Biggest Mistakes Nonprofits Make in Fundraising

Biggest Mistakes Nonprofits Make in Fundraising

In this blog series, we will be addressing the biggest mistakes that nonprofits tend to make. It has to be said that when it comes to being a nonprofit, life isn’t easy. Between limited resources and a frequent lack of funding, nonprofits must work extra hard to make their mission a reality.

Part I: Fundraising

Oh fundraising. One of the most important areas that makes community impact work possible, and yet, also one of the most stressful. The reality is that nonprofits cannot function without dedicated time to raising funds in some way. Whether you’re a grassroots effort running a change campaign or an established institution with major donors, everyone makes mistakes. Here are some classic mistakes that nonprofits make when it comes to funding their work.

You don’t diversify

Like anything in life, too much of a good thing is always volatile. Depending on one resource means that you’re likely not giving attention to other sources of income out there. Have one major donor? That’s awesome! But what if something crazy happens and you can no longer count on them? Do you have a super successful Christmas Gala every year that brings in all you need for the year? What if disaster strikes and that Gala can’t live up to the expectation? In these cases, a nonprofit would be in serious trouble. It is important for directors and fundraisers to look at a spectrum of diverse income stream — big or small. That means considering events, major gifts, campaigns, grants, matching programs, etc! The skies the limit, but make sure you’ve got your bases covered.

You don’t communicate with donors through the full process

Often times we make our case to donors before a donation is made, and of course find a way to display our gratitude. Many nonprofits have a habit of leaving it at that. It is critical that organizations communicate with current and past donors through the entirety of a project or, even better, in the long term. This means finding a way to regularly provide updates to donors through a newsletters, personal emails, outreach calls, or even site visits. We must always find a way to allow donors to opt out of these emails should they not want to hear from us. Want to improve on your communications? Check out this post!

You don’t track donor behavior

Every nonprofit should have a system to organize and track donor data. With such a system in place, nonprofits can track the trends of individual donors. We can see what campaigns were more popular, what initiatives donors are more likely to give to, what time of year or with what frequency donors give, etc. This helps us develop strategic ways to make an ask that goes along with the supporter’s donation habits.

You wait until the last minute to ask for help

Sometimes it can feel like you are barely staying afloat. Other times you’re just making it by. And, on the good days, you’ve found yourself in a stable place with a rainy day fund. Whether you’re facing major financial challenges, or you aren’t planning properly for a project, you need to work on your timing. From planning events to campaigns or individual asks, do not wait until the last minute to raise the funds you need to implement programs, or even more terrifying, stay alive.

You don’t know exactly what you’re raising money to fund

Many new nonprofits face this challenge. You know you need the money to get the ball rolling, but you don’t know what you plan to do with those funds. This makes reporting back to donors a sticky realm. You must be able to allocate those funds according to your mission or pay for start-up costs. But, you must be extremely clear as to telling where that money will be invested and how that investment will make an impact on your work.

Fundraising may have the word “fun” in it, but it certainly doesn’t always feel this way. Your organization can get better at fundraising, donor relations, and financial planning by targeting some of these bad habits and building healthy processes and procedures to ensure the financial backing that makes your work come alive.