How Does Fundraising Work?
Wondering how to raise more money for your nonprofit cause? Let's start with a clear understanding of how fundraising works. Stripped to the essentials, here it is:
- You work to connect with people to generate revenue and long-term donors.
- Some, but by no means all of these actions create donors and dollars.
- Time, energy, and money limit your ability to do more
- If you persevere and grow skills, your results improve, and you create an "orchestra" that changes lives.
Definitions and Clarifications
Work includes requests for contributions, educating people about your cause, thanking people for support, inviting them, and more.
Connect: You meet people, build relationships, and help them to achieve their goals.
People includes actual and potential donors, individuals who never donate but otherwise contribute (i.e., volunteers and cheerleaders), and folks who take but never give.
Revenue: Dollars raised and items (in-kind) that you use instead of cash.
Donors: People who offer your nonprofit money or property. In exchange, you provide value by translating these into mission results.
Actions that don't create dollars or donors: This includes activities with zero results. What's tricky about it? It includes actions that seem like they will grow income but don't, such as likes on your Facebook page. Reducing activities that create minimal or no results frees resources for more compelling efforts.
Energy Limits: You obviously understand time and money limits. What's obscure is that energy burns each time you execute a good idea poorly. "We tried that once" kills many tactics others use to raise funds.
Skills: Fundraising takes skills. For example, how to move people through a philanthropic development process. It takes finesse to ask people about their interests and align them with yours. Other skills include clarifying what you hope to accomplish and matching your expectations to the results. For instance, you decide on a new event to raise money, see if it works, respond to a board member's demands, to meet new donors, to connect with current supporters, and capture media snippets. After the event, you do your organization a disservice if you only evaluate the event on how much money you made. Evaluating all the goals is a subtle but important skill.
Orchestra: A metaphor for creating an educated group of supporters whom you lead in concert toward your organization's vision. You help people play their instruments in ways that generate mission, money, and community. Together you make fundraising work.
Is Fundraising Working for You?
Rank yourself from 1 to 4 on the following. How is fundraising working at your organization? Decide what you will do to make it work better.