Most charitable nonprofits rely upon the generosity of donors for some or all of their funding. Consequently, fundraising is an activity of major importance to the charitable nonprofit community. Common Good Vermont offers many different opportunities – such as in-person workshops, webinars, peer learning programs and e-learning courses to help nonprofits to fundraise.
Fundraising from private foundations requires research to learn which foundations provide grants for which missions. The Foundation Center provides free funding information through more than 400 Funding Network locations, many in public libraries, community foundations, and other nonprofit resource centers. Fundraising capacity is just one of many muscles that an effective and sustainable charitable nonprofit needs to be in “top form” to advance its mission. Additionally, check out Vermont Community Foundation’s free Foundation Directory: https://fdovermont.foundationcenter.org/.
Be aware! Fundraising is a regulated activity
Before your nonprofit solicits donations, consider that the state(s) where your nonprofit operates has the authority to regulate its fundraising activities.
- Fundraising guidelines from the IRS
- Charitable solicitation registration with state government
- Professional fundraising consultants and grantwriters
- Ethical fundraising practices
- International fundraising: Voluntary best practices for U.S. based charities (US Department of the Treasury); International Statement of Ethical Principles in Fundraising (AFP)
If your nonprofit does not have tax-exempt status – Can it fundraise?
- Can our organization fundraise if it is not yet tax-exempt? (NEO Law Group)
- Consider fiscal sponsorship as a way to raise funds when your organization has not been recognized as tax-exempt by the IRS.
- If your nonprofit receives a percentage of sales through an arrangement with a for-profit business, make sure you understand the implications of cause-related marketing and commercial co-ventures.
- What happens to donors’ contributions when a nonprofit loses its tax-exempt status?
Christine Graham of CPG Enterprises offers useful advice for nonprofit leaders:
“While most people are interested in the technical aspects of raising money, the longer I am in the field the more I realize that it is the “intangibles” that help you to succeed.” She encourages us to break the barriers that keep us from asking. “You have to believe that “fundraising is an OK thing to do. That good feeling and reaching out is really what makes fundraising works. It’s not what you do. It’s how you do it. It comes from having a warm, positive and personal feeling about fundraising. Once you have that, you can make the best decisions about how to use the tools and techniques of fundraising.”
Graham advises nonprofit leaders to consider the following questions:
- How does money get raised with your audience? How does your audience differ and what do they care about?
- Why do people give? (You can raise more money when you ask for it!)
- How can you tailor your work to the people you speak with? And should you?
- Finding and creating interest among donors is one of the hardest things to do in Vermont. Make connections every way you can.
- Every fundraiser should become a philanthropist in order to understand why and how people give. If you want people to give, you have to become a giver too.
- Your attitudes affect your work! Try to feel positive, upbeat and full of expectation.
“Fundraising and development are partnerships with your donors. It’s a way of making the community a better place. That good feeling and reaching out is really what makes fundraising work.”
According to the Association of Fundraising Professionals, there are many moving parts to successful nonprofit fundraising and development. The work starts with a development plan which has the support of board and key staff members including the Executive Director and, if the organization can afford it, development staff and/ or consultants.
The development plan helps the organization target its audience(s) and craft a case for support, which forms the core of any appeal. Plus, the plan identifies the capacity (staff, volunteers, database, resources, budget) of the organization to raise funds from multiple sources including: annual giving, special events, major donors, grants, capital campaigns, endowments, planned gifts and online giving.
The Fundraising Pyramid is the foundation of a concrete plan that leads to more loyalty and larger gifts. The purpose of the plan is to move people to their “maximum capacity and commitment”. This development process can take years. The future of your organization is at the bottom of your pyramid. But you cannot continue today without the top level of donors (8-12 of your donors give you at least 60% of your money). The bottom, “grassroots” level will give you 5-15% of your money from as many as 30-60% of your donors. The middle category, “the transition people“, are generally moving up a level (and sometimes if lapsed, they’ve moved down from the top). These middle donors account for 30-40% of your fundraising income.
A cycle of stewardship involves these repeating steps for cultivating relationships and encouraging maximum giving:
- Welcome: Identify and Re-Identify Your Donors
2. Educate: Cultivate and Inform them
4. Thank and Steward
Your development plan should interface with your organization’s strategic planning, business plan and marketing plan. Successful fundraising and development is a combination of an open heart, imagination, tested tools and practical techniques.
About Christine P. Graham
Christine Graham is a specialist in Nonprofit Management and Fundraising. She has worked in the nonprofit sector since 1969 as staff and consultant to organizations of all sizes and in all fields, serving Northern New England organizations with focus today on annual, capital and planned giving. She was the founder of the Governor’s Institutes of Vermont and its first director, Director of External Affairs and Special Projects at Bennington College and Director of Resource Development at the Vermont Institute for Science, Math and Technology. She is the author of several educational books on fundraising. CPG Enterprises is based in Burlington and North Bennington, and www.cpgfundraising.com.