5 Fundraising Myths That Are Hurting Your Campaigns

The same tried-and-true sayings you’ve heard about fundraising aren’t necessarily true. The nonprofit world is constantly evolving, and long-held fundraising beliefs can quickly become outdated.

To keep your strategy current and effective, you need to understand the top fundraising myths and why they aren’t true. In this guide, we’ll explore several fundraising myths and how to combat them in your own approach.

Nonprofits often spend significant time and energy on donor acquisition. While you should invest in your organization’s growth, cold outreach isn’t always the most effective way to do so.

Think about it. Would you be more likely to respond to an email from an organization you’ve never heard of before or one from a nonprofit you gave a one-time donation to a few years ago? Chances are, you’d rather engage with an organization you’re familiar with.

Shifting your focus from acquisition to retention can make your fundraising strategy more impactful. When you know you’re reaching people who have already supported your cause in some way, you can be more confident in winning their support again now. Plus, it can cost up to $1.50 to raise $1.00 from new donors, while raising the same amount from existing donors typically only costs $0.20 or less.

To put this finding into practice, pinpoint lapsed donors in your database, and dedicate time to re-engaging them. Whether you text, call, email, or send them direct mail, these once passionate supporters are likely more willing to contribute to your organization than those who have never heard from your nonprofit before.

You may think you only need to conduct wealth screening to identify supporters with the greatest financial capacity and, therefore, the highest likelihood of becoming major donors. However, giving capacity does not always translate to affinity, or the loyalty and passion someone has for your cause.

The best way to find major donors is to combine the two, seeking current supporters with high giving capacity and affinity for your cause. There may even be some high-affinity supporters whom you haven’t identified as high capacity but whose passion for your cause may eventually lead them to contribute large donations.

Use your nonprofit CRM to track engagement markers associated with high-affinity donors, such as:

• Consistent giving, even if it’s in small amounts
• Donors who give and volunteer
• Cause advocates who constantly post about or petition for your cause

Treat these supporters like you would treat major donors. By showing them your appreciation and attention over time, you may just cultivate them into high-impact financial contributors.

Nonprofit finance teams and leaders often stress about keeping their overhead under a certain arbitrary percentage. The infamous “overhead myth” tells charitable organizations that they must limit overhead as much as possible, maintaining a percentage of anywhere from 15 to 35%.

While it’s true that most of a nonprofit’s funding should go directly toward its mission, only a small percentage of donors truly care about an organization’s exact overhead ratio. In fact, most donors give because they want to see a specific outcome—no matter how much your nonprofit allocates to each line item of its budget.

According to Bloomerang’s Mission Retainable Report, 63% of donors give because they feel connected to the organization’s mission. Additionally, nonprofits need to invest in overhead expenses, such as technology and staff compensation, to properly execute their missions and maximize their impact.

Instead of limiting overhead as much as possible and discussing exactly how much of donors’ contributions go to programming, switch the conversation to focus on impact. For example, consider these two potential lines for a section about an animal shelter’s adoption program in its annual report:

• Option 1: “Donors who contributed to All Paws On Deck this year had 85% of their donations go directly toward the program.”
• Option 2: “Thanks to our community members’ generous donations, we were able to help 783 cats and dogs find loving homes this year.

While the first statement focuses on the organization’s overhead ratio, the second highlights the actual beneficiaries the shelter helped. Donors are much more interested in how their contributions actually make a difference, rather than the exact numbers in your financial documents.

Some nonprofit professionals believe everything should be digital and that printing and mailing physical materials is a waste of money. While social media, SMS, and email are powerful tools, direct mail actually helps your organization stand out in a predominantly digital world. In fact, even though direct mail is more expensive than other channels, it has the highest return on investment (ROI) among individual media (161%), proving that it’s worth the investment.

For best results, nonprofits should integrate direct mail into their existing strategies. According to USPS, when marketers combine direct mail with digital channels:

• They see conversion rates around 40%.
• 68% of respondents receive more website visits.
• 60% of respondents achieve a higher ROI.

By mixing direct mail with digital marketing, you reinforce your messaging, making it more likely that supporters will engage and contribute to your cause. For example, you may send a direct mail appeal that features a QR code so donors can easily scan it and give right from their mobile devices.

While many organizations focus on maintaining relationships with major donors, they’re not the only ones who can have a large impact on your cause. Donor retention trends show that donors who give the smallest gifts are actually the most difficult to retain because they may have weaker connections to your organization and need you to convince them to stay involved.

Although it may not seem worth cultivating relationships with donors who contribute small gifts, every gift counts—especially in an age when government funding is uncertain. Additionally, a donor who gives consistent small gifts over time can have just as large an impact and as high a donor lifetime value as a major contributor who gives a significant amount a few times throughout their relationship with your organization.

To build relationships with donors who contribute small gifts while still saving your team time, implement the following best practices:

• Automate your communications. For example, when a first-time donor gives a contribution under $100, have your donor management system trigger a welcome email series that dives deeper into your organization’s history and invites them to engage in nonmonetary activities like volunteering and events.
• Encourage continued small gifts through your donation page. Bloomerang’s donation page guide recommends highlighting the recurring giving option on your page and describing your monthly giving program. When current and potential supporters know how to easily opt into recurring giving, understand the sustained impact this predictable revenue can have, and know they’ll be part of a giving society of like-minded individuals, they’ll be more likely to convert.

To keep small recurring donors around, make your program more than just a regular contributions program. Offer enticing benefits like free merchandise and exclusive publications, and provide personalized impact reports that show how each individual has made a difference over time.

The sooner you debunk these myths for your team, the sooner you’ll see fundraising success. By prioritizing genuine donor relationships and emphasizing the impact supporters have on your mission, you’ll build a strong community and maximize the funds you raise for your cause.

As Chief Marketing Officer at Bloomerang, Ann Fellman champions the company’s mission to empower For-Purpose organizations through innovative fundraising technology. With over 25 years in technology marketing, including spearheading memberships at the Minnesota High Tech Association and being recognized as one of the “Top Women Leaders in SaaS of 2018,” Ann’s expertise lies in connecting nonprofits with the essential fundraising software they need to grow a robust nonprofit culture and achieve next-level impact. Her strategic thought leadership ensures Bloomerang’s Giving Platform remains at the forefront, helping nonprofits raise more, build culture, and retain supporters for sustained growth.