Many nonprofit organizations that have been successfully funded by government, corporate and/or foundation giving, are now finding they must diversify their funding sources.  Government funding has been restricted since the 2008 recession, and in similar fashion, corporate and foundation funding has not rebounded to pre-recession levels.  This has left some nonprofits that rely heavily on these sources feeling vulnerable.

Individual giving represented 73% of charitable giving in the United States in 2012.  When bequests, also gifts from individual donors, are counted in, the total rises to 81%.  Because charitable contributions from individuals represent such a significant portion of giving, and because individual giving is not normally as volatile as government, corporate and foundation giving in tough economic times, it is little wonder that many nonprofits are eager to begin cultivating individual gifts.

Start with your VIPs

Think of fundraising in terms of concentric circles – in the middle is your organization, and surrounding that are your board members and leadership.  This is where your fundraising must begin.  Your purpose in raising funds from your board and other VIPs is three-fold: 

  • You want to test your case for support, and make sure that your leadership has bought into and vetted the messages you plan to extend into the community
  • You want to excite and energize your board members so they will participate, to the extent they are comfortable and able, in your fundraising activities
  • You want to obtain 100% board participation in your fundraising before you take it to the public

Some nonprofits also expect a certain dollar amount or a “sacrificial” gift amount from their board members.  That is, the contribution by any board member should represent a sacrifice to him/her.  It is not “spare change,” whether that is $100 or $100,000. Whether or not you stipulate giving at a particular level, all board members should participate at this sacrificial level.

Leverage connections

Once you have obtained 100% buy-in from your board, have energized and excited them, and can confidently proclaim to the broader community that you have already garnered considerable support from community leaders, you will move to the next concentric circle.  Outside the circle of VIPs are their friends, associates and connections.  Find out who these people are, and if possible, enlist your board’s support in inviting them to get to know your organization.  This may be through a direct mail campaign, or an email campaign.  Perhaps even more effective, however, would be to host small events at board member homes, or host an event at your site so potential supporters can see firsthand the good work you are doing.  Educate, inform and involve them in your work to cultivate long term relationships.

Find new potential supporters

All organizations periodically need to replenish their donor base, and the best practices that hold true for those are the same for organizations just beginning their individual fundraising journey.  Understanding your current donors is the best way to find new prospects who are likely to donate.  What do your board and other donors have in common?  Do they live in a specific area?  Are they interested in the environment and green living?  Are they active in politics or the arts?  When you can answer those types of questions about your current supporters, you can find others like them.   Do this by purchasing custom prospect lists, or by creating awareness of your mission via social media.  Once you understand what interests and motivates your supporters, it is much easier to target the right prospects for your acquisition efforts. The following table indicates some of the ways nonprofit organizations can identify and attract new prospective donors.

Ask for recommendations from board members, friends, leadership, donors, volunteers This provides a small number of names who often have good connectivity to your organization. Some vendors can provide list generation based on these existing relationships to find new, close linkages worthy of pursuit.
Collect names from broadcast or offline media including newspapers, magazines and television. Often black-tie galas and other fundraising events get press coverage that includes mention of patrons Provides a small number of names and they often have little connection to your organization.

Collect names from online search platforms such as Google or BING. As with offline media, online media may include event programs with committee members listed or mention of substantial givers and activists to various causes

May provide a small number of prospects with reasonably good affinity.
Review annual reports and honor rolls of donors from organizations with missions similar or
complementary to yours
May provide a substantial number of names who have an interest or connection to your mission or cause, often coupled with geography. May or may not translate to connection to your organization.
Purchase lists for mail, telephone or email outreach through prospect research firms, data providers, mail houses, or other vendors This provides a substantial number of names that may or may not be a good fit for your organization. Criteria for selecting lists can include lifestyle
attributes, interests, wealth, geography, philanthropic history and other factors. Seek list providers that can profile your best donors and find potential supporters similar to those.
Host events, tours, open houses, etc. and collect names of attendees

These prospects are raising their hands and should prove to include some valuable donors. Some will turn out to be "friends of a friend" and may not value the connection with your cause, but others will be among your best advocates.

Use social media sites such as Facebook, LinkedIn and Twitter to identify, attract and engage a
This allows followers to opt-in and those who do are again raising their hands. With the proper engagement efforts and effective follow through, many may become donors.
List exchanges with complementary nonprofits This can be effective for those that have complementary missions but do not see each other as competition.
Leverage connections or partnerships with other groups such as faith-based groups or associations with complementary missions Provides a natural connection to groups that are in general philanthropic and may be encouraged to participate by a group or leader whom they already trust.
Form relationships with corporate partners Corporate partners can provide gifts and sponsorships, but also access to motivated volunteers and potential supporters. The best of these relationships are more than just transactional, but also enable ongoing and meaningful relationships between individuals at the charity and the corporation.

Figure 1: Excerpted from WealthEngine's Growing Individual Gifts Workbook

Segment Your Donors and Prospects

As your prospect and donor lists begin to grow, remember that each person is an individual.  You must treat them as such.  In your stewardship, thank everyone, but make your thanks appropriate to the gift.  A $10 donation should likely get a different thank you than a $1,000 gift.

Likewise, don’t solicit all your donors for the same amount, or for what they gave the last time they donated.  Segment your constituents by giving amount, frequency, and by wealth profile where possible.  Asking the right people for the right amount will enable your fundraising to grow.

Practice multi-channel fundraising

Communicate with your donors and prospects across multiple platforms and in many ways, being sure that you keep your messages consistent.  Your fundraising campaign can include direct mail, phone calling, email, social media and event components.  Donors may get many messages, and will respond in the way that works for them.  But they are channel-hopping:  a donor who gives by email today may prefer to give via direct mail or on the website tomorrow.  That is why it is critical to have an integrated campaign across multiple channels.

If you’re looking for more advice on getting started or improving an individual giving program, please download our free workbooks, Growing Individual Gifts, and The Data-Driven Annual Fund.

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