We wrote a lot about the challenges of fundraising, as well as its importance, on our nonprofit blog. Virtually every nonprofit depends to some extent on its donors. However, getting people to donate money to your cause isn’t always easy. It requires connecting with your donors and making sure they understand the impact of their donations, among other things.
Fundraising is a challenging process, so it’s easy to make mistakes on the way.
Here are the Top 10 most common fundraising mistakes to avoid and what you should do to avoid them:
1. Not Building Relationships With Your Donors
Fundraising is first and foremost about building relationships. Nurture the relationship with your donors by staying in touch with them, thanking them for the contribution they made to the success of your organization.
Get in touch with first-time donors immediately after their first contribution.
Periodically call as many donors as possible, if not all, regardless of the size of their gift. To make this process as efficient and as smooth as possible, schedule some donor “thank you” phone calls into your team’s calendar every week or organize a thank-a-thon, an office “donor calling” event when you can spend the whole day calling donors to thank them.
Furthermore, use social media to build authentic connections with your donors by sharing stories and inviting people to be part of them.
You can either thank your donors in a more general way and address them as a group (a technique often used by larger nonprofits – in this case, you might want to highlight significant contributors) or highlight donors regularly regardless of the gift size (more appropriate for a smaller nonprofit).
Have a look at more ways to thank your donors and build relationships with them.
2. Failing to Measure Social Impact
The University of Michigan defined social impact as “a significant, positive change that addresses a pressing social challenge. Having a social impact is the result of a deliberate set of activities.”
Nonprofits need to develop the ability to know whether they’re making a difference. They need to know how to invest time and resources wisely so that they can do better over time. A lot of nonprofits dismiss the importance of impact measurement, or if they don’t know, they don’t know how to go about it.
There are many reasons why nonprofits should invest in measuring impact: gathering data and stories to be used in marketing and communications, getting quantitative and qualitative inputs and feedback for programs and activities, and sharing information with other nonprofits.
Above all, measuring impact is essential to attracting and retaining donors.
New donors want to see whether they will be donating to a reputable and effective organization. Long-term donors want to keep giving to a transparent organization that’s accountable to its donors.
The most common approach to thinking about and measuring social impact is Theory of Change. Theory of Change looks at why and how can the desired change happens in a particular context. It sets out to connect what a nonprofit/program does (the activities) and its desired goals (the impact).
For more on how to start measuring your social impact, head over to our crash course on social impact.
3. Forgetting to Answer the “So what?”
One of the most common mistakes nonprofits make is soliciting donations without answering the “so what?” question.
Seek to always clearly state the purpose of the ask. What will the donation help with? Where does the money go? How is it going to make a difference? Be as specific as possible.
Before launching a fundraising campaign, know exactly how that money is going to be spent. Take these two sample fundraising appeals:
“Please donate $10 to help prevent violence against women in Africa.”
“Your donation of $10 will equip 1 health care worker to respond to domestic or sexual violence calls in Kenya for one day. Empowerment counseling interventions help prevent or reduce violence against women.”
Although both appeals ask for the same amount of money to create the same result, the second one has a much clearer pull to it. The second one clearly states a plan of action with a resulting outcome – the impact is visible.
The more your donors know about the impact of their donation, the more likely they are to become (and stay) donors.
4. Only Asking for Money
Don’t get us wrong! Fundraising efforts should be raising money, and your calls to action should not be hidden. However, if everything that your donors ever receive from you is fundraising solicitations, you are at risk of jeopardizing your relationship with them.
This can make your donors feel like they’re just a “cash cow”, even though they donate to your organization because they care about your cause.
Instead, invite your donors to take partial ownership of the great work your nonprofit is doing. Ensure your communication plan includes an array of diverse outreach activities aimed at your donors.
Include thank-you notes, success stories, and organizational updates. Keeping your donors in the loop and allowing them to interact with your organization in a variety of ways not only keeps the donor engagement and retention high but also increases their sense of belonging and loyalty to your organization.
You don’t need a communications team or an expensive donor management system (although those can never hurt). Just call, email, or write to your donors and engage with them as much as possible.
At Donorbox, with the help of our powerful donor management feature, you can easily engage with your donors & send personalized emails on the go.
Finally, just because some supporters don’t have the money to give doesn’t mean they don’t have value (or that they won’t have the means to donate in the future). For example, presenting opportunities to volunteer gives these supporters an opportunity to contribute, and you the chance to cultivate them as donors.
Millennials, in particular, have a great desire to give to causes they care about, but unlike previous generations, they lack the financial resources to do so.
5. Not Doing Your Homework
Especially when it comes to meetings in person, not doing your homework is one of the biggest fundraising mistakes you can make. This includes asking for too little, asking for too much, asking your prospect in the company of others, and asking for a donation too casually or too indirectly.
Deciding on how much to ask for is a challenging task. Some part of it is reading nonverbal and verbal cues given out by the potential donor, but there is a lot that you can do to avoid making this mistake.
For example, there are a lot of services that allow you to look at credit and income scores. This can help you make the decision about how much to ask.
Why is this important? If you’re not informed, you could be missing out on large donations that would help your nonprofit.
Do your homework, make sure you research your prospect, and then listen. Listen carefully and actively. Perhaps you wanted to make an ask of $25,000 but throughout the conversation, the prospect gave you hints that you could ask for $100,000. Who would want to miss out on that?
6. Focusing Too Much on One-Time Donors
One-time donors matter. Whether they make a big or a small donation, every dollar counts.
However, when it comes to nonprofit fundraising, monthly giving (otherwise known as recurring giving) reigns supreme.
Great monthly giving programs have a much higher return on investment compared to one-time giving programs. Monthly donors have a higher retention rate than other types of donors. Furthermore, recurring giving programs are not only relatively simple to manage for nonprofits, but they also make giving easy for donors.
When developing a great monthly giving program, make sure to first develop a donor-centric plan that includes your goals, target audience, measuring and evaluation system, etc.
Make sure to brand it and give it space on your website. Promote it, and as always, showcase the impact of your donors’ contributions.
Finally, invest in a good data management system. If all of this seems ‘too much’, don’t forget that monthly donors are an invaluable asset to today’s nonprofits. They help you maintain a steady stream of income throughout the year and make your life easier in general.
Read more tips on how to create a great monthly giving program.
7. Not Having a Good Donation Processing System
You might have an excellent website, a work-of-art communication and fundraising plan that attracts thousands to your website, but if your donation processing system doesn’t work – you might be unwillingly and unnecessarily alienating donors and missing out on large donations.
Learn more about nonprofit donation processing here.
Invest in good online fundraising software. Online fundraising software is essential if you want to reach your fundraising goals.
A fundraising software will make constructing your donation page much easier and will provide you with a number of features and benefits.
Donorbox, for example, provides:
- Recurring giving options;
- Donors having the option to manage their recurring donations at any time;
- Pre-filled custom amounts with descriptions to let your donors feel great by knowing what they’re contributing to;
- Integrated employer donation matching;
- Optimization for desktop computers, mobile phones, and tablets;
- Accepting donations on your Facebook Page;
- ‘Donation ‘thermometer’ to encourage more donations;
- PDF receipts
Check out the Donorbox recurring donation system!
8. Asking Too Soon
Many nonprofits ask for donations as soon as an individual comes into contact with their organization. The rule is simple: if someone follows you on Facebook or Twitter, don’t contact them immediately asking for a donation.
You might think “it won’t hurt”, but in fact, it can hurt the relationship by starting it off on the wrong foot.
It’s the same issue that volunteers and staff fundraising on the streets have encountered for years: a lot of people are simply put off by such a direct and ‘sudden’ ask.
Instead, work on building and cultivating the relationship first, before making an ask. Only then you are working towards a long-term and sustainable source of funding for your organization.
This applies to events too. Consider organizing a “get to know” event for your donors and supporters and DON’T ask for donations (yes, not even a small one at the very end)!
Even though you didn’t include an ask, events like this are an excellent opportunity to build relationships and cultivate prospects. These types of relationships will lead to donations.
9. Underinvesting in Fundraising Efforts
By their nature, nonprofits are very cautious about the way they spend their money, and this is understandable. They are generously funded by donors to deliver their mission.
This is why many nonprofits underinvest in their fundraising efforts.
It happens every year at thousands of organizations, and it leads to the death or stagnation of many nonprofits.
Of course, the root cause of organizations underinvesting in their fundraising efforts is often an altruistic one. Many nonprofits are trying hard to spend as much of their fundraising revenue as possible on providing programs and services. Many are uncomfortable spending their donors’ money on overheads or a new website.
However, if a nonprofit doesn’t place enough value on its fundraising capacity building, it will stagnate, regress, or fail. Fundraising doesn’t just magically ‘happen’. See your fundraising expenses as an investment, instead of a “necessary evil”.
What many nonprofits sometimes forget is that neglecting your fundraising means neglecting your mission.
If you want your organization’s impact to grow, you need to invest in fundraising. If you want to do further your mission, you need to raise more money.
You can’t launch a $1 million fundraising campaign for $1,000. You can’t run a $1 million development office with no fundraising staff members and expect it to be sustainable.
If you want to get better at raising money, you must invest in the right strategy, staff, and systems to raise that money. This capacity capital investment in your fundraising can more than pay for itself in a few years.
10. Having a poor donation page
The time it takes an average user to make a judgment on your website is 50 milliseconds – not even a full second!
This means the users are making all kinds of assumptions about your nonprofit, how credible it is, do they trust you enough to give you their money, do they want to volunteer with you, etc. For example, because John thinks your design looks cluttered, hard to read, and confusing, he assumes your nonprofit is bad.
Readers won’t even move forward from your email if they don’t like its visual appearance.
Make sure the experience a prospect has on your website is user-friendly and smooth.
Furthermore, don’t hide your donation button! A donor should be able to find your donation link within a couple of seconds of your donation page loading. A good case practice is to place the link on the top navigation found in the website’s header. Highlight this button/link, potentially by using a bright and eye-catching color.
Design your donation page so as to be consistent with the rest of the website.
It is also crucial to design a donation page that is mobile-friendly/responsive. This means the donation page will resize according to the device being used, allowing for optimal viewing.
Keep the donation page to one page, keep it simple and clear, with a call to action displayed front and central. Use powerful images and offer multiple payment options.
Read more about how to design a great donation page here.
Improving your donation page is probably the single biggest bang-for-buck improvement you can make to your website and the most effective way to boost your fundraising efforts.
There is no magic potion for successful fundraising. From the Ice Bucket Challenge to crowdfunding, to social media, it seems there is always something ‘new’ that nonprofits think is “the thing” that will finally solve their problems and make them financially sustainable. Fortunately or unfortunately, the reality is that reaching the fundraising goals you want to achieve as an organization is hard work. There is no easy fix.
Making mistakes in fundraising is normal, and it can’t be fully avoided. Everything is a process of growth and learning for your organization.
Do the small things well and consistently. Make sure you do your homework before fundraising meetings. Make sure donating on your website is easy. Say thank you. Segment your donors and supporters and send only news that is relevant to them. Hire someone to write your fundraising plan if you lack the expertise. Make your impact report understandable. Interact with your social media followers.
If you really put your heart and mind into your fundraising efforts – the results can be incredible.