In the previous post on revenue sources, we discussed unrestricted vs. restricted funds, government vs. foundation & corporate Grants, fundraising vs. community events, and in-kind donations. In this post, I will discuss sources of revenue related to individuals.
Industry-wide, individual giving accounts for an average of 70% of total revenue for nonprofit organizations. Planning giving/bequests account for an additional percentage. Bequests typically come from donors that have been engaged with your organization and its programs for an extended time. So cultivating individual donors is a critical stage of development for any organization, and as grant writers, we often have the opportunity to encourage our organizations to consider expanding their stewardship strategy beyond that of corporate, foundation, and government supporters.
There are many different viewpoints on how to cultivate the ideal number and mix of board members. Some philanthropic leaders insist that all board members should have strong ties to the community that they could leverage into fundraising relationships and that all board members should contribute a minimum cash donation to the organization to support its efforts. My viewpoint is that all potential board members, regardless of their age, income status, or number of connections, bring something to the table. Some may be better at connecting with the community. Others will be better at getting the hard work of organizational management done. All will contribute professional expertise. Some will contribute cash donations. Most likely all board members contribute financially to the organization, either directly, through contributions of in-kind professional services, or through their participation in fundraising events. All contributions count.
Some grant proposals will ask what level of participation your board has. 100% would mean that all board members contribute financially to the organization at least once during the fiscal year. The proposal may also ask for the dollar amount contributed by the board. It’s good to set at least a board giving goal in your budget for the year. Then each board member can contribute what they are able.
For me, there is no line between marketing and fundraising. It is critical that these fields of expertise overlap in any organization to ensure that messaging is consistent and communication with donors is streamlined. After all, if you’re donor communications are not fluid and complementary, your organization could appear inefficient, and you could lose the donor because he doesn’t feel like you know him anymore.
Personalize your Communications
Whenever possible, donor communications should be personalized. And donor records should be confirmed and maintained consistently to ensure that you have the correct donor name (i.e., Mrs. Smith, Mr. Smith, Mr. & Mrs. Smith, or The Smith Family), the name is spelled correctly, the address is correct, the donor’s connections to your organization are recorded appropriately (i.e., Mrs. Smith helped with a particular campaign in the past, not Mr. Smith), the donor’s communication preferences are recorded (i.e., send an appeal once a year vs. 6 times per year, include me on your newsletter list, calls are ok, emails are ok, would love to be invited to events or to volunteer), and the donor’s giving history is taken into consideration.
You want to know the most time and cost efficient way to personally connect with your donors. Don’t bombard them with information on your own terms. Know what they want and give it to them.
Think about it. How often do you send a donation to someone who addresses their letter, “Dear Friend”. It’s worth the time and money to really get to know your donors (at every giving level). You never know what will make them think of you when they’ve had a windfall and want to do something good.
Treat Donors Like Family
There are, of course, many ways to reach current and potential donors directly. Newsletters, annual reports, postcards, event invitations and save the date cards, email, solicitations to buy something or donate online, etc. You can also make your web site a real destination to engage your supporters. Not every touch point needs to be a funding solicitation. You don’t want your donors thinking that you see them as a bank.
Think about it. Say you’ve just graduated college and you need money to launch your new life. If you touch base with family just to ask for money, how long do you think they’ll give it to you? Now if you are a truly engaged member of that family, participating in holiday gatherings and other family events, would they be more likely or less likely to help you out when you need them? Building relationships goes beyond raising money. Your donors should be considered a part of your organization’s family.
Start a Conversation
What you should include in every type of donor communication is a call to action. After all, each touch point should be an opportunity to have a conversation. Whether it’s sharing their story with a friend and engaging them as a volunteer or a donor, attending an event, contacting their senator, or contributing something to an upcoming event like an auction. If it’s possible to customize the call to action based on your relationship and history with a donor, do. The more you show them you know them, the more likely they are to follow through on the call to action. And the conversation can begin.
Next week: program fees, member fees, and earned income.