Nonprofit Fundraising: The Complete Guide

Nonprofit fundraising can be a rewarding and exciting job whether you’re running a simple fundraiser for your local football boosters or making a career out of soliciting corporate giving and grant writing. Nonprofits are charitable organizations by their very nature, meaning there are restrictive rules and regulations that these entities must follow that make fundraising a unique and challenging affair.

The bigger your nonprofit organization, the more significant and sophisticated your fundraising efforts have to be. And the more it begins to grow and thrive, so, too, must your fundraising ideas and strategies. A fundraising campaign can be incredibly simple, but the simplest plans often come with the most meager returns.

With a little more planning and a lot of elbow grease, you can build a robust fundraising campaign that will reel in donors not just when you need them most, but on an ongoing basis, sometimes for years to come. Creating an ongoing nonprofit fundraising strategy with continuing gains is just as important as meeting your fundraising targets.

What Does Nonprofit Fundraising Mean?

Nonprofit fundraising, simply, is an effort to generate revenues in support of a nonprofit organization with a charitable mission. A nonprofit has certain restrictions on how it can make money and how those funds can be used. As a result, nonprofits don’t have the benefit of conducting traditional profit-seeking business activities. Instead, they typically must rely on fundraising through seeking donations from individuals and corporations.

Nonprofits can come in all shapes in sizes with different missions and goals. The most common types of nonprofit organizations are committed to educational goals, healthcare, and those benefiting underserved communities & human rights efforts. There are also numerous nonprofits established to serve the arts and humanities as well as scientific research and environmental causes. In fact, even religious institutions can be classified as nonprofits so long as they don’t collect profits.

In all of these cases, the most common way of maintaining the organization’s financial health is through soliciting charitable donations. This can take many forms, which we’ll cover later on in this discussion. Because fundraising is a critical part of maintaining a healthy pocketbook for a nonprofit, the outreach and fundraising efforts can be one of its costliest expenses. Ironic, eh?

Fundraising Compliance

A nonprofit organization must be substantially supported by public contributions in order to qualify for its 501(c)(3) tax-exempt status. While it’s not mandatory for a nonprofit to be tax-exempt, the ability to write off contributions as a tax deduction is a significant consideration for prospective donors.

Additionally, nonprofits must report their earnings to the state, and fundraising activities are strictly regulated to ensure the protection of donors from harassment or manipulation. This also helps the state keep track of how nonprofit dollars are being allotted and disbursed, which helps to keep nonprofit organizations honest.

Before soliciting donations for your fundraising event, make sure that you are doing so legally by registering your nonprofit with the government in each state where it operates. If your organization employs a grant writer, that individual, too, must be registered with the state. There are even recommendations from the IRS regarding the best way to structure your organization’s finance and outreach departments to follow compliance best-practices, though there aren’t strict legal requirements that enforce your organizational structure. Note: Any statements herein pertaining to compliance law do not constitute legal advice.

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Different Types of Nonprofit Fundraising Ideas

Depending on the size and the mission of your organization, there are many different ways to raise money that may or may not work for you. Keep in mind that the cause your nonprofit supports will have its own specific appeal that you can often target at specific demographics, and some routes to raising money are more effective in certain sectors than in others.

For example, soliciting individual donations for an educational institution in a region that supports a rival school’s basketball team may lead to a lot of wasted time and resources. And if you need to raise half a million dollars to fund a national research study, you probably won’t get very far by holding a bake sale. It’s important that you understand the types of contributors who are most likely to give to your cause or fundraising effort and target them most heavily.

Whether you’re a local booster’s club for a small high school or a fundraising and outreach professional, there’s always a way to raise money for your cause. Let’s break down some of the more popular fundraising ideas for soliciting donations for events both large and small.

Fundraising Ideas for Soliciting Individual Donations

The following recommendations make up some of the most popular fundraising events for seeking donations from employees, colleagues, friends, and family. These fundraising efforts offer something personally appealing to your potential donors thus making it far more likely that individuals will reach into their own pockets to help with raising money for your cause.

In these cases, you’ll often collect small donation amounts (although it’s okay to establish a minimum) from many individuals, and in some instances, you may find yourself holding multiple events of the same type to reach as many individual potential donors as possible. Remember that while your given cause will have a different appeal to different individuals, people across all demographic categories can be interested in making a donation to a cause they believe in.

Bake Sales, Yard Sales, All Kinds of Sales!

There’s no shortage of fundraising ideas involving selling goods directly to the public. For even the smallest of nonprofit fundraising strategies, you can assemble a crew of friends and family to sell baked goods, old junk from the attic, clothes, or even their old automobiles.

Monte Carlo Events

A casino night, or “Monte Carlo” night, is an event where patrons each make a fixed contribution at the door and receive a number of betting chips to play with in a makeshift casino. Instead of winning a cash prize, the players with the highest chip counts at the end of the night typically receive some sort of small prize, while proceeds from sales at the door go towards your fundraising goal.

Auctions

Hosting an auction can bring in lots of fundraising dollars without having to spend very much money at all. Your nonprofit can collect on a small portion of all sales to go towards its fundraising target while people have a good time bidding on all sorts of unique items. You can solicit private donations or in-kind donations for your auction to source items for this type of fundraiser.

Walks, 5Ks, Bike Races, and Beyond

A simple race like a 5k or a bicycle race is a great way to drive competitive spirit, and you can collect donations or entry fees as a way to fundraise. An even easier way to raise funds is to collect pledges and host a walk-a-thon since participants don’t have to be particularly athletic or competitive in order to take part.

Fundraising Ideas for Soliciting Corporate Contributions

Corporate giving is a great way to meet a much larger fundraising goal where smaller contributions from a single fundraising event just don’t add up enough. The tradeoff is that it takes many more resources to raise money through large corporate contributions. While it can be surprisingly easy to sway individual donors with gifts, prizes, and entertainment, you can’t entertain a corporation. And a corporation’s budget is managed by many individuals with their own ideas of what constitutes appropriate giving (and appropriate amounts to give).

However, corporations enjoy major tax benefits for participating in philanthropic activities, and many of the largest businesses on the planet commit a portion of their annual budget to charitable donation and supporting the types of causes championed by nonprofits. Just like soliciting individual donation, it’s critical to your fundraising success to target corporations that are most likely to be aligned with your charitable mission to ensure your resources are being spent on prospective partners who can help you raise money.

Grants

A corporate grant is essentially a business’s version of making an individual contribution to a nonprofit. Typically, these donations are fixed amounts that are awarded to a fundraising entity that submits an application to the grant review committee as an appeal for financial assistance. This can be a very affordable way of receiving large sums of money, but it’s one of the hardest fundraising strategies because you’re competing with other nonprofits who are vying for the same limited pool of funds.

Matching Gift Programs

Matching gift fundraising is a program in which a corporation matches the donation to your nonprofit made by its employees. Your nonprofit fundraising efforts go twice as far because not only are you collecting off of each individual, but you’re receiving a matching donation from the broader business.

Corporate Co-Ventures

Co-ventures are an ongoing method of nonprofit fundraising in which your nonprofit establishes a partnership with a for-profit entity. You help promote their products or services, and in exchange, you get a cut of the sales as a fundraising contribution. Fundraising through corporate co-ventures can come with certain restrictions and regulations, so make sure to comply with local and state regulations when entering into one of these partnerships.

In-Kind Donations

In-kind donations are a contribution not of money, but of some other need your organization has in its fundraising efforts. Instead of writing you a check, a corporation may elect to offer you free services like access to their legal team or their accounting department. This frees up resources in your nonprofit to allocate to further fundraising efforts.

General Fundraising Strategy & Planning

No matter what type of fundraising goal you have, and no matter what type of nonprofit you’re working with, you’re going to have to manage expenses that tend to increase as you raise money. As a result, a well-planned fundraising strategy is essential to your fundraising success. After all, if you spent $1,000 just to make $500, you didn’t actually raise money at all.

There are two key elements to ongoing success in nonprofit fundraising: the sourcing and retaining of valuable donors, and identifying which groups of donors tend to help you bring in the most revenue. While it always feels good to score high-dollar donations, it doesn’t help you very much if you never speak to those donors again or if you have to spend a fortune just to attract them to your cause.

Determining Needs & Setting Goals

Before you begin planning your fundraising effort, you have to plan for your planning. Sounds redundant, right? But in order to start the preparations, you need to have a thorough understanding of your fundraising goal, and that doesn’t just refer to how much money you have to raise.

You’ve got to know what that money will be used for, why it’s necessary, and when your nonprofit needs to have it. You’ve also got to make sure that you have enough cash on hand and how much return on investment you can expect to even determine if it’s worth spending money to raise money.

Set Realistic Goals

Like we pointed out previously, you can’t expect a bake sale to raise half a million dollars. Once you’ve figured out how much money you need to raise, you need to consider the different paths to success and which ones will work better than others.

If you’re trying to obtain a new MRI machine for a hospital, it’s probably unrealistic to expect that even the most generous healthcare organizations will give you a million-dollar machine through a simple in-kind donation. On the flip side, if you need to raise $5,000 for new jerseys for the local football team, corporate co-ventures may be too strenuous an effort and you might find yourself diving into a project that’s far bigger than necessary to meet your needs even when working with local businesses.

Determine Your Timeline

If your nonprofit needs to complete its project according to a certain timeline, you have to hit your fundraising targets according to that timeline. However, this isn’t as simple as it sounds. For example, you may not be able to determine an accurate cost projection for the entire project before the organization needs to spend a significant amount of money. This means your fundraising targets may change, and you’ll need to meet different targets in succession with different timelines.

You also have to keep in mind how long it will take to plan and execute your fundraiser. If your nonprofit needs to deploy the money you’re raising in 30 days, then you just simply won’t have time to get the word out to effectively raise money from a walkathon. Understand your constraints and make sure you don’t commit to a plan that will fall short due to a lack of available time.

Consider Your Expenses

An individual fundraising strategy often doesn’t cost very much on your organization’s part. In many cases, you’ll be able to solicit individual donors for the pieces and parts necessary to put together a Monte Carlo fundraising event or a fun run. However, when it comes to fundraising galas, corporate dinner events, and even auctions, you may be spending a pretty penny upfront in order to secure the necessary accommodations for your fundraising event.

As a general rule of thumb, the budget for your fundraiser shouldn’t exceed 40% of your target for donations. This means that for every $100 you raise, you shouldn’t spend more than $40. Obviously, you want your expenditures to be as low as possible, but understand that especially with a high-dollar fundraising event, you’ll need to commit to spending enough that you can attract donors who can contribute a lot of money.

Assembling Your Fundraising Committee or Leadership

For small fundraisers, you’ll often be coordinating the fundraising event yourself. However, don’t be afraid to appoint a fundraising leader in your organization if there’s someone on-hand with a better affinity for event planning and cost-cutting. While you may be coordinating the financial side of your fundraiser, understand that all individuals have their own strengths and weaknesses, and when trying to raise money, it’s important to maximize those strengths and minimize those weaknesses.

That principle is particularly important when you have to assemble a committee to manage your fundraising event. For example, hosting a gala will often require someone to be in charge of promoting the event, different individuals who can coordinate the activities that will take place, someone to coordinate and train volunteers, and someone to manage the money. Selecting the best individuals in your organization for each “department” in your fundraising event will help you maximize your efficiency to avoid wasting your precious time and budget as much as possible.

Prospecting for New Donors/Contributors

After you’ve determined the right type of fundraiser for your mission and assembled your team, your next step is to figure out where you’ll get your donors. In some cases, this can be rather obvious. If you’re arranging a bake sale to raise money for your kid’s soccer team, then your prospects are other parents and members of your local community. Who doesn’t want to support the kids?

If your long term goals are a little bit bigger, you need to conduct some research to determine who is most likely to contribute to a nonprofit fundraising campaign like yours and how to reach them. If you’re soliciting corporate donations for an environmental or humanitarian cause, you might find tons of prospective donors in the ranks of employees of your target companies. On the other hand, if you’re raising money for economic research efforts, you’re less likely to spark enthusiasm in individual donors as opposed to larger business entities who, themselves, are more likely to be interested in your cause.

Understanding What Makes People Donate

In order to design a nonprofit fundraising campaign that’s effective and sustainable, you have to know why people would want to give to your organization at all. Yes, people want to give because they feel compelled to be charitable and contribute to causes they believe in. But you’re just one out of the thousands of voices in the crowd. Why should they give their hard-earned money to your cause, and why should they give it to your cause through your nonprofit?

Crafting Your Brand and Message

First off, for someone to donate to your nonprofit, they have to know who you are! Branding your organization and spreading its name as far and wide as possible goes a long way towards raising awareness, helping the public to understand your message and your mission. Your fundraising events themselves help with this, of course, but so does ongoing engagement through direct marketing efforts and social media engagement.

Once donors know who you are, they need to be able to find you and learn about you. It’s critical that your organization maintains a user-friendly website that educates visitors about your cause and your values in a way that’s easy to digest and understand. Plus, soliciting online donation with an easy-to-use donation page is a great way to boost your ongoing funding efforts. Social media engagement is another way to capture online donation dollars from your prospects while also educating them about your mission.

Finally, you need to give your prospects a clear reason to donate. It’s great that your organization is charitable, it’s wonderful that you want to help sick kids, or animals, or disadvantaged peoples, but what are you doing to help? Where is that money going? Your online fundraising page and online donation site should make it absolutely clear what your efforts are, what projects are contributing to those efforts, and how your prospect’s dollars will help.

Continuing Outreach

Your primary fundraising event helps you reach your project’s specific targets, but it also serves as a catalyst for future fundraising needs making it easier to continue bringing in donations and establish ongoing revenues for your organization. As a part of registering participants for your fundraising event, you can collect valuable information from prospective donors to help you keep in touch and help you build ongoing awareness for your cause, enhancing your chances of soliciting further donations in the long term.

Personalized Emails and Direct Mail

Email continues to be a fantastic way to attract new donors, especially if they’ve willingly given up their email address as a part of an enjoyable and memorable fundraising event. Direct mail is an even more opportune way to reach these prospective donors since you can deliver solicitation materials they can hold in their hands right to their front door.

While emails and mailers are easy for prospective donors to ignore or write off, they work for you even when the dollars aren’t rolling in by continuing to promote your cause and raise awareness, reminding these prospects that they once cared greatly enough about your mission and your cause that they forked over their hard-earned money. Especially around the holidays, this reminder can serve as a powerful invitation to contribute again.

Personal Calls

A personal call to prospective donors doesn’t have to be bothersome like a spammy telemarketing call. Quite the contrary– a personal call to a donor who genuinely cares for your cause can be one of the most effective ways to solicit donations.

Donors know when they’re giving out their personal information, and they only give you their money when they trust and value your mission. As a result, showing them some personal care and attention can remind them that you, too, care about a cause that’s now near and dear to their hearts.

Social Media Engagement

Social media is a fantastic way to continue engaging your donors that can have very little ongoing cost to your organization. A simple “like & subscribe” to your Facebook page or YouTube channel helps to position your organization in front of repeat donors time and time again in a way that doesn’t cost them anything and can offer them significant value.

Not only can you use these channels to inform and entertain your viewers about your cause, but you can invite them to participate in upcoming fundraisers and even solicit donations right there and then while they’re engaged with your content. If your particular cause happens to catch some attention in the broader media, as is often the case with environmental and humanitarian issues, turn to social media channels to capitalize on the hype and capture new donors while they’re thinking about efforts just like yours.

Sharing Success

Your donors need to feel like their dollars are being put to good use, and nothing reassures donors that their contributions are being used to affect positive change like sharing your successes with them. This is something you can do by taking advantage of any of the above strategies, be it direct mail messaging, personal phone conversations, or social media engagement and peer-to-peer fundraising.

It’s very easy to get caught up in promoting your organization and its mission, but don’t forget to remind your donors why they donated in the first place. Show them where their money is going and the good it’s doing for their communities and the world around them. Success stories are a powerful way to demonstrate that your organization is more than just another voice in the crowd asking for a handout, but that it’s actually dedicated to affecting positive change in the world. After all, that’s one of the key motivators driving your donors to hand you their money in the first place.

Aplos As A Fundraising Tool

If you got this far down the article, congrats! We hope you gained some great insight into the world of nonprofit fundraising, and gathered some great ideas along the way. Also, if you’re interested in better managing your donors, and solving problems like lapsed or fatigued donors, then check out our donor management and fundraising software.