Sunday, August 24, 2008

How To Increase the Number of New Donors

Whether we're talking about the nonprofit that you work for needing to locate new individual donors, new corporate sponsors, or new foundations to approach for grants; it's all the same. In addition to the usual or recent donors, your organization is hoping to grow and to grow you must increase cash flow.

Never forget that while the nonprofit provides for the community, and is granted tax free dollars because it does; it is a business. A nonprofit is an organized entity working to achieve a goal (and is now going to be held more accountable than ever by the federal government (besides your donors) to achieve goals; see the new nonprofit tax form). Every nonprofit must work on its programs or services AND its business operations, every day, if the organization is to survive and grow. Nonprofit business operations include board oversight and legal compliance, program planning, budgeting, fundraising planning, raising more money than this year or the year before, achieving benchmarks and goals, etc.

In a viable nonprofit, on average, half of each business day is spent on business operations and the other half is spent on the work of the mission statement. Of course this is easier done by organizations that either have more dedicated and competent volunteers and/or staff. Nevertheless, the formula is make or break; either nonprofit leadership dedicates itself, in a good part, to the business operations, or the organization will falter. The question is: are you doing enough, today?

Donors are no longer a 'write a check and just hand it over' group of people who fund anything and gladly do so. Donors, today, are more savvy than ever. They research the causes that they wish to fund to find the recipient who does the job best. They donate to connect with a nonprofit close to the solution or that is very good at its search for a solution to the issue that they are passionate about. They are looking for nonprofits who do not just work on their (the donor's) pet cause but are successful at their work, who are honest and transparent in their operations and reporting (including tax filings and bookkeeping), and who demonstrate that they are a great investment into the issue's solution. Donors are searching for organizations to give to who are serious, current - aware of the issue and the latest in that field, and who are the best likely candidate to do the work the organization is setting out to do. The quality and reputations of not just the organization, but the organization's: accomplishments, the organization's staff and volunteers, and the collaborations and partnerships that the nonprofit makes to get itself into strategic and more effective positions, for the cause do not just happen by chance. Educate yourself on modern nonprofit best practices, plan, and begin the work to operate and interact with your public as good as possible. Implement the processes that a nonprofit who raises more donors than the month before, or the year before; regularly plans for, works towards, and completes. Donors give to a nonprofit not for the tax benefit, many recent studies have found, but rather to contribute, get involved in the effort, and to help create the best possible outcome. Donors, today, see themselves as important partners in the nonprofit's work. They view themselves as investors who, like those who invest in stocks, expect excellent strong performance, growth in successes, achievements, and they expect honest and regular reporting. Today's donors aren't just satisfied with a newsletter or occasional donation request that lists the organization's recent achievements. Today's donor (especially grant makers) can expect to be shown: a program design, the program's expected outcomes, the evaluation method that will be employed to determine successes AND where attention is needed, the budget, staffing, the participant population's demographics or statistics, where the program will occur, for how long, etc. After the program, today's donor (especially grant donors) expects an honest, succinct, but thorough and comprehensive follow up report including; evaluation method used and results, lessons learned and changes being made to improve the program, expenses and income, any changes that were made, and they want to be shown how the result relates to the success of your organization's mission statement (or the work that your organization does).

Any nonprofit that wishes to increase its numbers of donors and to continue to increase numbers, over the years must first reflect on itself: its operations, its work, its programs, its staffing, its successes and reputation, etc. honestly. It must consider the difficult considerations such as where are the 'weak links' in the chain that is your organization's potential success. Moreover, leadership must not just be willing and able to take the difficult honest look at oneself and one's work; they must be able to do the necessary work to rectify anything needing attention. Every nonprofit is as powerful as its weakest planning, program, volunteer, or staff. Set the bar higher, today.

The organization looking to increase donors and to continue to do so over time, after doing self analyses and making improvements, must open up to its potential donors (and potential volunteers). Nonprofits must be accessible and easily researched, today. If a potential volunteer or donor asks for your most recent annual report, your most recently audited financials, or a copy of your bylaws; can you provide those? Would you share them? If you wouldn't, why wouldn't you? Being proud of your organization's operations and wanting to encourage partnerships and investments leads to transparent nonprofits; ones that share their operations, successes, and where they need help or growth.

Put into place internal organization-wide mechanisms, processes, and requirements that regularly and comprehensively provide your leadership, fundraisers, marketers, and other staff or volunteers who are working to raise donations, increase awareness of your organization, and are making needed alliances in your community. Gather information such as numbers of services or products provided, successes, lessons learned, who attends or benefits from your programs, break the benefiting population's demographics down (e.g. maybe you serve people, so the demographics to track could be: adults, teens, children, sexes, income levels, etc.), and so on. Provide real data about all of your work. Your new federal tax return will require these of your organization, now, anyway. You might as well do the due diligence, now, to provide what you'll need from now on to not just correctly and completely report in tax filings but will increase donations. All of this information may seem like "over kill" or "labor intensive" or "expensive" for your organization; but I challenge you to do the cost/benefit analysis. Imagine the new and extra money that you could raise if you provide today's modern donors with the connection, transparency, confidence in your organization's capabilities and operations that they demand. If you show someone who wants to donate to the cause you serve, that your organization is successful in its work, honest, well run, and tackling the future; why shouldn't they give to your agency? You and I keenly know that the donor decides to either give to your group or they pass and move onto another nonprofit. Place your organization in a position to raise more, now. Having this kind of real time comprehensive data about your organization, its successes and its work, will pay off if its used to market and fundraise. It will.

If there was a donation application on Facebook, or a fundraising letter, or a grant donor that could make all of the money that your organization needs pour through the door; you would've heard about it, already. Trust me. The fact is that a nonprofit's business operations, such as fundraising, is half of its work, every single business day. To provide services and products today and then provide more, tomorrow, nonprofits must have cash flow and also increases to each year's cash flow. That's why raising money and other day to day operations is half of your work.

1 comment: said...

In my experience working with small nonprofits, the biggest myth I encounter is the belief that if you're a nonprofit the money will come flowing in endlessley. I try my best to reiterate the idea that the organization is in fact a business, and as in any business you must work hard to make money!