The Blackbaud Institute recently released its 5th Annual Charitable Giving Report covering 2016 results across nearly 7,000 nonprofits. The news is somewhat sobering.
In 2016 charitable giving grew just 1% over the previous year. Small nonprofits experienced zero growth. A bright spot included online giving, which increased nearly 8% but represents only 7% of overall fundraising.
Sectors with growth included arts and culture, higher education, and medical research. But there were declines in healthcare, public and society benefit, and environment/animal welfare.
Amidst this background of an increasingly challenging fundraising environment, we have a few tips for growing your 501c3 organization and managing it.
Three Types of Growth
For any nonprofit there are three types of growth:
- Increasing program service levels and, as a result, the revenue they generate.
- Adding new programs that bring their own revenue streams.
- Joining forces with other organizations, either on joint programs or through mergers.
The first two require either additional funding or doing more with the same number of staff and the same level of funding. We’ve all been there and done that. It can work, but usually only for a relatively short period of time. More likely, it causes burn out and we end up churning our way through staff and volunteers.
The third type of growth is happening more and more as organizations with similar or complimentary missions match up and develop joint programs with a broader appeal. Or, they directly join forces and find synergies typically around cost savings in staffing levels and leveraging technology systems across a broader array of programs.
Funding Your Growth
Regardless of the methods and approaches you use to grow your organization, it’s going to require additional funds to first generate that growth and then to support it over the long haul.
We’ve written extensively on fundraising over the years, based on our work with nonprofits of every size across a wide array of missions. I recommend our posts “10 Nonprofit Fundraising Best Practices” and “10 Answers Needed to Create a Solid Fundraising Plan.” And I particularly like “7 Fundraising Ideas to Consider in 2017."
All these posts point to ways of engaging your prospective donors using a solid fundraising plan. Here are a few of the key methods:
- Inbound marketing is all about building online content that serves to attract supporters and potential supporters to your organization’s website. Once they’re on your website, you have an opportunity to move them from strangers to supporters and from donors to promoters.
- Peer-to-peer fundraising leverages existing donor enthusiasm to reach new potential donors. In this way it builds relationships, expands your audience, and is very cost effective.
- Events, when done properly to align them to the interests of your donors, can generate a great deal of interest, move donors into a setting where you can reach them with your message, and help them feel good about their support and donations.
- Direct marketing is still a key source of fundraising with a response rate of 3% to 6% with house lists. This is a must have part of your fundraising.
- Telemarketing is the top source of fundraising reaching between 10% and 20% with house lists and 4% to 8% with prospect lists. It also allows you to engage prospective donors in a conversation about your organization, answering their questions directly and enlisting their support.
Comprehensive Fundraising and Strategic Opportunities
We are also big proponents of developing a comprehensive fundraising strategy that uses all the available methods of generating funds across your donor database as well as growing that database.
Yet, we also note the findings from the Stanford Social Innovation Review about how nonprofits get really big. They point out that small nonprofits can raise funds across a wide array of sources. This is possible in large part because small nonprofit fundraising requirements are small and can be readily supported by smaller donations.
Stanford’s study of nonprofits that reached $50 million in annual revenue, found that across the 110 organization they reviewed, 90% had a single dominant source of funding. Examples include the American Kidney Fund who works mostly with large corporate partners, the National Wild Turkey Foundation focuses almost exclusively on hunters through their local chapters, and Youth Villages receives more that 90% of its funding from state government agencies.
The takeaway is that, yes, you need a comprehensive fundraising program across a wide range of sources and methods. But always be alert to the potential major funding source that truly aligns with your mission. As you find that source, you can then optimize your approach to begin growing in earnest.
Managing Your Organization
Along with growth comes management challenges. Here are a few tips from our experience across many nonprofit organizations:
- Build your board. This is the heart of driving your organization forward. Your board represents your organization’s expertise and experience. Plus, they should be your biggest supporters. Make sure you recruit the best and the brightest for your board and then activate them to bring others in their network to your organization.
- Develop your strategic plan. Without a plan, you’re just making it up along the way. That’s no way to manage any organization. Involve your board and your staff in building a plan that can guide every one of your activities toward fulfilling your goals and objectives.
- Find the right staff. With your strategic plan in place, you should know what your staffing needs are to accomplish your goals. Take the time necessary to find the staff that meets your needs, which includes expertise but also demands a deep connection with your organization’s mission.
- Support your staff. Now that you have your staff in place, it would be foolish to limit the support you provide them to accomplish their jobs. That support includes technical systems and facilities, as well as your encouragement and reward for a job well done.
- Recruit, activate, and enable volunteers. Along with staff support, you’ll need to find eager volunteers to take on many of the tasks your organization needs accomplished. They need to be nurtured and encouraged just as much, if not more, that your staff members.
Raise More Funds
We hope this post has offered a few new tips in growing and managing your organization. And don’t forget the potential to bring in the experts to support all your efforts. That’s where CampaignNow can make a big difference.
We work with a wide variety of nonprofits on all their growth and management efforts. We have the services, the experience, and the expertise to help with whatever challenge you’re currently facing.
You can contact us at (855) 329-4327 or info@campaignnowonline.com.
