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Over a one-year period, it is common for nonprofits to lose 96 donors for every 100 donors gained, according to a study by the Urban Institute regarding fundraising effectiveness. As a result, the nonprofits involved in the study needed to raise roughly an additional $4.7 billion to help cover the $4.3 billion lost to donor attrition.
This is a typical scenario for many organizations that become overdependent on a small number of donors and consequently risk losing funding for their programming and services. The most successful nonprofits are careful not to rely on a single fundraising project to raise all of the money needed for operation.
In the same way that a diversified investment portfolio benefits shareholders, having various revenue streams will allow your organization to stay afloat even when a sponsorship or campaign doesn’t come through as anticipated.
By diversifying your approach to fundraising, your organization will be better positioned for long-term financial sustainability. Here are several ideas that can protect your nonprofit in the event of a financial downturn:
1. Establish a monthly giving program
Monthly giving programs not only offer a consistent revenue stream for your organization that can help spread out cash flow, but they are also a great way to reward recurring donors. Often, registering for a monthly giving program means being charged automatically for a certain amount, which eliminates the hassle of filling out donation forms (or remembering to donate more generally!).
Giving your supporters the chance to contribute a small monthly gift can also make donating more manageable compared to appealing for a large, one-off gift. For example, a one-time $300 donation becomes a monthly payment of just $25. Think of how many more people have at-home video streaming services due to the monthly payment structure rather than a one-time annual cost.
When asking donors to register for a monthly giving program, you’ll want to promote any exclusive perks they’ll receive. Some examples of benefits you can include are quarterly progress updates, a welcome gift, an end-of-the-year keepsake and/or merchandise or photos/videos of the people their donation has impacted.
2. Leverage existing donations
If your organization received a major gift, you can leverage the existing donation to bring in even more funds. Creating a matching gift campaign can motivate donors to raise a certain amount in a specific timeframe. When coupled with a recurring giving program, matching gift campaigns have great potential to become consistent revenue streams for your organization.
If you don’t have one donation that’s large enough, pooling gifts from several donors will make sure your matching campaign is a large enough sum. Most importantly, the key to running a successful matching gift campaign is to create a sense of urgency. A rigid timeline with set goal markers will make sure donors are engaged in the campaign every step of the way.
3. Integrate Peer-to-Peer Fundraising
Instead of allowing supporters to merely make their gift and move on, ask your volunteers, donors and event participants to play an active role in fundraising. Peer-to-peer fundraising gives your supporters the opportunity to ask their friends and families for donations, which can increase your revenue streams exponentially.
According to the 2018 Global Trends in Giving report, 67 percent of worldwide donors also volunteer locally in their communities, with 56 percent regularly attending fundraising events. These statistics show donors’ willingness to participate in community events, making peer-to-peer fundraising a viable strategy for garnering increased support.
While peer-to-peer fundraising can take many forms, here are several approaches to get you started:
By diversifying your approach to fundraising, you can help protect your organization from external issues that are out of your control. Executing any of these strategies will not only create new revenue streams, but they also will create the opportunity for donors to become long-term champions for your cause.
Do you have questions regarding your approach to fundraising? Please contact your Marvin and Company, P.C. representative.