Fundraising is vital to the success of any organization, which means that nonprofit leadership must be constantly focused on not only managing existing donor relationships but also attracting new donors to fill the funding pipeline. But knowing how to expand your donor base is a tricky topic for a variety of reasons.
For starters, not all donors are going to contribute equally and not all donors will have the same future expectations of the organization they are supporting. Some fundraising efforts can result in a wave of one-time small contributions. That isn’t a bad thing by any means (especially for an organization that needs a quick surge of funding to meet a short-term objective!). However, those types of fundraising efforts are likely not going to be sustainable over the long-term because they don’t generate the kind of donors that want to make an ongoing commitment to the organization. So, for organizations looking to expand their ongoing donor base, those types of fundraising efforts may not be the best use of their limited resources.
Next, some fundraising efforts tend to bring in larger donations, but they are also far more costly to host, so their fundraising ROI may be lower than other types of efforts. And yet, the costs of a particular fundraising approach can vary significantly from one organization to another based on location, community support, existing internal resources, board members’ connections, and so many more factors. Organizations will need to weigh the cost associated with different types of fundraisers against their expected return. However, these kinds of events are not done solely for the purpose of raising money – or at least they shouldn’t be because that’s not a sustainable strategy! Major events are also done for relationship and affinity-building purposes. You can justify these benefits when examining the ROI of these types of events if you are following up with donors afterwards to foster a mutually beneficial relationship.
As a result, an organization shouldn’t simply make a list of their fundraising options and indiscriminately try them. Instead, an organization will need to analyze each type of fundraising possibility through the lens of what will most effectively build their donor base in a way that’s sustainable and cost-effective. Our team has put together a resource to help you do just that!
How should you use this resource? If you’re an ED or CEO, this will be a refresher on how to diversify your funding mix because it includes current insights on nonprofit fundraising. If you are a board member, this will help you to better understand the fundraising options available to your organization so you can ask more informed questions about goals, expectations, investment needs around time and money, and long-term sustainability.
Fundraising Approaches
Let’s look at the nonprofit fundraising options that can help an organization expand their donor base (with the underlying assumption that every organization will likely have a unique mix of approaches that work best for them). We will explain what each approach entails, how it can help to expand your donor base, and give some tips on how to do it well.
Attracting New Donors
- Fundraising on Social Media – Social media platforms are more popular these days than ever before! Their wide reach facilitates engagement with existing supporters as well as provides another fundraising channel for organizations to utilize. While social media’s fundraising capabilities are easy to set up, they should not be done without first investing in building out the organization’s presence on the social media channel.
>Execute: Use social platforms to tell your story and share compelling content related to the work that you do and then use them to fundraise once this foundation is in place. - Peer-To-Peer Fundraising – Peer-to-peer fundraising allows nonprofit organizations to fundraise through the efforts of their existing supporters. This approach to fundraising empowers your supporters to become passionate advocates for your cause and quantify the difference they are making in a way that makes it more meaningful.
>Execute: While peer-to-peer fundraising relies heavily on your supporters, it should not rely exclusively on them. Ensure that they are being well supported in their efforts by giving them advice on how to leverage their personal networks to solicit donations more effectively so you can share in your fundraising success. - Crowdfunding – Crowdfunding harnesses the power of the group and uses social proof to encourage many donors to come together collectively for a single fundraising effort. Often, a crowdfunding approach will be utilized to fund a specific project or initiative over a shorter window of time.
>Execution: Create individual and shared goals and incentivize donors to hit them with unique perks or rewards.
- Virtual Fundraising Events – In our increasingly digital world virtual events are a great way to bring likeminded people together from many different areas in a way that’s cost-effective and convenient. Because these kinds of events reduce (or even eliminate) the kinds of barriers that typically prevent prospective donors from supporting your organization, they are a great way to increase not only the size of your donor base but also the level of support you receive from individual donors.
>Execution: Simulate the feeling of an in-person event by providing opportunities for things like networking, sharing, and connecting during the event. Then, after the event, follow up with participants to forge a deeper connection. - Donor Referral Programs – Having a formal program in place to incentivize referrals is the original form of peer-to-peer fundraising. Encouraging existing donors to recruit new donors for your organization is a great way to leverage your existing supporter base to help you cast a wider net to reach more people.
>Execution: Once again, your donors will need support to recruit others well. Provide them with the tools that they need to be successful as well as public recognition for their hard work to make them feel like valued supporters of your cause.
Encouraging Repeat Donations
- Gamification of Fundraising Efforts – For those not familiar with the term, “gamification” refers to the practice of using video game-like levels and rewards to incentivize an audience to take a desired action. In the case of nonprofits, this would mean creating donation and engagement tiers for supporters that encourage them to increase their giving and spread the word about your organization in exchange for exclusive benefits like content, experiences, early access to events, and more. By making peer-to-peer fundraising fun, it encourages your most loyal supporters to increase their own giving and may help your organization expand its donor base in some cases as well.
>Execution: Use points systems, challenges, leaderboards, badges, daily bonuses, and other game elements to encourage friendly competition among supporters. - Monthly Giving Programs – While monthly giving programs do not necessarily increase the size of your donor base, they do increase the total value of donations coming from your donor base. Recurring donation programs help to increase the average lifetime value of your donors as well as smooth out giving in a way that makes it more predictable to aid in planning. This is a huge win-win!
>Execution: Make it easy for donors to set up recurring donations and demonstrate the value to the organization of them doing so. Where possible, seek matching opportunities from employers or major donors to persuade donors to make an ongoing commitment.
Expanding Reach
- Community Fundraising Events – Local events have always been a go-to for nonprofit organizations because they strengthen relationships within the community. Traditional community events are a great way to connect with local businesses, influencers, volunteers, and supporters to raise awareness for your cause, thereby expanding your donor base and creating additional partnership opportunities.
>Execution: Create events that not only align with your mission or cause but also resonate well with your community. Collaborate with partners, supporters, and the community at large to maximize attendance and participation. - Corporate Partnerships & Sponsorships – One of the best ways to expand your donor base is to bring in a major corporate partner or sponsor. The kind of donations that companies offer can provide a major boon for organizations looking to expand their funding. These kinds of relationships can also result in a surge of additional private donations as well if the companies involved have a wide reach or significant sway in the community.
>Execution: Identify corporate partnership opportunities based on the company’s alignment with your organization’s values. Look for ways to create mutually beneficial partnerships, be it event sponsorships, donation matching, employee volunteer programs, or corporate contributions.
Keys to Success
Ready to get started? Remember, there are a few key factors that can help organizations to succeed in their donor base building efforts across all fundraising approaches:
Be Clear
Organizations that are operating transparently will find it easier to attract donors. Remember, even the best approaches won’t work if your organization isn’t fundamentally aligned with what your supporters want to support. For this reason, it’s important to be clear about what your organization does and what it represents. Nonprofits should take the steps needed to communicate well with their supporters and bring them along for the journey from their first donation throughout the duration of their relationship by directly correlating donations to the organization’s impact in the community.
Tell Your Story
Using storytelling is a great way for organizations to connect with their audience, which means that it can be very compelling when used in fundraising efforts and help to expand your donor base. Show your donors what they can be a part of by leveraging multi-media approaches like video content, interactive websites, and podcasts to tell your organization’s story and connect strongly with donors to increase the likelihood of subsequent donations.
Invest in Donor Management Efforts
A commitment to ongoing donor management and relationship building will always play a vital role in retaining donors, especially large donors. Relationships with your most loyal supporters need to be cultivated so that they can remain strong over time. And, as Deniz Satir explains, nonprofit leaders play an important role in donor management in the following way:
Building and maintaining strong relationships with donors are paramount to sustaining and scaling fundraising success. EDs should actively engage with major donors, corporate sponsors, foundations, and community partners. This involvement includes attending meetings, events, and donor stewardship activities. By personally connecting with key supporters, EDs can convey the organization’s impact and foster long-term partnerships acting as a passionate advocate for the organization’s mission and impact.
Customize
Today’s data platforms offer modern nonprofits the ability to use targeted outreach and data-driven segmentation to better approach donors with messages that will resonate well with them. This allows organizations to customize their messaging and timing around the ask to increase their likelihood of converting one-time or occasional contributors into ongoing supporters. In this way, leaning on segmentation and automation can help to foster an organization’s current donor base in a way that helps to expand its long-term impact.
When you need nonprofit consulting to improve your fundraising efforts, we can help! Our team of experienced nonprofit leaders can advise your organization on how to fundraise better to increase your donor base. We offer leadership and board advisory services to nonprofit organizations that need strategic advice. Contact us today to find out more!
