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The Cost of Fundraising

If I were to ask most new nonprofit leaders to explain their perception of fundraising, they would undoubtedly describe it as the process of asking for money to put into programs and services.

Many would likely overlook the fact that fundraising also requires a big investment on the part of the organization.

Let me explain.

When you are preparing for the ask, it needs to go beyond submitting a proposal or meeting with the donor. Often times it requires much more than an investment of your time if you want to be successful.

I was reading an article about one of the most successful nonprofit organizations in the country. Their annual revenue went from approximately $17 million to more than $400 million in 10 years. Now, its current annual revenue hovers between $300-400 million dollars. Incidentally, this is an organization that was only formed 11 years ago.

Obviously, they clearly have a wonderful cause in which people want to invest. But a key thing they attributed to their ability to raise so much money was, in part, the investment they make in courting donors.

Before you start making excuses that your nonprofit is too small to invest, or that it’s easier for a large organization to do that, you should hear me out.

A former nonprofit I worked for had an annual budget of about 1.5% of the aforementioned nonprofit, but they were committed to investing in fundraising. They made a consistent, concerted effort to court donors.

It’s almost like the old joke of what came first, the chicken or the egg? Do they have a large annual budget because they invested in fundraising? Or are they successful in fundraising because of their large annual budget?

Regardless of what you believe, it is indisputable that you can’t get a return on an investment you didn’t make. For a further explanation on what I mean by that, you can check out last week’s blog on that topic.

So, whether you are a small or a large nonprofit, here are some ways you can invest in fundraising:

1. Host events for donors – a simple strategy several nonprofits use is to host a luncheon or dinner for donors and prospective donors to highlight their programs, celebrate successes and sometimes just to say “Thank You.”

Make sure it’s done with excellence. You’ll have to absorb the costs of a nice facility and good food.

2. Create a promotional video – hire a videographer/editor to create a promotional video that highlights the work of the programs and showcases the impact you’re having on your target population.

It’s more effective to hire a professional to shoot the video and edit it. It may be cheaper to shoot it yourself on an iPhone, but it won’t have the quality you need to be successful.

The video can be used to share on social media, send the link to donors via email, or to show at the beginning of a meeting when you’re trying to appeal to a foundation or an individual donor.

3. Produce a highquality annual report – this is a simple tool that can go a long way. It is worth the money and the time to invest in putting together a really good annual report that showcases the accomplishments your organization has made throughout the year.

There’s a lot of information that goes into an annual report, including statistical data. It also consumes a lot of time putting all the stories together, so you must be strategic about it. If you’re a small organization with little to no staff, then you should definitely consider investing the money to hire a consultant to do this for you.

If you are able to write the content yourself, then you’ll need to invest in a good graphic designer to make it visually appealing. This is a great resource to put in the hands of potential donors.

Many organizations create a digital version of this and also make a few hard copies for distribution to potential and current donors. So, you’ll also have to factor in the cost of printing.

4. Produce a quarterly newsletter – if you don’t want to invest in an annual report, you might consider producing a high-quality newsletter that goes out quarterly or twice a year. Ideally, it needs to be created with the donor in mind, so the content should be of interest to a potential or current donor.

You’ll need to absorb the cost of design, postage to mail it, and printing costs. You want this to be a quality representation of your organization, so putting in the money to do this right is a worthwhile investment.

These are just a few simple ideas you should consider as an investment into fundraising.

It may cost you something on the front end to appeal to donors, but if done well, it will yield a significant return on the back end.

Until next time…
Peace and Blessings!

Please note: I reserve the right to delete comments that are offensive or off-topic.

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