As the saying goes, “Don’t put all your eggs in one basket.” This advice holds true for nonprofits seeking financial stability and growth. Relying solely on one source of funding can be risky, leaving organizations vulnerable to sudden shifts in the economy or changes in donor priorities.
To mitigate these risks, diversifying your fundraising revenue is crucial.
In this guide, we’ll explore five ways to create a more resilient and adaptable financial foundation. Whether you’re a small grassroots organization or a well-established nonprofit, these insights will help you achieve fundraising success.
1. Prioritize Matching Gifts
Matching gift programs are a form of corporate philanthropy in which companies agree to financially match the donations made by their employees. For example, if an employee donates $100 to your nonprofit, the company will also contribute $100, effectively doubling the impact of the donation. If you’re interested in expanding your nonprofit’s donor base beyond individual contributors, follow these tips:
- Educate donors about matching gifts. Inform donors about matching gift programs and how they can double their contributions. Include resources about matching gifts on your website, in donation appeals, and on various other communication platforms. Clearly explain the process and provide instructions on how donors can check if their employers offer matching gift programs.
- Research matching gift companies. Review matching gift databases and compile a list of companies that have matching gift programs. This will help you identify potential matches for your donors and guide your outreach efforts.
- Streamline the matching gift process. According to Double the Donation, when the matching gift process is straightforward, donors are more inclined to participate. Invest in a matching gift platform with auto-submission to streamline the process and raise more matching gift revenue without any additional effort from you or your donors.
Analyze your fundraising data to understand which campaigns or donor segments are best suited for matching gift appeals. Use this information to refine your strategy over time.
2. Cultivate Corporate Partnerships
Building strong, mutually beneficial relationships with corporate partners can advance your nonprofit’s mission and benefit your partner’s social responsibility efforts. Identify companies whose values align with your nonprofit’s goals or who have demonstrated a commitment to causes similar to yours. Then, use these tips to solicit their support:
- Customize your pitch. Tailor your partnership proposal to showcase how collaboration will benefit both parties. Highlight how their involvement will contribute to achieving their corporate social responsibility (CSR) objectives while advancing your nonprofit’s mission.
- Showcase impact. Corporations want to see results and your effective use of their resources. Provide evidence of your nonprofit’s past successes and your ability to deliver on your promises. Clearly outline how their support will make a difference and how you will measure and report on the partnership’s impact.
- Create customized partnership packages. Offer a range of partnership options that cater to different corporate interests and budgets. This might include sponsorship opportunities for events, employee engagement programs, cause marketing campaigns, or skills-based volunteering initiatives. Flexibility in partnership packages can attract a broader range of corporate partners.
Then, survey your corporate partners about their experience working with your nonprofit. Act on constructive feedback to improve the partnership and address any concerns promptly. This paves the way for long-term, productive corporate relationships.
3. Develop Recurring Giving Programs
Recurring donations provide nonprofits with a steady and predictable source of revenue. Take these steps to promote monthly, quarterly, or annual gifts:
- Set up recurring giving. Choose a donation platform that supports recurring giving and integrates with your website or fundraising software. Ensure that the platform allows donors to select their preferred frequency and easily manage their recurring donations.
- Identify recurring giving candidates. Gather and analyze data from your donor database, including donation history, frequency, and amount. Target donors who have made larger or consistent contributions, as they’re more likely to have the financial capacity to give on a regular basis.
- Explain the benefits. Add clear instructions for how to opt into recurring giving and explain the benefits of joining your recurring giving program. For instance, you might say that it simplifies giving, provides financial stability to your nonprofit, and allows donors to be part of a community of committed supporters.
eCardWidget recommends extending genuine gratitude for these ongoing gifts. Celebrate milestones, such as their first anniversary of giving, and consider offering small tokens of appreciation like thank-you cards, branded merchandise, or certificates to incentivize recurring donors to keep up their contributions year after year.
4. Leverage Grants
Grants provide a lifeline for nonprofits, especially during times of economic uncertainty or when other funding sources are limited. Nonprofits often use them to help cover operational costs, fund extensive projects or programs, and address emerging needs in communities. In order to secure grant funding, you will need to appeal to foundations, private corporations, and government agencies through grant writing. Adopt these best practices as you write your next grant proposal:
- Find the right grants for your nonprofit. Before starting the grant writing process, thoroughly research and identify opportunities that align with your nonprofit’s mission. Look for grants that specifically support the type of work your organization does and the populations it serves to increase your chances of success.
- Tell a compelling story. Craft a compelling narrative that communicates your nonprofit’s mission, goals, and the impact of your work. Articulate the problem you are addressing, the strategies you plan to employ, and the outcomes you aim to achieve. Use data, statistics, and real-life examples to support your case and demonstrate your need for funding.
- Provide a detailed budget. Include a detailed budget that outlines how your nonprofit plans to use the grant funds. Be transparent and specific about the costs associated with your project or program, including personnel, supplies, equipment, and any other relevant expenses.
Ensure that you understand the eligibility criteria, deadlines, formatting guidelines, and any specific instructions provided by the grantmaker. Adhering to these requirements demonstrates your attention to detail and professionalism.
5. Invest in Major Donor Cultivation
Major donors often make up a significant portion of a nonprofit’s overall fundraising revenue. Their support can contribute to your organization’s capacity building, helping you fund staff salaries, technology upgrades, marketing efforts, and other essential operational expenses. However, before you can reap these benefits, you need to cultivate relationships with individuals who have the capacity and inclination to make substantial donations to the organization. To do so, you should:
- Identify prospective major donors. Conduct prospect research to identify donors who have the willingness and capacity to give significant amounts. This can be done by analyzing public databases, conducting wealth screenings, and engaging with professional networks and contacts for referrals.
- Engage prospects. Engage with prospective donors through personalized communications, such as one-on-one meetings, phone calls, or tailored emails. Share compelling stories about your organization’s impact and involve them in your mission through events, site visits, and volunteer opportunities.
- Develop a customized solicitation strategy. Once you have established a strong relationship with a prospective major donor, develop a solicitation strategy based on their interests, motivations, and giving capacity. Describe the specific project or program that their donation will help fund and be prepared to answer any questions or concerns they may have.
Consider hiring a major gift officer to oversee and enhance the cultivation process. A major gift officer is dedicated to building relationships with major donors, ensuring that they are properly engaged and stewarding their support. This focused approach to cultivation can lead to stronger connections, increased donor loyalty, and a higher likelihood of major gift contributions.
Remember, diversifying your fundraising revenue requires a strategic approach tailored to your organization’s unique circumstances and resources. Continually evaluate and adjust your fundraising strategies based on donor preferences, market trends, and the effectiveness of different channels to maximize your fundraising efforts.