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Financing Not Fundraising: Finding Individual Donors

By Nell Edgington



In part four of our ongoing Financing Not Fundraising blog series, we are focusing on the most untapped, greatest sustainable funding opportunity facing the nonprofit sector. Individual donor dollars make up 80% of the private money entering the nonprofit sector each year, compared to 5% from corporate dollars and 12% from foundation dollars. Yet many nonprofit organizations don’t know how to effectively embrace the full opportunity of that market.

Here are five steps to get you started:

  1. Move Beyond Direct Mail. While direct mail used to be the only way to find individuals willing to support your cause, there are now many additional channels you must explore to stay relevant (email, blogs, Facebook, Twitter, etc). Beth Kanter and Allison Fine’s new book The Networked Nonprofit makes a fundamental argument about how nonprofit organizations can use social media to leverage people outside of the organization (donors, volunteers, supporters) to build momentum (resources, funds, mind-share, advocacy, etc) for their cause. If nonprofits more effectively used social media to build their networks, individual donor fundraising could be revolutionized.

  2. Don’t Separate Donors From Other Supporters. Just as fundraising is often sequestered from the program work of the organization, funders are also often kept separate from other organization supporters.  Volunteers are often left off funding appeals for fear of asking them to do “one more thing” for the organization. And funders are not asked to become volunteers or advocates. Instead of putting organization supporters into silos, open all opportunities to everyone. Better yet, ask (or allow) supporters to create their own ways to accelerate the work of the organization (like tapping into their own networks to help). Once integrated, the possibilities for building support are endless.

  3. Stop Fearing the Major Donor. Many nonprofit organizations would love to have major individual gifts coming in the door, but don’t know how to find and solicit those donors. The process, once understood, is actually pretty simple. You must identify, qualify, cultivate, solicit and, most importantly, steward donors. Use your board, volunteers, supporters to help identify and qualify people who meet three criteria: 1) belief in the organization’s cause 2)connection to a person at the organization 3)personal capacity to give at your major donor level. Once board, friends, supporters are involved in a well-defined process, major donors are sure to follow.

  4. Get Your Board Focused. Boards of Directors are often misused in fundraising. They serve on event committees, write grants, make cold calls, or seal envelopes. Instead of using them for these low ROI activities, give them one fundraising job and one job only: to help move major donors through the cycle outlined above. Even if board members don’t have networks of wealthy friends, there is still much they can do to help raise major donor dollars. Board members can help identify major donor prospects, uncover information about potential prospects, invite prospects to a cultivation event, go on a major donor call, send thank you notes or make phone calls. The board is a key part of your organization’s network, put them to their highest and best use.

  5. Do Away With the Pity Ask. To effectively raise money from individual donors, especially major donors, you have to move away from the pity donation and toward the investment opportunity. Donations and investments differ in every aspect:
    And investment opportunities are not only for the major donor. Even your smallest donor can be made to understand the broader impact of the organization’s work, how important their dollar is, and what the return on investment can be.

Individuals are able and want to do so much more. If nonprofits more effectively seized opportunities to engage and invest individuals, the sector could become more sustainable and better able to create change.

If you want to learn more about applying the concepts of Financing Not Fundraising to your nonprofit, check out our Financing Not Fundraising Webinar Series, or download the 27-page Financing Not Fundraising e-book.

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About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.


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5 Comments to Financing Not Fundraising: Finding Individual Donors

Anteneh
June 11, 2011

God bless you every body how work the site
This is Anteneh from Ethiopia first of all i would like to say thank you. Really i am more than happy when i first read your profile through your stand to help the community is really appreciable and i decided to communicate with you and need support from you how to get donors and advice for the new charity organization?

Hearing positive reapply from you
yours
Anteneh

Nell Edgington
June 13, 2011

Anteneh,

Thanks for writing. I’ve sent you an email with more detailed information, but in the meantime, check out our Tools page for help raising money, particularly for new organizations (www.socialvelocity.net/tools) and also, take a look at our revenue planning consulting services (http://www.socialvelocity.net/services/development-revenue-plan/). Let me know if you are interested in learning more.

The cooperative,do group savings,shareholdings,investments and share the profits.Our vision is prosperity for the poor.We mobilize members,through workshops on developmental proggrames that are initiated by the cooperative to enable the communities to increase on house hold income,improving the standards of living among them.

Howevrer we are limited by finance to implement most of our projects which could otherwise benefit the communities.

Therefore we request your office for a hand of support so tha we can implement them.

Nell Edgington
June 27, 2011

Thanks so much for writing. Social Velocity is a management consulting firm that helps nonprofits create social impact and find financial sustainability. In terms of our revenue planning consulting services, check this out: http://www.socialvelocity.net/consulting/development-revenue-plan/.
Or, if you would rather download a tool, take a look at our Revenue Plan Guide here: http://www.socialvelocity.net/tools/store/revenue-plan-guide/. Let me know if you have additional questions as you look at these resources. Thanks!

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