3 Fundraising Strategies Every Small Nonprofit Should Avoid

When you’re the Lone Ranger in your nonprofit trying to raise money using a hundred fundraising strategies, it’s tough.

You have too many things to do and some days, you just don’t know where to start. It’s easy to get overwhelmed and fall into the Trap of Trying.

You try this. Then you try that.

There’s really no strategy behind what you’re doing. You’re just trying to bring in some money however you can.

How do I know? I’ve been there.

I remember my early days of fundraising when I didn’t know what I was doing. I would try just about anything to bring in some money, all with the hope that it would pan out well. I did events aplenty – golf tournaments, 5Ks, Poker Runs, Galas, you name it. I wrote grants. I spoke to all sorts of groups. I tried just about everything I could think of. And that was before people were raising money online (yeah, I’ve been doing this a long time!).

Some things worked out better than others, and I learned that events were a whole lot of work without a lot of return on investment.

Now, I’m not totally against events. I think they have their place. I think you should do ONE event and do it really well, then spend your time on other things.

What I’m REALLY against is blindly spending time on fundraising that doesn’t generate enough bang for the buck. In other words, I don’t like activities that don’t generate enough money to make it worth the time you spend on them.

Good fundraising should bring you at least four times what you invest, and maybe as much as 10 times. (Yes, it can be done. I’ve done it and I have clients that do it).

How do you do that? It’s all about strategy, honey.

The most common reason small nonprofits struggle isn’t lack of passion or commitment. It’s lack of strategy.

I see it constantly: organizations working incredibly hard, doing events and sending emails and applying for grants, and still ending the year short of their goal. They’re busy, but they’re not building anything. They’re reacting instead of planning.

Strategic fundraising means choosing activities because they move you toward your goals — not because someone else is doing them, or because they seem like a good idea, or because it’s what you’ve always done.

Here are three fundraising strategies that look reasonable on the surface but consistently underperform, and what to do instead.

Relying on one primary revenue stream to fund your operation is one of the riskiest things a nonprofit can do, and more organizations do it than you’d think.

Maybe it’s one big grant you’ve had for years. Maybe it’s a single major donor who gives generously every December. Maybe it’s adoption fees or ticket sales or a government contract. Whatever it is, if one source covers the bulk of your budget, you’re one bad year away from a crisis.

I’ve worked with nonprofits — large and small — who came to me in a panic because their major grant was being reduced or eliminated. Some of them had been receiving that same grant for 20 years without ever building another revenue stream. Now they were facing a funding cliff with no plan.

Most funders actively look for diversification when evaluating grant applications. They want to see that your organization has multiple sources of support, because it signals stability. If your budget is almost entirely dependent on one funder or one revenue source, that’s a red flag.

What to do instead: Build a diversified fundraising strategy that includes individual donors, grants, and earned revenue. Aim for no single source to represent more than 30–40% of your annual budget. Even if you’re small and resource-constrained, start cultivating individual donors now — before you need them.

This one looks like a marketing strategy, but it’s not.

Spray and pray is when you try to get your message in front of as many people as possible — Facebook ads, local news spots, community presentations, social media posts — and hope that someone, somewhere, responds. You cast a wide net and wait.

The problem is that most of the people you’re reaching don’t know your organization, don’t have a connection to your mission, and aren’t ready to give. You might pull in a few one-time donations, but you’re not building a donor base. You’re starting from scratch every time.

Smart businesses don’t operate this way. They identify a specific target audience and create focused strategies to reach them. Nonprofit fundraising works the same way.

The most effective small nonprofit fundraising strategies start with clarity about who you’re trying to reach. Who are the people most likely to care deeply about your mission? Where do they live, work, and spend their time? What do they value? That’s your Ideal Donor Profile, and building your fundraising around it will always outperform a broad, unfocused approach.

What to do instead: Before your next campaign, get specific. Write down a clear picture of your ideal donor — age, values, connection to your cause, giving history. Then build your outreach to speak directly to that person. You’ll raise more money with a smaller, more targeted list than with a massive unfocused one.

Bake sales. Car washes. Charity restaurant nights. T-shirt sales. These are the fundraising activities almost every nonprofit has tried, and almost every nonprofit has felt the aftermath of.

I call it the Heart-Sink. The event is over, you’re exhausted, and when you add up what you actually netted after expenses and volunteer hours, the number is… underwhelming. Your heart sinks a little. And the thought of doing it again next year makes it sink further.

These activities aren’t inherently bad. When they’re run by volunteers as a community engagement tool — not as a primary revenue driver — they can have real value. The problem is when small nonprofits rely on them as a main source of income. They’re high-effort, low-return, and they keep you stuck in a reactive, scrambling mode instead of building the kind of sustainable fundraising program your organization needs.

What to do instead: Reserve small events and activities for relationship-building and community engagement, not revenue generation. Shift your primary fundraising energy toward direct appeals, major donor cultivation, and planned giving — strategies that generate significantly higher returns on your investment of time and resources.

So what should your nonprofit be doing?

The right fundraising strategies will look different for every organization — and that’s actually the point. Cookie-cutter approaches don’t work because your nonprofit isn’t cookie-cutter. You have specific strengths, a specific audience, specific resources.

When you’re evaluating fundraising strategies, ask yourself:

• Will this help me reach my revenue goals for the year?
• Does this play to our organization’s strengths?
• Does it play to my strengths as a fundraiser?
• Can we actually pull this off with the staff and volunteers we have?
• What’s the realistic return on the time and money we’ll invest?

When you choose strategies that answer yes to most of those questions, fundraising gets easier. Not easy — but easier. You stop wasting energy on activities that don’t move the needle, and you start building real momentum.

The nonprofits I’ve seen go from barely scraping by to fully funding their budgets didn’t stumble onto some magic new tactic. They got strategic. They stopped chasing every idea and started building a focused plan.

That’s available to you too.

If you’re tired of spinning your wheels and ready to build a fundraising program that actually works, the Inspired Fundraising Retreat is the place to start. In three days, you’ll walk away with a complete 120-day plan, proven strategies tailored to your nonprofit, and the confidence to execute it.

Or if you want to start right now, grab our free Year-End Fundraising Checklist, a simple tool to help you make sure nothing falls through the cracks this season.