We hear from folks all the time who are looking for new fundraising ideas for nonprofits.
Especially fundraising ideas for a new nonprofit.
They’re excited to get their fledgling organization off the ground, and they need the funds to do it.
They’ve tried what they know to raise money, but it just isn’t working.
Or it kind of works but not at the level they need it to.
In other words, it’s generating only nickels and dimes instead of the hundreds and thousands needed to pay for programs and ongoing operations.
I get it. I’ve been there.
It’s not easy to figure out what works in fundraising when it’s not something you have much experience with.
And it’s frustrating. Especially when you work really hard on an event or an online campaign and you don’t get the results you were hoping for.
Sometimes when people are looking for new fundraising ideas for nonprofits, they’re looking for a quick solution to solve their funding problems.
“Where’s that magic pill that will fix everything?”
It’s like a money grab because that’s what it’s all about — the money.
Any of this sound familiar?
If lack of funds is an ongoing and major problem for your nonprofit, it’s possible that you’re trying to fix a broken leg with a band-aid.
If you’re struggling to make ends meet, you’re probably using a broken funding model — meaning your organization cannot survive into the future on the funding you are receiving now.
The way you’re trying to raise money doesn’t work, no matter how hard you try.
But we want something much better for you!
We want you to learn to master the art and science of fundraising so you can raise the money you need, whenever you need it.
Let’s look at some fundraising ideas for nonprofits that just don’t work so you can skip these and the frustration that goes along with them.
Broken Funding Models for Nonprofits
Truly, it’s not your fault.
You started your nonprofit to make a difference, not to raise money. But you can’t do much good in the world without proper funding.
So, you found yourself sidelined while you tried to figure out fundraising. And you tried things you’ve done before or seen others do.
Which makes sense.
Sometimes those things work, but most of the time they fail to generate the kind of revenue you need.
There are some common pitfalls and rookie mistakes that many nonprofit leaders experience when trying to raise money — like these 5 funding models that we consider broken because they aren’t sustainable long-term, won’t secure your future, and won’t fully fund your budget. (Avoid them!)
Broken Model #1: Self Pay
You had the passion and the idea to start a nonprofit, and you’re fortunate to have a comfortable financial situation personally.
So you figured you’d just write the checks yourself to keep the organization running.
You envisioned that you could just skip over all the yucky fundraising stuff AND the begging.
While you might be able to pay for the startup of your nonprofit (and maybe part of the way down the road), you can’t pay for everything yourself forever unless you’re independently wealthy.
Even then, paying for everything yourself is not good business for your nonprofit.
There are lots of reasons why this approach is not good in the big picture.
- Lack of accountability. Paying for everything yourself removes some of the accountability that nonprofits need and grays the boundaries of public input and influence. If you are the only donor and you determine what the organization needs, it starts to become a Board of One, and that isn’t how nonprofits should run.
- Things change. We have all learned the hard way that things can change in an instant. If something should happen and you no longer have the financial ability to back your nonprofit, you run the risk of losing it due to lack of community support. In other words, if you can no longer pay for everything yourself and you haven’t built a donor base, where will the money come from to support the nonprofit going forward?
- Limited support. You should be sharing your nonprofit’s mission online and offline through your social media plan, donor newsletters, events, and other communications. Sharing your stories makes people want to get involved and help. Their donations create an emotional investment for them in the work you’re doing. Don’t deny people the opportunity to invest in your mission! You could lose valuable support and miss out on some wonderful opportunities or partners!
- Unsecure future. You won’t live forever. Being the sole support for your nonprofit is one way to ensure that the organization will die with you — unless you leave funds in a planned gift for the future of the nonprofit. But without the support of others, who will guide the nonprofit after you’re gone?
Now, of course, we all dip into our wallets here and there for things.
That’s not a problem.
It only becomes a problem if you decide it’s easier to just pay for something yourself rather than fundraise for support.
Broken Model #2: Sole Source Funding
It’s tough to sit on a one-legged stool.
Eventually, it WILL fall over.
And trying to sit on a one-legged stool is exhausting, both mentally and physically.
Fundraising can be a lot like that when you’re relying on one source of income to fund your nonprofit.
Look, in order to successfully fund your nonprofit both now and into the future, your funding should come from multiple sources.
It’s called “diversified revenue streams.”
In short, you should never depend on ONE donor, ONE grant, or ONE source of income (selling an item, for example) to fund your entire organization.
If that one source goes away, you may find yourself in a very difficult situation.
At best, you’ll be scrambling to put together new funding.
At worst, you’ll be scaling back, cutting programs, or maybe even closing the doors — leaving people without the services your nonprofit offers.
We’ve had a couple clients over the years who both received a large grant from the State of Tennessee.
Some budget cuts at the state level trickled down into reduced funding in one case and the complete loss of the grant in another. That nonprofit found itself struggling to make up a $750,000 loss, and it was almost too late!
That’s when they called us. Yes, we were able to help them, but not fast enough to make up that kind of money in a few short weeks, especially since they had NO donor base to speak of.
It’s easy to get too comfy when you have a big stream of money coming in.
But here’s the truth: nonprofits that have a fully funded budget and are set up for long-term success have diversified revenue.
They have a fundraising plan composed of funding from many sources!
If you’re applying for grants (or planning to apply soon), funders want to see that your nonprofit is stable and well managed. They may not want to give if they see your animal welfare nonprofit is living off of your adoption fees or your homeless shelter is solely running on a large government grant.
Don’t put all of your eggs in one basket when it comes to running your nonprofit.
Any one event or grant or other source could disappear in a moment.
Broken Model #3: Fundraising Events
Fundraising events can be a good way to raise money, raise awareness, make new friends, and deepen relationships.
A signature event, online giving days, and other kinds of events can be successful when well planned and executed.
However, many young and small nonprofits do too many little events, and it’s exhausting for both you, your supporters, and the community.
And lots of events or “fundraisers” usually only bring in nickels and dimes.
Has this happened to you? The local restaurant wants to host a chicken wing night and donate 20% of all sales to your nonprofit! How fun and easy, right?
You’ll be asked to promote the event, add your name to it (i.e. endorse it), and get people to buy whatever special thing they’re offering.
If they’ve made it REALLY difficult and are requiring a flier or password, you can immediately expect almost nothing from it.
So really, all you’ve done is help promote a local business, spent your valuable social media space and time driving traffic to the event, and maybe you’ll end up with a couple hundred dollars.
I get that if your nonprofit is new, a couple hundred dollars can be a big deal.
But if you’ve ever done one of these restaurant nights, you know what I’m talking about here — it’s a lot of work for very little in return.
The reality is that these events help the hosting businesses MUCH more than they help you.
It’s helping them build a reputation as a generous company that supports nonprofits and their investment is almost nil.
Other “fundraisers” and small events are equally draining and unproductive.
Just say “no” to anything that doesn’t appear to be worth your time and that you can’t see how it will generate at least $1,000 for your nonprofit.
That means you should NOT say “yes” to every opportunity that comes across your desk.
When someone on your Board or a volunteer has a “great idea” for a new fundraiser, do your due diligence and estimate both the potential revenue and the potential investment.
How much do you think you can raise, realistically? How much time and energy will it take to pull it off?
Remember, there’s an opportunity cost associated with everything you do.
While you’re busy promoting that restaurant night, you cannot do something else…like growing your monthly giving program, running a successful Facebook campaign, or meeting new major donors.
You only have 24 hours in the day, and you can only do one thing at a time (unless you’ve figured out how to clone yourself!).
So, choose wisely when it comes to fundraisers and events.
What should you do if a local business approaches you to do a fundraiser? Repeat after me: “Thank you so much for wanting to support us! We’d happily accept your generous opportunity. However, at this time we are unable to promote or share the event on social media.”
This way, they can choose to still do the fundraiser and send you a check – or more likely, they will decline and not contact you again.
One final note on why these events don’t work long term. Transactional donations (where someone gets something in return for their “donation”) will not necessarily garner you any future support. Often, these folks are more interested in the candle, calendar, candy bar, etc., that they got from you rather than supporting your good work.
Broken Model #4: Grants
Many nonprofit leaders mistakenly think that they can open their doors and immediately apply for (and get!) grants to fund their new nonprofit’s operations.
Grants definitely have their place in a healthy fundraising plan. You should certainly do the research to find out what grant opportunities are a good fit for you and do the work to get ready to go after grants.
But grants are tough to find for nonprofits less than 5 years old.
And grants are usually available only for specific projects or needs.
That means your chances of finding grants to fund your ongoing operations year after year are pretty small.
Grants are NEVER guaranteed, and they’re not always renewable.
Even if you have received the same grant for years, there may come a time when the foundation changes their areas of focus and that grant you depend on is no longer available.
Again, do your homework and put a grant deadline calendar together of the best opportunities for you, but consider grant money to be bonuses that you weren’t counting on and didn’t budget for.
Broken Model #5: Crowdfunding
“If you build it, they will come” is definitely not applicable to fundraising!
Many people think that posting an online crowdfunding campaign will result in masses of new donors and new donations.
Nope. It doesn’t work that way.
Crowdfunding is great for something compelling like an urgent need or a large project when you have a large following.
The problem is that funding doesn’t roll in just because you posted on GoFundMe.
You see, no one wakes up in the morning and says “I feel like giving some money away. I wonder if there’s a good cause online I can support?”
A good crowdfunding campaign requires strong, clear messaging and quite a bit of effort, INCLUDING promotion of the campaign.
In other words, it’s up to you to tell people about the campaign, ask them to give, and give them the link to the campaign.
See how that works?
And at the end of the day, crowdfunding is a good tool for your fundraising toolbox, not a reliable method for raising all the money your nonprofit needs for starting up or for ongoing operations.
There’s no harm in creating crowdfunding fundraisers at the right time and for the right reason and with the right messaging.
But tossing up a fundraiser to recoup your expenses for a completed project or to pay to keep your lights on will probably disappoint you.
The Bottom Line
A solid and successful fundraising plan should include multiple sources of funding and a nice mix of business support, private donors, a signature event, and both online and offline efforts.
You never know when a rainy day will hit and one of your income sources will disappear.
Make sure you have plans in place — and alternate ways to raise money — so that these speed bumps along the way won’t cost you your nonprofit!
Be ready by having diversified funding, including a big, loyal donor base of people who will give because they love the work your nonprofit does.
That way, you won’t constantly be on the lookout for new fundraising ideas for nonprofits!