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How to raise funds for a new nonprofit

You’ve finally taken your passion for helping to the next level!

You’ve established a new nonprofit, you have your 501c3, and you’re ready to start changing the world!

But first you have to figure out how to raise funds to pay for services and programs and everything you need.

Where do you start? It can be confusing.

There’s a TON of information on the internet, but some of it is conflicting.

You’ve probably already tried what you know – bake sales, Facebook fundraisers, maybe even a GoFundMe… and while those may have brought in a little money, it’s not nearly what you need.

So, what does it take to raise mega bucks like the big nonprofits do?

Learn to think like a Fundraiser

You started your nonprofit so you could make a difference, not to raise money.

In fact, the thoughts you have about money are either about how much you need to cover expenses or how hard it is to raise money.

Or maybe you thought that this would be easy – as soon as people hear you have a nonprofit that they would automatically give. You found out pretty fast that it doesn’t work that way and that fundraising is harder than it looks.

how to raise fundsIt’s time you learn how to think like a professional fundraiser.

That means you need to think about the people who give money as partners in your work, not just a checkbook or ATM. You see, they CARE about the work your nonprofit does and want you to succeed. Really, many of them would LOVE to do the hands-on work your nonprofit does, but they don’t have time or don’t know where to start, so the easiest way for them to get involved is to donate money.

When I started out in fundraising, (my first job was at the local Rescue Mission) I was much like you – no real experience with fundraising. Yeah, I had sold candles and candy bars in grade school, but that was about it. What I DID have was some experience in marketing and a whole lot of passion to help people.

So, I jumped in with both feet and did what made sense to me. I got organized. I tuned in to why people cared about the organization. Then I made a few improvements to the current fundraising activities, and revenue started pouring in. I raised so much money so fast that my Board chair called me one day and said, “what the heck are you doing to bring in so much money?”

Of course, I had a STEEP learning curve. I found out that raising big money once was one thing. Doing it again and again was another thing.

It took me a while to understand that my donors were my most precious asset. It’s like the goose and golden egg story – if you take care of your geese (donors), the golden eggs (donations) keep coming.

So, I paid attention to their experience as a donor and stayed in communication with them and I believe that was key to my success.

I can’t stand watching people struggle with fundraising because it just isn’t necessary. That’s why I spend my days writing blog posts, shooting videos, teaching classes, and coaching people one-on-one. I want you to get the benefit of my experience without any of the false starts or dead ends so you can learn how to bring in the big bucks much faster!

How to Raise Funds for a New Nonprofit

You can run into a lot of brick walls when you’re starting out in fundraising because there are some fundraising models that don’t work at all, and some that don’t work for new nonprofits.

There’s a lot of common wisdom and advice floating around that isn’t really practical and doesn’t work well.

Here are some common funding models you’ll want to steer away from:

  • Thinking you can fund your nonprofit using only grants – Grants can be a good source of revenue, but not for new nonprofits. Most foundations want you to have three years of experience under your belt so you can prove your program is working before they invest in it. Even when you have the 3 years of program data, trying to fund your entire organization from grants is not a good idea. Most foundations don’t want to fund your program year after year, and even though there are thousands of foundations out there giving away money, there are only so many that are the right match for YOU. That means there’s only a small pool of foundation grants you are a match for and you’ll need other streams of income to cover the costs that grants don’t cover.

 

  • how to raise fundsThinking you can fund your nonprofit with events and fundraisers – Statistically, fundraising events provide the lowest return on investment of any kind of fundraising. It takes extreme amounts of time and energy to organize and host an event and that’s time your team might be able to put to better use somewhere else. And then, to add insult to injury, small events don’t usually bring in very much money. While a well-timed, well-managed signature fundraising event has its place and can generate a lot of publicity and some much-needed funds, events are not going to fully fund your new nonprofit. If you do lots of small fundraising events, it will suck valuable time, money and energy from the things you should be doing.

 

  • Thinking you can fully fund your nonprofit with corporate donations – Corporation donations are not as easy to get as you think and are often given in support of a fundraising event. Remember that corporations and businesses typically do not give because they’re philanthropic (although some are). They give because of what they get in return – exposure to their target audience, publicity, good will, etc. The best way to get a corporate donation is through a connection you have inside the company. When you know someone on the inside, they can champion your request and walk it through the internal steps for approval. Even if you know someone and think you have an “in,” there are often strict rules and enrollment periods that can make getting the donation difficult. And the donations aren’t automatically repeated every year. Just because you get a corporate gift this year doesn’t mean you’ll get another one next year.

 

  • Thinking you can rely on appeals to rich people – Just because people have money doesn’t mean they’re going to give it to you. Not everyone gives to charity. And people who DO give have their favorite causes. It’s a bad idea to target people because of their household income. Instead, target them based on their values and interests. Remember, they’ll only give to your nonprofit if they care about the work you’re doing so it’s better to target people because their hearts are sensitive to your cause, not because of their net worth.

 

  • Thinking you can rely on crowdfunding – Online fundraising doesn’t work very well unless you already have a following. Crowdfunding is not a “build it and they will come” model. No one wakes up in the morning and says, “I feel like giving some money away. What crowdfunding site can I surf?” If you decide to try crowdfunding, you still have to publicize it and ask people to go there to give. On top of that, some people don’t trust crowdfunding websites, refusing to give to a cause they don’t know through a site they aren’t comfortable with — especially when the nonprofit is new or doesn’t have a proven track record.

 

  • Thinking you will self-pay until people discover your nonprofit – Unless you’re independently wealthy, paying for all the nonprofit’s expenses yourself is a bad idea. We’ve had clients who started out that way mostly because they didn’t want to ask anyone for money, and it seriously limited the organization’s growth. Plus, self-funding reinforces the feeling that you’re the only one who cares about those your nonprofit is trying to serve which is not a feeling you need while you’re trying to grow.

 

  • Thinking one source or an “angel” donor will work forever – You need dependable funding, not “dependent” funding. Relying on one donor or one source of funding is like sitting on a one-legged stool – it WILL fall over, it’s just a matter of time. You need multiple revenue streams to create stability for your nonprofit. Like the old saying goes, “Don’t put all your eggs in one basket.”

How to raise funds by finding the right donors

So, if there are a lot of funding methods that are off the table how DO you raise funds for a new nonprofit?

how to raise fundsYou build a big, loyal donor base of people who love the work your nonprofit does. Keep their interest and attention through consistent communications. Then ask for their support. If you do the first two parts right, they’ll be happy to give.

Sounds good, right? Now, how exactly do you find potential donors?

First, start with people you know. Ask family and friends to give. Even if they can’t give much, every dollar helps and their support will mean the world to you.

Next, ask your Board and volunteers to give. They’re already giving their time, so it’s only logical to ask them to give money, too. Some of your volunteers might consider their time as their donation and that’s fine. But you should get 100% giving from your Board members. After all, they’re leaders of your organization and they should demonstrate that leadership with a personal financial contribution.

Finally, look for others out there who share your excitement about your cause. Start by creating an Ideal Donor Profile. Get clear about the person who is most likely to give to your nonprofit and describe them in as much detail as you can.

Here are some things to think about:

  • Gender – Who is most likely to give to your organization? Men or Women?
  • Age – How old is your typical donor? Is there a reason why older or younger people would be attracted to your cause?
  • Educational level or area of expertise – Law school graduates might be likely to donate time or money to a cause like Legal Aid. Teachers might be more likely to give to educational causes.
  • Other activities – Are your ideal donors likely to be involved in specific activities? Do they attend church?  Are they involved with their kid’s school?  Are they interested in sports?
  • Volunteers – Do your donors also volunteer? Where?

 
The more you know about your Ideal Donors, the easier it is to find them in the community.

When I worked at the food bank, that’s exactly what I asked myself – “where can I find people who will give easily and in large numbers?”  Here’s what I figured out about my Ideal Donors:

They were:

  • Women
  • Middle aged or older
  • College-educated/professional
  • Active at church
  • Volunteers in the community

 
I looked at that list and thought “where can I find more people just like that?”

The answer popped out at me immediately: women’s groups at churches.

I lined up some speaking gigs, put together a hot presentation with a clear call to action, and off I went. I remember at one church, almost everyone in the room signed up to hear more about our work and how they could get involved (in other words, they signed up for our newsletter!).  Several ladies handed me a check or cash before I left, and a few days later, I got a check from the group’s treasurer. Plus, I got requests to speak to other groups. It was a total WIN!

I used this technique many, many times and it helped me raise awareness and add dozens of new supporters to our list every time I went out to speak.

How to Ask for Money

Now that you have figured out who your Ideal Donors are you have to ask them to donate.

How you present your request is very important. You know that your nonprofit will change the world for the better – now it’s time to convince your donors of that fact.

When you ask for money, don’t say “We’re a 501(c)3 nonprofit and we have x programs serving the underprivileged, at-risk population blah, blah, blah. Please give so we can reach our goal of $10,000”

Boring. No one will give.

Instead, choose your words carefully, so people know exactly how they can help you make a difference.

  • how to raise fundsIt should be interesting – No one wants to sit through or read through something boring. Even when we want to pay attention, our minds drift when we’re presented with something colorless or dull. Use descriptive language to help the donor feel like they’re IN the story.

 

  • It should tell a story – Facts tell, stories compel. Statistics may tell the big picture about a problem, but it’s the emotional impact that has people reaching for their wallets. Tell the story of a domestic abuse survivor who managed to start a new life with her child. Make the story vivid, using words that paint the picture so the donor can easily imagine it.

 

  • It should describe the impact – People want to fund your impact not your existence. People don’t care how many staff members you have or that you would like to have a new building. They want to know who you’re helping and how. So, be specific about where their money will go. How many homeless people will eat a meal for their ten-dollar donation? Let them know along with how that hot meal will change that person’s life. When you can connect the donor’s gift to the difference it makes, people get excited and want to give.

 

  • It should turn the donor into a hero – You want to know the real secret of how to raise funds? Make the donor the hero of the story, not your nonprofit. People like to know that something they are doing matters and that they are making an impact. They like knowing they made a difference and changed someone’s life. The more your message places the donor smack-dab in the center of the story, the more likely they will give.

 

  • It should always include a call to action – At the end of your Ask, you should let them know how much you need them to give, where the money will go and exactly how they can donate. They should have an immediate method of donation, whether they are given a link after reading your call to action online, a pledge card at the end of a personal Ask, or a reply card in a direct mail appeal. However you’re asking, always offer a method for giving along with instructions about what to do next.

How to keep raising funds

Once you start raising funds from donors, don’t take them for granted.

Work at building relationships and giving them a good giving experience to keep them coming back to help you again and again. When you focus more on the donor and less on their money, you’ll find that you have a core group of supporters that have your back every time you need them.

Make sure you keep donors feeling great by thinking about things from their perspective:

  • Planning is key – Carefully plan the programs and services your nonprofit will provide and determine the cost so when you ask for support, you can share exactly how their money will help. Of course, there will occasionally be emergencies or urgent needs, but you don’t want to be constantly running to donors with your hair on fire! They will feel their money is in capable hands if you seem to be trustworthy and have your ducks in a row.

  • Communicate Regularly – Plan on sending an email newsletter once a month, update your social media daily, and keep your supporters in-the-know about how their money has been used. Be deliberate and consistent in your communications to build trust with your donors because trust builds relationships and relationships are the foundation of good fundraising.

  • how to raise fundsFinish your stories – Donors love updates, so let them know what happened after they gave. Tell them the outcomes after your shelter rescued puppies from an animal hoarder, especially if you asked them for an urgent donation to make that rescue possible.
  • Add Personal Touches – A thank-you letter is not the end of the process but the beginning. Take a few more steps to thank a donor so they get the full impact of feeling appreciated. Call donors to thank them personally for their gift, especially if it’s over $100. Take a donor to lunch to thank them and ask their opinion about your nonprofit’s work. Take time to answer their questions on social media or email. It all adds up to make the donor feel connected and appreciated, which significantly increases the chances they will give again.

  • Treat Donors like Partners, not ATMs – Imagine that you have an emotional bank account with each donor. Each time you ask for money (or anything else), you’re withdrawing from the account. When you help your donor feel good about their decision to support your nonprofit, when you tell them a story that moves them, when you send a thank-you, or share an emotionally charged video, you’re making a deposit into the account. Make more deposits than withdrawals or the account will close.

The Bottom Line

You started your nonprofit so you could make a difference. The faster you learn how to raise funds like a pro, the faster you can make a difference and the more lives you can change. Click To Tweet

With some planning, the right message, and a little elbow grease, you can build a big, loyal donor base of people who want to see you succeed and will give nearly every time you ask.

THAT’S how you raise money for a new nonprofit.

Additional Resources

Grab our ebook Fund Your Dream if you’ve recently started a new nonprofit or have just taken your first fundraising job. You’ll find out how donor-based fundraising works and get ideas for your next steps. https://getfullyfunded.com/getstarted

 

Want to learn more about fundraising strategies and inspiring people to give? Join us for the Inspired Fundraising Retreat August 9-10 in Nashville, TN. You’ll get tons of practical ideas for telling your story, asking for money, and getting more donations. Get your ticket now at InspiredFundraisingRetreat.com.

By | 2019-08-09T20:56:33+00:00 August 6th, 2019|Fundraising, Nonprofit startup|1 Comment

About the Author:

Sandy shows Founders and leaders of small nonprofits how to fully fund their big vision so they can spend their time changing lives instead of worrying about money. She has helped dozens of small nonprofits go from “nickel-and-dime fundraising” to mastering donor-based fundraising, inspiring their donors to give often and give big.   Learn how to raise the money you need to fund your new nonprofit without begging, doing without, or paying out of your own pocket.   Click here to download our free ebook Fund Your Dream.

One Comment

  1. Jason August 8, 2019 at 10:03 pm - Reply

    This is a wonderful and comprehensive resource. We’ve got a great guide on our site on how to start a nonprofit. This is definitely a great “step 2.” for all new organizations out there.

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