Unable to Raise Funds? These Fundraising Challenges May Be the Culprit

September 5, 2019 - 48 minutes read

On Jan 2018, Trump passed the new Tax cut and Jobs Act, that was the most significant overhaul of tax policies in the US in decades. It impacted every business, industry, corporation, and individual.

The nonprofit space was no an exception.

donald-trump-tax-plan-fundraising-challenges

A lot of organizations immediately named this act as the sole reason for a decline in charitable giving.

However, data soon proved them wrong. You see, charitable giving is up (by 0.7%).

Yes, the increase in standard deductions and the new excise taxes did make an impact on donations. However, it did not influence individual contributions, as claimed.

What does this mean?

It means that people don’t give only to evade tax. Compelling statistics show that people give out of genuine philanthropic interest, thus leading to an increase in charitable giving.

Compelling statistics show that people give out of genuine philanthropic interest & not just to evade tax. Click To Tweet

That is great news.

If prospects and donors are anyway willing to give, then encouraging them to donate for your cause should be simple. Fundraising for your nonprofit should be a lot easier.

Unfortunately, that is not the case. A lot of nonprofits (maybe yours too?) still struggle to raise funds for their cause.

Despite an increase in charitable giving and a more willing audience, nonprofits find fundraising difficult.

What this means is that the challenges for fundraising are more complex than we give it credit for. It cannot be pinned down into one particular fundraising challenge, but a multitude of factors that work together to impede your success.

On a broad level, here is a classification of the various challenges that you could potentially be struggling with.

  • Influence of Global Trends
  • Organization Level Problems
  • Process Level Problems

Let us look at each problem in detail and see how you can overcome it.

The nonprofit industry is evolving. Prospects and donors are changing their behavior, the way they communicate, and of course, the way they give.

For instance, in 2017, traditional TV and media-inspired only 9% of donors to give, whereas this number was a lot higher in previous years. This number could still change (probably increase) if Netflix and Prime videos link their advertisements to traditional TV.

Similarly, The Internet of Things – of home devices in Google Echo and Alexa is expected to open up new ways of giving (boy, will that be exciting times!).

These are but some changes that impact how donors give. There are a few more trends that influence the nonprofit industry as a whole and pose as a fundraising challenge.

You might like: 24 Tested Fundraising Strategies for Nonprofits – Which Ones Are You Using to Raise Money for Your Cause?

Higher donor expectations

For nonprofits, soliciting funds from individuals is nothing new. Here is an old charity ad that was used to encourage people to give: (this was way back in 1927).

fundraising-ad-1927

The overall message for the ad is clear – just make the monetary contribution and you are done. I wanted to share this because it gives you crucial insight into the then donor’s mindset.

The donors were happy to contribute and then rely on the nonprofit to carry on the work.

Over the past 20 years, this mindset has slowly but definitely changed. Every donor wants to be more involved in their nonprofit’s cause.

For instance, after a fundraising effort, 59.8% of participants want to know how much total money was raised, 44.5% want to know how the funds raised will be used.

Donors are acting more and more like shareholders of for-profit ventures, demanding more transparency, greater accountability, and better results in regard to their social investments.”

Tarsha W Calloway, Executive Director of Corporate Relations, Emory university

The challenge for your nonprofit would be to meet this expectation – to keep the donors informed with personalized messages and thus keep them happy.

As a nonprofit, I know your instant response would be, “But, we already send them messages, what more can we do?”.

Solution

The key is to send them messages that they want to read – the messages they expect from you.

To do that, the first step is understanding the kind of messages that will resonate with your audience.

Your donors do not expect generic thank you notes. They do not want to be bombarded with donation reminders. They do not wish to be contacted at random with another fundraising ask.

Here is a summary of what donors across age groups typically expect their nonprofits to tell them:

follow-ups-donors-expect
Pic courtesy: Donor Experience Study, Community brands

How can you go about sending such targeted follow-ups?

  • Segmentation: Segment your audience right so that you can make the messages more personalized. The segmentation can be based on audience demographics (as the above example), or based on an event they attend or even based on how they give. Eg. You can segment all those donors who gave for #GivingTuesday and then send them follow-ups.
  • SMS solution: In the above picture, notice that every segment of the audience wants a text update or donation confirmation. So you must have an SMS software that allows you to send instant updates.
  • Original content: The content you send should talk about the impact you create on the ground. How did you make a difference in the cause you believe in? Who benefitted from your efforts? How much farther do you have to go? These are all questions your donors are interested in knowing.
  • Personalization: Generic mass messages no longer strike a chord with your donors. If you want to inspire them to take action, then your messages have to be targeted to their behavior. What cause did they previously give to? What channel to do they prefer to communicate in? Do they have specific interests that you can connect to, in your message? Think of these questions when you draft your message to make it as personalized as possible.

More competition

The nonprofit sector has grown by more than 20% in the last decade. This is huge. By comparison, the for-profit industry has grown only by 2 to 3%.

So, there are now 1.5 million 501(c3) in the US – with a majority of them doing similar work. A direct result of this is that the limited resources available are spread very thin.

Nonprofits have to compete with each other to get the attention of donors and precious volunteer hours.

Worse, the grants and government funding are also being divided between the eligible organizations – resulting in less funding for each organization.

This impacts the sector in two ways:

  • Nonprofits resort to drastic fundraising efforts to catch up with the competition. They increase the number of fundraising events, the type and also make higher asks.
  • Donors have a higher probability of switching the organizations they support – because they now have a variety of options to choose from.

The above impacts, combined, are not exactly good news. An increase in fundraising efforts also means an increase in overhead costs.

And with donors turning to other nonprofits, you have to actively work on retention strategies to keep them loyal.

It essentially means that you now have to try harder to get the same amount of support you enjoyed previously. And that is a tremendous drain on your resources.

Solution

Actively working on donor retention and brand image are undoubtedly great ideas to retain supporter’s interest.

However, a quick way to differentiate your nonprofit would be to revisit your mission and vision statement. Make it as specific as possible. It will help you reach donors who are solely interested in the cause. It will also help you stand apart from other nonprofits who seem to be in a similar space.

Cut-backs on traditional funding

Libraries & Museums, Hospitals, and Teaching Institutions depend most on government funding. 66% to 73% of their revenues come from government.

Similarly, Grants from corporations and foundations also form a crucial revenue source for a lot of nonprofits.

A vital aspect of both these revenue streams is that it comes in annually and is predictable. So a nonprofit can use these resources to plan their budget.

Unfortunately, govt funding and grant funding have markedly decreased in the past years.

A cut in either of these funds is a severe blow to an organization’s revenue. It means that they have to work harder to raise funds from other sources.

Or, they have to skimp and save on overheads to continue working for their cause.

Solution

If the government makes a policy change and decides to cut your income this year, there is precious little you can do about it after it happens.

But you can watch for signs and predict whether the government pockets would be generous in the upcoming financial year.

The kind of budget planning for the fiscal year, the current economy, the government’s primary goal – can all give you a relatively accurate picture of how much funds to expect from the government.

Regardless of your predictions, it is always better to diversify your income stream. Soliciting individual donations have always been the most popular fundraising method for all nonprofits. Otherwise, you can also look to corporations to help you with matched donations. Here are 24 fundraising methods you can use to diversify your income.

The rising popularity of socialism

In this context, socialism can be simplified to ‘the use of government to solve social problems.’ In 2019, 43% of Americans say that socialism is a ‘good thing,’ as opposed to a mere 25% in 1942.

This means that more and more Americans are looking to the government to solve critical social issues.

Such a belief directly affects philanthropy and charitable giving. The more people think that it is up to the government to handle social issues, the less likely the public is to initiate and support private efforts to address societal needs.

So they do not contribute to your nonprofit’s efforts – neither in cash nor kind or volunteering effort to help you with your mission.

Solution

Targeted emotional messaging is the best way to counteract the unwillingness of the public to take responsibility.

At each step of the way in your nonprofit marketing, reiterate how an individual can make a difference. Explain why it is that the government alone can’t solve this particular problem and how crucial public help would be to achieve your mission.

Tailor all your messages to speak to the audience’s emotions – and craft it to strike a chord with them.

Religious affiliations

There is a strong correlation between religious affiliation and charitable giving. People who have a strong religious affiliation tend to give more – be it to religious charities or generic ones. GivingUSA finds that 62% of religious households give to nonprofits of any kind, compared to only 46% of households with no religious affiliation.

The problem now is that there is a marked decrease in such religious sentiments. While 70% of Americans were religiously inclined in 1999, this year, the number has dropped to about 50%.

As a result, the other 50% of the population which claims to be non-religious has lesser propensity to give, contributing to declining funds for you.

Solution

As with the trend of socialism, there is nothing you can do to shake people’s beliefs. You cannot tackle the root cause of the problem here.

What you can do is focus on messaging – make it compelling so that it inspires everyone to donate.

Election cycle

If it is an election year, you can be sure that your donors and prospects are heavily distracted with ongoing politics to pay much attention to your organization and its cause.

As a result, you would automatically assume that it will negatively impact your fundraising efforts.

Surprisingly, that was not the case. According to a study by the Blackbaud Institute, donors who gave to federal political campaigns in 2012 gave 0.9% more to the charitable organizations that year than what they had previously.

In contrast, donors who did not give to political campaigns reduced their giving to the charities that year by 2.1%.

While this trend is promising and works directly in your favor, there is one nuance you must consider. Party affiliations hugely influence the giving behavior of these donors.

Partisan donors give less to nonprofits when they are not in the majority. So even though a prospective donor would be willing to donate for your cause, they would give considerably lesser than what he would have had his party been in power.

As a result, your fundraising efforts once again turn up short – due to no fault of yours!

Solution

Focus on your messaging. Make it as targeted as possible so that partisan prospects understand why their contributions are essential despite the election outcome.

Also, see if you can remove your organization and cause entirely from the election frenzy. Your prospects need to understand that your mission is beyond the election results, and their contribution is required in order to make a difference.

Distrust of nonprofits

As with any industry, scandals in the nonprofit sector do arise. The impact on fundraising, however, is quite drastic.

Here is one such scandal that rocked the boat more than 3 years ago.

olive-cooke-scandal

Popularly known as the Olive Cooke scandal, this article describes how one donor was ‘heckled’ endlessly by charities for donations. It hinted quite strongly that this excessive targeting was a significant cause in her depression and subsequent suicide.

It resulted in a significant outcry against the nonprofit organizations, seeing them as companies that only care for money and little else.

Such a marked change in perspective spawned distrust.

That was a problem- because trust influences propensity to give and the amount given. So, a prospect who trusts your organization would not only be likely to give, but they would be inclined to contribute a large sum as well.

However, this trust factor took a hit. 32% said that they trust their nonprofits a lot less than what they did before. This sentiment directly impacted their donation – leading to lower fundraising number for you.

Solution

You can’t build trust and form a relationship overnight. It happens with successful donor cultivation followed by intelligent stewardship after the ask.

Follow the hierarchy of fundraising ask. Do not make the ask at the first touchpoint, but build-up to it.

Ensure that what you ask is something within the potential of the prospect to give. For instance, the young, eager millennials would not always have money to spare for your organization. However, they would be prime candidates to approach with volunteer requests as they are the demographic with the most time (and energy) on their hands.

After the ask, it is vital to acknowledge the donation that was granted. Also, before you make the next ask, donors would like to know how their money created impact. So, if you can send them that information too and personalize it, it would go a long way in them learning to trust your organization.

Remember, by doing such personalized cultivation and engagement, you are not providing an exceptional donor journey. You are merely giving the donors what they expect (yep, donor expectations have shot up!).

So, ensure that you make engagement and stewardship a part of your donor journey and not a separate aspect of your fundraising plan.

Read next > Donor Thank You Calls: Writing the Perfect Script

Organization level fundraising challenges

The person who said, “The hardest thing to do in life is letting go,” has clearly never tried running a nonprofit.

As a nonprofit professional, talking to funders and meeting their expectations is a large part of what you do. While talking to some of them, I am sure you have seen this: donors do not realize is that running a nonprofit costs money.

Despite having volunteers to help out with the cause, you still have a tonne of bills piling up. There are operating costs, administrative costs, development costs, and all the million variables (like utilities, phone and communication costs) that has to be paid for.

Unfortunately, your funders don’t realize it. Such an unrealistic understanding of the costs involved in running a nonprofit leads to mismatched expectations. They want more done with less money.

This triggers a series of reaction, that is commonly called the starvation cycle.

Here is how it goes:

  1. Unrealistic expectations from funders
  2. Pressure on nonprofits to conform to those expectations
  3. Cutting corners and underreporting of expenses by nonprofits
  4. Feeds back to and reinforces the unrealistic expectations by funders

With time, nonprofits are slowly bled dry – as they are expected to give better results with fewer funds.

Lack of resources

The most significant side effect of this starvation cycle is seen in step 3- where nonprofits cut corners and under-report expenses to ‘spend less’.

‘Cutting corners’ for nonprofits means skimping on overheads. It means not having competitive pay for the staff.

More importantly, it means not using tools or software to help their efforts and leaning heavily on volunteers to help out.

A severe impact of this skimping is the inability to attract talent and the right skill set for the organization. That is why, a consistent concern for nonprofits, 8.5% saw staffing and volunteer recruitment challenges atop their list of concerns for 2018.

It also means that staff does not get the necessary tools (or training) to do their jobs well.

So what happens when a group of unskilled fundraisers engage donors and try to raise money? You guessed it – the effects are subpar. Not enough money is raised.

Which, in turn, leads to even fewer resources at their disposal and the vicious cycle continues.

vicious-circle-lack-resources
Solution

Tackling this problem would be like solving the ‘chicken or egg’ question. What would you address first? The lack of resources or the lack of funds?

Research suggests that tackling the root of the issue – the unrealistic expectation of funders with respect to nonprofit and fundraising can bring about significant positive change.

Unfortunately, this is not easy. The power dynamics between the funders and nonprofits is skewed. This makes it impossible for the nonprofits to stand up to the donors and explain to them the actual overhead costs.

Worse, they run the risk of losing their donors if other nonprofit organizations don’t take up the same stance.

Thus, unless there is a sector-wide change in the nonprofit industry, with honest discussions with the funders, this situation is loath to resolve soon.

Lack of leadership

In any nonprofit, it is the development director who is in charge of raising funds.

He takes care of planning, budgeting, and running fundraising events. He makes the donor lists, strategizes fundraising for the year, and helps with donor solicitation and cultivation.

It is such a critical role that a majority of nonprofits rely solely on their development directors to raise funds.

The problem is that such a crucial role is hard to fill with the right talent.

  • In organizations where the position is vacant, it has been vacant for a minimum of 6 months. So it is not a position that is quickly filled. 53% of executive directors mentioned that their vacancy attracted an insufficient pool of applicants.
  • The directors who are in the role are not great at what they do. 1 in 3 executives was ‘lukewarm’ about (or outright dissatisfied) with their current development director.
  • Of the development directors who have been recruited, 40% said that they were not committed to a career in development.

This vacuum in leadership, that too at such a critical role heavily costs the fundraising efforts. The existing staff and volunteers are either overworked or do not get the assistance they need to carry out their tasks.

development-director-departure-anticipation

As a result, lesser donors are acquired, even lesser retained and the fundraising events do not perform to their potential – resulting in a significant loss of revenue for the organization.

Solution

The answer to this problem is two-fold. It is not just attracting the right talent, but also retaining it.

Since organizations are anyway raising less money, they find themselves unable to pay the right compensation for the talent (refer to skimping on overheads).

The solution to this problem begins with an attitude change within organizations – wherein nonprofits are encouraged to match the compensation that is required to attract talent.

Think of it as an investment for your fundraising efforts – without a good leader to see it through, the cost to your organization could actually be higher.

To ensure that the directors stay, offer skill development, and career advancement courses for your employees. They should see it as an attractive role – a role that not only enables them to work for a cause they care about but also helps them build a well-paying career.

Missing culture of philanthropy

Who is responsible for fundraising in your organization? 

If you had just answered the development director or even the executive director, you are dead wrong.

Everyone is responsible for fundraising in your organization.

Right from a board member to the newest volunteer, each of them has to care enough about the cause to go out and raise funds.

That means, to succeed at fundraising, it is not enough to hire a top-class development director. It involves creating an organization that has a culture of philanthropy. Each member in your organization should regard fundraising as a part of what they do – and not treat it with vague distaste.

“ Fundraising is not something I enjoy doing. I don’t like having to ask people. And the problem in this community is that this is a very involved community of people, and you just get to the point where you feel, ‘I can’t ask my friends anymore.” – Board Member

This quote above summarizes the underlying problem succinctly. Even the board members do not feel comfortable raising funds.

philanthropy-culture

Soliciting funds is looked down upon, with the majority of the organization happy to hand off the responsibility to the development director. The immediate impact is the piling expectations on one person – which he could struggle to handle.

The long term impact is the risk of building an organization that does not see fundraising as crucial to helping their cause. Yes, it is all very well (and essential) to do work on the field. But it is equally necessary to be willing to talk to prospects and solicit donations for your cause.

Solution

Once again, we face a situation which cannot be fixed instantly. One part of the solution is sensitizing your staff to the realities of fundraising – of how crucial it is and why it is always their problem.

Most people in the organization (across positions) act as ambassadors and engage in relationship building. Everyone promotes philanthropy and can articulate a case for giving. Fund development is viewed and valued as a mission-aligned program of the organization. Organizational systems are established to support donors. The executive director is committed and personally involved in fundraising.” – Simone Joyaux, ACFRE, Strategic Fund Development

It is crucial to make them understand that asking for funds is totally acceptable. Yes, it is a delicate issue – but it is not something to be embarrassed about. And the more passionate you are about the cause, the more critical it is to go out there and get the funds for it.

Another part of the solution is just getting the right kind of people for the job. A board member who shies away from fundraising because ‘it is not his cup of tea’ is setting a terrible example for the rest of your team.

Determine acceptable behavior and establish organization guidelines for everyone. It should clearly reflect the expectations you have from your team vis-a-vis fundraising efforts.

Difficulty getting corporations involved

Corporate giving is increasing – by a solid 8% in 2017. That is good news – it means your nonprofit can look to corporations to diversify its fundraising efforts.

However, as Oscar Wilde once said, ‘the truth is rarely pure and never simple.”

The grants and funds stemming from corporations come with its own stigma. Let me explain that with an example.

The Chan Zuckerberg Initiative has committed to using 99% of Facebook stocks owned by Chan and Zuckerberg towards philanthropic development. That means (among other charitable efforts), it is handing out an average of $ 3 million in grants every year to aid the housing crisis in Silicon Valley.

The housing crisis (i.e., the insanely high cost of living in the region) has been a result of the software boom in the area – a boom that Facebook itself was at the forefront of.

So, this gesture is seen as a response to a problem that Facebook and other Bay area corporations themselves aided and abetted in creating.

Associating with such grants can seriously harm nonprofits. It would impact the trust they have built with their donors; could potentially tarnish their image and result in a severe drop in individual donations.

Solution

Shutting yourself away from corporate grants because of the halo harness is not an option. The funds you bring in could be extremely crucial for your cause. So talk to your board members about ethical fundraising and determine what is acceptable for you.

Keeping on top of regulatory changes 

Let us go back quickly to the tax cut and jobs act. While it did not affect charitable giving as expected, it still highlights a vital issue in the nonprofit fundraising sector.

A lot of regulations have come up that make it difficult for organizations to solicit funds. These regulations are of two kinds:

  1. Laws that affect taxation: And thus charitable giving
  2. Laws that affect the nonprofit: And hence the type of work they do and the way they can solicit funds

It shows that their sector is especially vulnerable to regulatory changes. And keeping on top of those changes is crucial.

Otherwise, you are raising funds via illegal and unethical methods and risk having your nonprofit status revoked.

On a day to day basis, this translates to knowing which forms to fill and submit (i.e., is the IRS form 990 sufficient or do you need to add more supporting information). It could mean knowing when your charity has to publicly record all the costs that go into fundraising efforts (FYI, according to the Lobbying Act, if it impacts political issues and is within six months of the election period, then you should do so).

Given that these laws change widely from country to country and even region to region, it is quite a feat for nonprofits to be always on top of them. Long term fundraising efforts have to be carefully planned so that it adheres to even new laws if they get enacted.

All of this, as a whole adds tremendous stress on the organization to monitor the legal scene.

Solution
  • Giving every member in your team a detailed picture of the legal system affecting nonprofits
  • Encouraging them to always be on top of legislative changes
  • Having a flexible framework that can be tweaked in response to a new act.
  • Empowering them to think legally about the consequences of their efforts.

Prejudice against ethnicity and race

There is no easy way to say it. Despite the advancements, despite the philanthropy, and all the education, leaders of color face considerably higher challenges than their ‘white’ counterparts.

race-ethnicity-prejudice
Pic courtesy: Building Movement, Race to lead brief
Solution

Diversify your team. Bring in more people from different backgrounds so that you have quite a number of perspectives.

Keep your eyes peeled for signs of racial prejudice. Most times, they are not reported. Be ready to act on it and rectify it instantly.

Process level problems

Fundraising has always been about managing and meeting donor expectations. However, with the rise in offline and online touchpoints, nonprofits are struggling to streamline their efforts across channels to provide donors a great experience.

For instance, using social media for fundraising is still a relatively new concept that a lot of nonprofits are trying to get right. Integrating such new channels into the already existing fundraising mix is another one altogether. 

In this context, let us look at the kind of challenges you, as a nonprofit, probably face and how you can tackle it.

Multichannel engagement and donor experience

What are the average touchpoints for your donor?

Research says that it takes anywhere between 7 and 12 ‘touches’ for a prospect to become a donor. Here are a few touchpoints that he could come across:

  • Website
  • Email
  • Newsletters
  • Direct mail
  • Videos
  • Social media posts
  • Events
  • Print Collateral (flyers)
  • Media coverage
  • Phone calls
  • SMS

As a nonprofit, I am sure you already have some (if not more) of these touchpoints in place.

The challenge comes in unifying all these touchpoints to provide a consistent donor experience.

Currently, you are probably operating in silos, where there is not enough transparency across teams (not by design, I am sure).

Let me give you an example. Your stewardship team is sending out newsletters to all donors and prospects. If any of these donors have had an interaction with your organization before, that is not reflected in terms of personalized messaging in the newsletter.

unique-constituent-journey

Say, a volunteer calls a prospect with an Ask. If the prospect says no, then the volunteer makes a note in his system and moves on. Nowhere does this information get passed down across the funnel for the next team to make the communication more personalized.

That means, there is a lot of overlap between the different touchpoints. But this is not acknowledged or used to give donors a better experience. Worse, it does not recognize that each donor is different and is on a different donor journey. This obviously impacts the donor journey negatively.

Solution

What you can do from your end is to set up a seamless engagement series for your donors. A seamless engagement is not about posting the same message on every channel. It is about how effortlessly can your donors switch from one channel to another without compromising on the donor experience.

  • Mapping donor touchpoints and journeys
  • Sending personalized content to every unique cycle (as in, when a donor clicks on a CTA, does he follow a programmed journey, designed by you?)
  • Making each content targeted and not ‘crammed’ with everything you want to say

Using social media for fundraising

Despite the popularity of social media, a lot of nonprofits are still figuring out how best to use it to make an ask.

Yes, you can run ads on Facebook to raise funds for your cause. But fundamentally, social media is about building a supporter base. It is about getting your supporters to witness the change you are trying to bring and the efforts that go behind it.

Grasping this difference in how the channel can be used makes a tremendous impact on your fundraising process.

Ultimately, social media brings more transparency to your efforts. It helps you build a relationship with your supporters, increase their trust in you, and follow your efforts on a day to day basis.

Related: Improve social media fundraising with these tips

Solution 

How social media works for your organization largely depends upon the kind of work you do and what you want to achieve.

Here are some general best practices that you can follow:

  • Use your account to tell stories – real stories on why your mission is essential and how you are tackling it.
  • Take to social media to thank your donors – this will build trust and social proof for your organization.
  • Use social media to share volunteer stories – talk about their struggles and wins. This will humanize your organization to your followers.
  • It is also vital to catalog where you fell short – you can also use social to share the everyday struggles you face. It need not be an appeal for help. But just an account of the challenges you face.

Tailor your message depending upon the channel you are posting it in. Ensure that you share stories (with images) that your supporters won’t get elsewhere (on your site or your newsletters). Here are some more tips on how you can use social media for fundraising.

Tracking efforts

Let us now look at some hard numbers.

How many donors who gave to your cause previously gave again in this fundraising effort? What was the average gift size? Was it higher or lower than before?

Having an idea about all these numbers (and some more) will show you the ROI of your fundraising efforts.

Unfortunately, a lot of nonprofits struggle when it comes to keeping track of their efforts.

This could be because:

  • Fundraising efforts are sometimes planned last minute – which makes it challenging to plan the tracking metrics
  • Not all nonprofits can use fundraising software to keep track of their efforts (not enough budget)
  • And finally, a lot of organizations do not know which metrics to track
Solution

Investing in fundraising software is paramount. Think of it as an overhead cost for your fundraising efforts.

With that software, it would be easy to track where you failed and how you can improve.

Another aspect of finalizing before going live with your fundraising effort is knowing what metrics to track.

Here is a list of metrics that an organizations track. There are 16 in total. Depending on what makes the most sense for your organization, you can start tracking them.

  • Cost per dollar rate
  • Fundraising return on investment
  • Donor retention rate
  • Donor growth
  • Conversion rate
  • Number of gifts secured
  • Matching gifts rate
  • Average gift size (can be a separate metric for major donors)
  • Average gift capacity of donors
  • Engagement metrics (frequency of contact with donors)
  • Channel with most fundraising success
  • Asks made
  • Fundraising participation rate
  • Online gift conversion rate
  • Email conversion rate
  • Email opt-out rate

Remember, to be tracking all the above metrics, your organization should be mature enough to have the data. If not a lot of these numbers won’t make sense. For instance, if you are building your donor email list, having a high email opt-out rate is expected.

Similarly, the online gift conversion rate will be on the lower end for smaller and newer nonprofits.

What these numbers will give you is perspective on what to improve, what to aspects look at to grow your organization.

Your turn

Which of these problems are you facing or have faced over the course of building your nonprofit? How did you respond to them? I would love to know. Just drop me a note at [email protected], and we can talk.

PS: Have I missed any challenges here? What more would you add?

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