Launching a new nonprofit is an exhilarating feeling. With 501(c)(3) status, you have the beginnings of the framework to improve your community, change lives, help others, and realize your bold vision. But big goals cost big money. And that means you have to figure out how to raise funds for your new venture.
Figuring out how to fund your vision can feel like a steep mountain to climb.
Where do you start? Should you fund your work out of your own pocket? Should you start a Go Fund Me or turn to a Facebook fundraiser?
Self-funding a nonprofit is not sustainable. Some founders are able to contribute a chunk of money in the early days to set up the infrastructure, but to bring in the consistent money needed to fund big dreams, you have to get comfortable asking others to pitch in.
And Go Fund Me and Facebook are quick-hit solutions that will only take you a short distance.
To fully fund your mission, you have to become a fundraiser. You have to get comfortable asking people for money, even if you think asking for money is the last thing you would ever feel comfortable doing.
First Steps: Learning and Planning
As with all big projects, it’s important to learn all you can.
Then, draft a plan.
With a plan, the mountain will not feel so steep. You can break the mammoth task of raising your operating budget into small steps that feel less intimidating.
Fundraising is a skilled profession. It is also a craft.
To become a fundraiser, start by learning the skills and commit to mastering the craft, which takes time. There are many free resources including YouTube videos, webinars, and e-books. By spending time with these free resources, you will start to hear the same themes, such as diversifying your funding streams, finding the right donors for the work your organization does, and nurturing your relationship with your donors so they keep giving. Just beware – there are so many free resources out there that you might feel a little overwhelmed if you try to take them all in!
Once you feel comfortable that you understand the basics, it’s time for a plan. Our Nonprofit Fundraising Success Path provides the checklist you need to make sure you are covering all your bases before you start asking for money. Your path starts at Stage 1, which is just having the idea and deciding to go for it.
The next stage is about building a solid foundation, and this does NOT include asking for money yet. Before you start making asks, you have to assemble your Board, recruit your initial volunteers, set up an accounting system, establish a website, and tackle a few other tasks. This will give your organization the infrastructure, systems, and professional polish you need to gain the trust of donors.
With your plan in place and your infrastructure built, you are ready to start fundraising.
Here’s How I Got Started in Fundraising…
I started my fundraising at 6 years old selling candles and candy bars for my elementary school. Don’t so many of us start there?
Like others, I figured out real fast that fundraising was harder than it looked.
My professional fundraising career began when I accepted a position on the Board of the local rescue mission. I had absolutely NO IDEA what I had said “yes” to. Fortunately, I had some experience in marketing that gave me ideas about how to help the nonprofit. And I had a burning passion to help people.
After a year of Board service, I was asked to join the fundraising staff for the organization and of course I said “Yes!” Some things I knew how to do, like tell the story well. Other things, I had no idea about. I knew that if I didn’t learn how to ask people for money, my efforts to help people would be limited by my fear of fundraising. So, I jumped in!
First, I got organized. Fundraising involves so many tasks, and I realized early on that I needed processes to make sure all the levers got pulled. Next, I paid attention to why people cared about the organization. That seemed to be the central question. If I knew why our existing donors cared enough to keep giving, I could find more donors who would care just as much.
We had some existing fundraising activities for me to build upon. I tweaked those activities, and money started pouring in. I realized I was good at fundraising! The board chair called me one day and flat-out asked me: “What the heck are you doing to bring in so much money?”
It felt amazing to bring in money. But raising money once is one thing. Raising money again and again was much harder. There were so many strategies to try, but every time I tried something new, I had to figure out all the details and execute all the steps.
It took time for me to realize my initial instinct was spot-on. My most valuable asset was my donor base. I paid close attention to their experience as a donor. I stayed in close communication with my donors. That was the key to my initial success.
I hate watching people struggle with fundraising, because it just isn’t necessary. While there are a lot of tasks on the checklist, the underlying principle is simple and unchanging: value your donors. It may be tempting to treat donors like an ATM. Do this, and you will lose them. Treat them like the valuable assets that they are, and they will stick with you and continue to give. They will also bring others into the fold.
Fundraising Myths That Won’t Bring in the Dollars
When planning your strategies to raise funds, look for strategies that work for new nonprofits.
Avoid strategies better suited to established organizations. And avoid things that you think might work, many of which might actually be wrong.
Here are some common fundraising myths that trip up many new nonprofits:
My first step should be finding grant opportunities! Grants can be an excellent source of revenue, but not for new nonprofits. Most foundations want you to have three years of programming with data that demonstrates your approach is successful, before they invest in you. Even when you have three years of solid program success, it is unlikely you can fully fund your organization through grants. Most foundations won’t fund your program year after year. They will move on to other organizations. Even though there are thousands of foundations giving away money, only a few will be a match for your organization. Foundations often restrict how their money can be spent. Some will not allow their money to be spent on facilities and utilities. Others will not allow funds to be spent on salaries. In most cases, grants become a funding source after you establish your program. And grants will be just one funding stream for your organization.
I will hold fundraising events to fund my nonprofit! Fundraising events are the most visible form of fundraising, but they provide the lowest return on investment. It takes so much time, energy, and money to put on an event, that the money the event pulls in often is not worth all that effort. A well-timed, well-managed signature fundraising event can generate a lot of publicity and funds, but lots of little events are not the way to fully fund a new nonprofit.
I will fund my nonprofit with corporate donations! Corporate donations require relationships that take time to cultivate. Corporations are usually not the first stop for a new organization. The best way to get a corporate gift is through a connection at the company. The insider can champion your request and walk the request through the internal steps for approval. But there are often strict rules and enrollment periods that can make it difficult to secure the gift. And a gift from a corporation is unlikely to be renewed the following year. Corporate gifts can be a source of revenue, but they are not the solution for a new nonprofit seeking start-up funds.
Big gifts from rich people will fund my nonprofit! Instead of targeting people because of their income, approach people because of their values and interests. In some cases, the people with a passion for your organization’s work may be wealthy and able to give a large gift. But in many cases, the people most passionate about working with you to better people’s lives will be of more modest means.
Crowdfunding seems like an easy way to raise money! Crowdfunding is not a build-it-and-people-will-come model. It works best when you already have a faithful following, which makes it less than ideal for a new nonprofit. Some prospective donors are skeptical of crowdfunding platforms and don’t want to share their credit card information. Others don’t like the fees charged by crowdfunding platforms. Like many strategies, crowdfunding is best regarded as one of many revenue streams. It works best when you have a specific need that tugs at people’s hearts.
I’ll pay for everything myself until other people notice the great work I am doing! Trying to self-fund your nonprofit will leave you exhausted and feeling alone in your work. Nonprofits need supporters to grow and thrive. Nonprofits need a team of people who care deeply about the work pulling together and working toward a goal. This is how nonprofit organizations gain momentum. A nonprofit cannot be a solitary enterprise.
If only I can find an angel donor to fund all my great work! An angel donor is dependent funding. If you are solely dependent on one person, your organization will collapse if that person walks away. The way to build a sustainable organization is to involve a network of people who are committed to the work. Relying too much on a single person to write a big check year after year puts your organization at risk. You need dependable funding.
Do What Works
What does work to raise funds for a new nonprofit? Approaching the right people at the right time with the right message.
This is how you get donations. Every time.
This proven formula starts by finding the right donors, donors who care about the type of work your organization is doing and are excited to get involved.
Through careful cultivation of the donors you have and constant recruiting of new donors, you build a big, loyal donor base of people who love to support your organization because they believe the work is important. You keep your donors interested through frequent communication. Then, you ask for their support. If you do the first two parts right, your donors will be happy to give. In fact, giving will be a foregone conclusion. The ask is just a formality.
So how do you find these ideal donors?
Start with people you know. Ask family and friends to give. Even if they can’t give much, every dollar counts. Let them know you are building your nonprofit one dollar at a time and you want them to be part of it.
Next, ask your Board members and volunteers to give. They already care deeply about the work. If they didn’t, they would not give freely of their time. Volunteers might consider the time they spend as their gift, and if they do, let them know their time is a generous gift. Every Board member should make a donation of an amount that is meaningful for them. They are leaders of the organization, and they should demonstrate leadership with a personal financial contribution (so you have 100% Board giving!).
Next, find others who share your excitement about the cause. Create an Ideal Donor Profile. This will help you bring clarity to the person most likely to give to your nonprofit. The more details you have about who your ideal donor is, the more successful you will be in finding people who fit that profile.
Here are some questions to consider:
Gender: Who is most likely to support your organization, men or women?
Age: How old is your typical donor? Is there a reason why older or younger people are more attracted to your cause?
Education and professional background: Is your organization’s work attractive to lawyers because you provide legal aid to women fleeing abusive partners? Or is your work attractive to teachers because you are directing young people toward STEM careers?
Other activities: What do your volunteers do when they are not working? Are they involved at church? Are they volunteering at their children’s schools? Are they cheering their favorite team at sporting events? Are they attending the theater?
Volunteering: Do your donors also volunteer? Where do they volunteer? What types of volunteer activities do they like?
Hobbies: Are your volunteers avid readers? Are they avid crafters? Do they go to trivia nights? Do they put a lot of energy into their pets?
When I worked at a food bank, I worked to understand my Ideal Donor. What I noticed about them was this:
- Middle-aged or older
- College-educated professionals
- Active at their church
- Volunteers in their community
I looked at my donor list and thought: “Where can I find more people just like that?”
The answer was obvious: women’s groups at churches.
I lined up speaking opportunities, put together a presentation with a clear call to action, and off I went. At one church where I spoke, almost everyone in the room signed up to hear more about our work and find out how they could get involved. Their names went directly onto our newsletter list. Several women handed me a check or cash. A few days later, I got a check from the group’s treasurer. And from there, I got requests to speak to other groups. It was a win!
I used this technique many times, and it helped me raise awareness and add dozens of new supporters every time I spoke at a church or to a community group.
How to Ask for Money
Once you have identified and located your Ideal Donors, it’s time to ask for a donation so you can raise the funds you need for your new nonprofit.
How you ask is important. Your job is to convince donors what you already know – that the work your organization does is urgently needed to change the community and the world for the better.
When you ask for money, don’t say this: “We’re a nonprofit organization, and we have several programs serving the underprivileged, at-risk population. Please give, so we can reach our goal of $10,000.”
What donors hear when you deliver this type of message: “Blah, blah, blah, blah, blah blah.”
Instead, let people know exactly how they can make a difference. Here are some points to consider when choosing your words:
Make your ask interesting. No one likes to be bored. Use descriptive language, and let your excitement shine through when talking about your work.
Tell a story. It’s a technique that worked for Jesus. When he wanted people to understand his teachings, he told stories. Not everyone who went to Sunday School remembers Bible verses, but we remember the Good Samaritan. By telling a story, you will help the donor connect to your mission.
Describe the impact. No one cares how many staff people you have, how badly you need a new building, or what your operating budget is. They want to know how the work your organization does makes people’s lives better. How many homeless people will get a meal because your donor chips in $50? How many students will get to participate in an afterschool program? How many kittens will get spayed? When you connect the donor’s gift to the difference the gift makes, people get excited and want to give. They want to be part of something important.
Give your donor the opportunity to step into a heroic role. This is what we all want. This is what makes us feel amazing. We want to feel like a hero, if just for a minute. Let them know there is a serious problem in their community or elsewhere in the world, and they can be part of the solution by making a gift. They can change someone’s life for the better. They can give a hungry person a meal. They can pay for tutoring so a student can catch up in math. The better you are at placing your donor at the center of your story, the more likely the donor is to give.
Include a call to action. After you have told your prospective donor how they can step into a heroic role and make a difference in a person’s life, you need to tell them the next step. You need to tell them how much you need, where the money will go, and how they can donate. Give them an immediate way to give, whether it’s a link or a pledge card. Always give the prospective donor instructions on what to do next!
How to Keep Raising Funds for Ongoing Needs
When you get a gift from a first-time donor, your job is to hold onto that donor, to keep them coming back to your organization, eager to give more.
At this point, it is more important than ever to treat your donors like people and not like ATMs. Focus on what the donor wants to get from the relationship and find creative ways for the donor to continue making people’s lives better through your organization.
As you build relationships, focusing more on the donor and less on their money, you will develop a core group of supporters who will be there for your organization every time you need them.
To keep donors feeling wonderful about their role in your organization, use these tips:
Planning is key: Carefully plan the programs and services your organization will provide and determine the exact cost to deliver these services. When you ask for support, you can let prospective donors know exactly where their money will go. All organizations have occasional emergency needs, and longtime supporters will give to their trusted organizations when times are tough. But donors prefer to fund programs that are well-planned and executed.
Communicate regularly: Send an email newsletter monthly, update your social media channels daily, and keep supporters informed about how their money is being spent. Be deliberate and consistent in your communications to build trust with your donors. Trust builds relationships. These relationships are the foundation of good fundraising.
Finish your stories: Donors love updates. Let them know what happened after they gave. Did the student they supported with tutoring pass their math class and move onto the next grade? Did a man who had been staying at the homeless shelter for a long time find permanent housing? Did the puppies you rescued from neglect find loving homes?
Add personal, warm touches: A thank-you letter is not the end of the process. It’s just the beginning. Take a few more steps to thank a donor so they experience the full impact of feeling appreciated. Call donors to thank them for their gift, especially if it is more than $100. Take a donor to lunch to thank them and ask their opinion of your nonprofit’s work. Take time to answer their questions via social media or email. All of these actions add up to making the donor feel special, connected, and appreciated. This significantly increases the chances that the donor will give again.
Treat donors like partners: Donors are people. They are not checkbooks. They want to be treated like the people they are, people who are invested in the organization’s work. Think about it this way: You have an emotional bank account. Each time you ask for support you are withdrawing from the account. When you help the donor feel good about their decision to support your organization, when you send a thank-you note, when you share an emotional video, you’re making a deposit into the account. You need to make more deposits than withdrawals in the emotional bank account! If you make too many withdrawals, your account will be overdrawn, and the account will be shut down.
The Bottom Line
With careful planning, the right message, and a lot of effort, you can build a big, loyal donor base of people who want your organization to fulfill its mission and will give almost every time you ask.
That is how you raise money for your new nonprofit!
What is the most effective way to fundraise?
You 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.
How can I raise money to start a new nonprofit?
When you’re clear about what your new nonprofit will do, it’s easy to share that message with friends and family who are the most likely to give to help you make your dream a reality. Don’t be afraid to ASK these folks for help. They’re the closest to you and the most likely to believe in you and your vision for making a difference.
Where do I find donors to give to my nonprofit?
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. Finally, look for others out there who share your excitement about your cause.
How do I ask for donations?
Choose your words carefully when asking for donations, so people know exactly how they can help you make a difference. Your ask should be interesting, with a story, and should describe the impact. It should turn the donor into the hero AND include a call to action.
How do I keep people giving regularly to my nonprofit?
Work at building relationships and giving people a good giving experience so they want 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.