To be successful at fundraising, you need to learn from previous fundraising experiences, either yours or someone else’s. Look at what your nonprofit has done in the past to try and raise money. If you work for a startup with no fundraising history, learn from your peers. When you look at what has been done in the past, the three most important questions to ask are, “Did we promote mission, did we make money, and did we strengthen important relationships?”
The answers to those three questions determine how successful your fundraising efforts are. If you do all three – meet mission, make money, and strengthen relationships – you will realize results beyond your wildest dreams.
Did You Promote Mission?
Always put mission first. Always. No matter what the fundraising activity. It is mission that motivates people to enter into donor relationships with you. Individuals want to make a positive impact on an issue they care about. Foundations exist to fund nonprofits who can fulfill their mission. Businesses like associate themselves with nonprofits who have strong corporate identities, that is, the ones that ooze mission. If you want to connect with a potential donor, make sure your agency is all about its mission, in everything it says and does. We talked about the importance of basing your fundraising on your nonprofit’s mission in Successful Nonprofit Fundraising is NOT About the Money.
Sticking to its mission means your agency develops a strong brand, or reputation for living up to your promises, in the community. This means your organization needs consistent messaging in everything it says and does. Everything. From your logo to the look and feel of your website and print materials. From making public speeches to training staff and volunteers. In everything your organization does. This is because everyone involved in your nonprofit, whether they know it or not, are spokespeople for your agency. You want them to instill in them the words and images that best describe what your nonprofit is all about. In turn, they can use those same words and images when they talk about your organization with their friends and family. This is how you organically create community support, an outcome you want as a nonprofit leader.
Did You Raise Money?
The purpose for fundraising is, after all, to raise funds. Do your fundraising activities do more than break even? Do you know that for sure? Have you run the numbers? Have you calculated net income and not relied on the gross revenue figure? Have you accounted for total costs, not just the direct ones? To really know if you actually raised money, you need to run the numbers.
Gross incomes are total revenues brought in. Net income is gross revenue minus expenses. Because it takes into account your costs, net income is a better measure of funds raised than gross. In calculating net income, it is important to calculate total, not just direct, costs. Direct costs are those expenses used in the direct implementation of your fundraising activity. Total costs include indirect costs as well. Indirect costs include expenses that are necessary to incur in order to implement the activity but are solely allocated to one activity. For example, salaries and fringe of your development staff. Or a portion of agency rental and utility bills. Or a portion of executive leadership, human resources, accounting, and IT costs. Only when you calculate net income based on total costs, do you truly know how much money you are bringing in above and beyond what it costs to operate your department. And that’s the real purpose of fundraising – raise money for mission fulfillment.
Which activities really raised money, beyond the cost to run the department? You might want to repeat them. Which ones lost you money? You might want to retire them. Even if they are favorites of your board, staff, or fundraising volunteers. For more on how to develop a fundraising strategy that actually results in raising the money you want, see Developing a Nonprofit Fundraising Strategy that Optimizes Fundraising Performance.
Did You Strengthen Important Relationships?
The basis of fundraising is relationship building. As a fundraiser, you are creating relationships between donors, you, your nonprofit, and your cause. The stronger the relationships you can build between donors and your agency, the more lucrative the relationship will be in terms of dollars and cents, which is your job to raise. Do your fundraising activities build strong relationships with your donors? With your volunteers? With your advocates? With your collaborators? With your community? For a more detailed discussion about building strong relationships with your donors, read Donor Retention: Getting People to Give Again and Again.
Donors, volunteers, advocates, collaborators all come from community. Even your staff is from the community. It is imperative that you build strong relationships with all these constituencies to be successful. Fundraising does not operate in a vacuum. It operates within the context of community support. Whatever the fundraising activity, does it do anything to strengthen your important relationships? If it doesn’t, then maybe you want to modify the activity so that is does strengthen relationships, or choose other activities that serve you better.
Wrapping It Up
Did your past fundraising activities promote your nonprofit’s mission? Did they actually make money? Did they strengthen your organization’s community relationships? What do you need to do in the future to make sure they do? Fundraising activities that ooze mission, provide funds for mission, and generate mission support are the ones that will be the most successful, financially and otherwise.