Right on the Money: Is Your Nonprofit Ready to Raise Money From Individual Donors?

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Dollar sign.

Foundation and government grants don’t last forever. They often require strict reporting back to the granting organization. And grants can only be used for a particular purpose, leaving organizations strapped when emergency cash is needed.

Those are just a few of the reasons nonprofit groups might want to seek gifts from individual donors, says Patricia Hung, executive director of the Grassroots Institute for Fundraising Training in Oakland, Calif.

There are “people reasons,” too, she says. “Grassroots fundraising gives the community a chance to get involved with the organization.”

To determine whether raising money from individual donors is right for them, charities need to ask a few basic questions, Hung says:

Do we have a clear and inspiring mission? If your goal is to help youth and families, and you do it effectively, the answer is most likely yes.

Do we have a “base” of constituents? Hung defines constituents as “a group of people you regularly work with” such as clients (youth and families), volunteers or neighbors. Even if you serve an impoverished area, having genuine relationships with people in the community makes fundraising easier, Hung says. “They won’t necessarily be your major donors, but they can help you tell your story or raise money.” Potential donors respond well when they hear from someone who has been positively affected by your organization, she adds.

Do we have an infrastructure that will support our fundraising efforts? Hung says groups should have the following:

  • A database into which they can input the names of people who made a donation, the amount they gave and their contact information. An Excel file will work to start, but for the long term, consider investing in fundraising software, she says. (Learn about inexpensive donor databases in an article from TechSoup.org.)
  • Staff and volunteer time to solicit donations, thank people and do other follow-up.
  • A fundraising strategy that includes a basic plan about how much money you aim to raise from how many donors, a timeline and a budget.

Do we have support from people throughout our organization? Hung recommends that there be someone on staff willing to coordinate the fundraising effort and that the group’s leaders, including board members and the executive director, be willing to pitch in.

Once you’ve determined that you’re ready to raise money from individuals, Hung says your work will be easier if you integrate your fundraising into the work of your mission from the get-go. “Fundraising feels more onerous when it’s a separate action that has to be managed,” she says. For instance, rather than planning a separate event for donors, invite them to an end-of-the-year party for clients or to a talent or fashion show. Not only will you avoid the costs of another party, but donors will get to see how their contributions are being put to work.

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