Guide to Non-profit Fundraising

How much do you spend on fundraising?

CharityWatch analyzes the effectiveness of nonprofits across a wide range of statistics. One particular interesting number is the “Cost to Raise $100.” Exactly how it sounds, this reflects how much it costs a charity to bring in $100 of public donations.

On this basis, a nonprofit is considered highly efficient if its cost to raise $100 is $25 or less.

Practically speaking, determine how much you want to raise with your nonprofit fundraising strategy or even a specific campaign. Start with a 4:1 ratio to get to the $25 mark and go from there. If you wanted to raise $5,000,000, you would start your budget at $1,250,000. Adjust from there.

Kickstart your donor development

Now the section that probably brought most of you here… actual donor development.

You have your organization set up for success. You have a clear vision of what you want to accomplish. Your board is behind you and you have the right staff to tackle the job. Now how do you actually find funding?

Prospecting and donor research

Many experts like to talk about a fundraising pyramid. A strong general fund of small donors supports a smaller core of mid-level gifts on top of which is a few major donors for your organization.

You want to maximize each level of this pyramid and continuously work on moving people upward.

The first step is to create a list of prospects. The most common prospecting strategies combine the following approaches:

  • Direct mail or email
  • Brainstorming of prospects (using board members and staff alike)
  • Prospect research (databases full of free or purchasable contact lists)

Donors give for their own reasons, not yours. When assessing your current prospect pool and searching for more, evaluate the following characteristics of each prospect:

  • Longevity – How long has this person been giving? Should they possibly move up the pyramid if they’ve been here a while?
  • Cumulative giving – Are prospects donating in lump sums or giving multiple times per year? Look for the latter as good opportunities to move up the pyramid.
  • Engagement – Look for people who are reading your newsletters, responding to your calls, reaching out about your organization… these are the types you want to move up the pyramid.

Leverage Customer Relationship Management (CRM) systems

When you begin a prospect gathering mission, it couldn’t hurt to start by scrubbing your current database (whether its paper files or an Excel workbook or an entire donor management system). It is good to get a clear idea of everyone you have previously had relationships to understand your likelihood of using these people as a base for your new strategy or as referrals to new candidates.

Once you have a baseline of prospects, decide if you should leverage more advanced technology for your nonprofit fundraising efforts.

The benefits of a formal CRM system are enormous for all types of organizations. With the proper system in place, your organization has the ability to record all communications with donors and prospects, track their personal characteristics, create easy email campaigns, find volunteers, and so on.

Especially useful are these systems’ abilities to report on progress during campaigns and analyze the demographics of donors and prospects. You can run reports that help determine which people in which locations to target for each specific kind of outreach. This helps when trying to nail down a specific donor outreach campaign.

TechSoup has a breakdown of 8 top CRM systems for nonprofits as well. Perform a similar analysis to this when evaluating software for your organization.

Ensure donors keep giving

You have two major goals with donor development:


  1. Make sure current donors keep giving.
  2. Try to move donors up to mid-level and major gift level status.

Some useful tips for maintaining and improving donor relationships range from simple thank-you notes to community recognition to providing access to special information or services.

Personal touch goes a long way in cultivating relationships with donors. Invite people individually to events or conference calls you may have. Point out donors who have given in a monthly newsletter. Everyone enjoys a little recognition, especially if they are intent on furthering their own missions of giving.

More tactically, you can use donor surveys and other donor-directed communications to try to get a feel for how they perceive your organization to be doing. Gear your marketing collateral to them based on specific programs and results that you’re achieving.

While you’re publishing data and other marketing collateral for wider consumption, try to focus specific pieces to donors only to let them see inside the progress you’re really making as an organization. You can use a more friendly and informal tone when communicating with current donors, to help aid in the relationship building process.

Hold special events just for donors. Have a social where donors can meet one another and discuss their own missions and visions for what they want to achieve. Everybody appreciates being connected with more people who can help their cause… so use this avenue intelligently to help boost relationships among your community.


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