Fundraising has changed, but many nonprofits and other groups now face even greater challenges. Everyone knows that their programs take money, but how do you fundraise when everything seems so up in the air? With about 1.5 million nonprofits, there’s a lot of competition. Moreover, with donors pulling back or becoming more strategic, challenges exist to attract and retain supporters. However, we have to remember that with every challenge, there’s always an opportunity. You just have to think carefully about what you want to achieve and ask donors for an investment in your group.
It should be no surprise that one of the top challenges for nonprofits is fundraising. We know that many people want to help their communities, and that’s great. Still, if you’re going to lead a nonprofit or social group, you should be aware of what’s ahead of you. For example, a lot of organizations do the same things, so there’s replication. Also, small nonprofits have a challenging time fundraising because of scalability. In other words, it’s not easy to help a lot of people when you only fundraise a little money. So, community leaders and people thinking of creating nonprofits should consider carefully.
What Makes Fundraising So Challenging?
Since our social enterprise opened to help nonprofits with their fundraising, we’ve spoken to thousands of leaders. Because of it, we’ve had a birds-eye view of what nonprofit leaders find as their most significant challenges. Moreover, we have a good understanding of it as it relates to fundraisers. So, let’s take a look at those challenges, in no particular order.
- Fundraising professionals hired don’t have the necessary experience. (Check out what you need to do to change it if you’re hiring now).
- The community doesn’t have an accurate grasp of what the nonprofit does.
- The brand of the nonprofit isn’t rooted deep within the community. So, that means when fundraising events happen, it’s the same people giving the bulk of the funds.
- There’s a misconception by donors that nonprofits need to spend as little as possible. Of course, this always leaves groups not making many investments and merely surviving.
- Most nonprofits don’t have enough funds to take them through 6 months to 9 months of operations in an emergency (e.g., pandemic, economic meltdown).
- Leaders, be they executives or board members, don’t articulate the vision of the organization.
- Many nonprofits seem to have a challenge in telling their stories. (Find out how to master storytelling through digital marketing).
- Supporters and the community don’t have a good idea about the impact and metrics of the nonprofit.
- When donors get asked for fundraising funds, they don’t get a clear indication as to why the money is needed. Also, they don’t understand how the money is going to make an impact.
- Donors are so busy, and there’s so much communication happening that many appeals simply get lost.
- Donors support multiple organizations, and when they get around to you, they might be tapped out. There’s also donor fatigue.
3 Quick Tips for Your Nonprofit
The reality is that the vast majority of nonprofits operate with budgets of less than $1 million. In fact, many have financial accounts of not more than $250,000. That makes fundraising hard because it’s challenging to make a broad impact. Also, donors want to support nonprofits that are stable and have little chance of folding. It’s easier to close the doors of small nonprofits if there’s a massive disruption, say, to the economy. That said, there are a few things you could try to ensure more fundraising stability.
- No matter the size of your nonprofit, think strategically. In other words, don’t shoot from the hip. Develop a quarterly work plan that takes you through the year in a changing environment.
- One of the best things you could do for your nonprofit is to ensure your finances. Therefore, create a reserve fund. Make a unique appeal to your major donors to support a restricted fund in case of disruption in fundraising, as happened in 2020.
- Ensure that you increase the experience of your donors. That means you have to invest in your fundraising team and efforts. Ask a select group of your donors to help you build capacity.
In sum, fundraising is challenging, as is nonprofit leadership. However, there’s no reason that with a plan and well-placed fundraising asked for good reasons, you can’t ensure a thriving nonprofit.
© 2021 Not Your Father’s Charity & Wayne Elsey. All Rights Reserved.
