy.
Atchley points out that many non-profit organizations often approach the task of fundraising horribly wrong. To avoid a great deal of wasted time and energy, he suggests the following tips for more effectively creating and executing a fundraising strategy.
1. Set your expectations.
Right off, it is important that you understand that raising money takes time -- a lot of time -- and a strong, well thought out strategy.
The challenge is that there are tens of thousands of organizations fighting for a very limited pot of money. Also, the grind of raising money every year creates an internal motivation problem as well as an image problem, especially as the organization fails to reach sustainability after a few years.
Your goals, like your strategy, should be long term and highly focused.
2. Refine your value proposition.
Your pitch, or "case for support" as Atchley puts it, is much grander than a few goals for the end of the year. Donors want to know that your impact, and their money, is going to be used for more than a few incremental changes.
As the amount of money you seek increases, Atchley explains, so does the impact you need to demonstrate. Your organization needs to look beyond a flowery vision and develop a "transformation statement."
How is your organization going to realistically change the world?
3. Understand your IRR.
One of the most effective selling tools you can develop is to clearly understand and communicate your internal rate of return (IRR).
The IRR is a financial measure that demonstrates how a donor's money is moving the organization toward sustainability. This is especially effective for large donors, who will be more concerned with knowing that their money is going to create a long-term sustainable organization (so you don't need to ask for more money later) rather than a short-term benefit.
4. Formalize and train your team.
Atchley points out that there are numerous roles in a fundraising strategy, and it is important to pair these roles with individuals in your organization with the relative strengths. These roles include:
- Engagers: Individuals who will interact, talk and nurture relationships.
- Connectors: Individuals who can leverage networks and make valuable introductions.
- Askers: Individuals who understand the skills and timing necessary to ask for the donation.
- Stewards: Individuals who communicate with and nurture ongoing donors and promote the relationships.
If your goal includes raising a significant amount of money, you should also consider a consultant or professional fundraiser for your team. These individuals have the experience, the network and the skills necessary to take your team to the next level.
While hiring a dedicated fundraiser or consultant can be expensive, they may well be worth the investment if they have a significant impact on your fundraising efforts.
5. Know your audience.
While every non-profit team dreams of securing the support of a large, institutional foundation, understand that most foundations are typically one-time donors. This is because they often wish to spread their impact and ultimately want their gift to lead to sustainability.
Do not ignore individual donors, and always promote and celebrate when you receive a second gift (individuals or foundations who have given more than once), which signals that you are meeting goals and satisfying existing donors.
6. Manage your strategy.
It is easy and indeed common for organizations to "drift" from their fundraising strategy. Responsibilities and ongoing and often unexpected emergencies all add variables that can distract you from your goals.
It is critical, however, that your organization prioritize fundraising plans above all else, and review progress and make adjustments regularly.
This is also a good case for hiring a dedicated fundraiser if it fits into your budget.
7. Get creative.
Like negotiating business deals, there are numerous ways you can engage donors without simply asking for a check.
For instance, you can ask donors to pledge their support with smaller amounts spread out over a period of time. Another strategy is asking a donor to create a “matching gift,” meaning that your organization needs to raise matching funds in a given amount of time to receive the gift. This signals to the donor that you are serious about raising more money and also creates urgency for new donors.
Anyone who runs a non-profit organization understands the immense challenge with raising money. With the right planning, training, team and expectations, your organization can more effectively raise the funds needed to create sustainability and make a long-term positive impact.
As for me, I was happy to finally find a role that better suits my strengths without the need to always be closing.
Do you have experience with nonprofit fundraising? Please share your thoughts and tips with other below in the comments section below.