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I often hear many nonprofits tell me that they need to start building an individual-based fundraising strategy – better late than never, but it’s still alarming just how many organizations aren’t focusing on individual fundraising.

With grants dwindling and becoming more and more competitive, events being so time consuming and expensive, and pay-for-services being very difficult, nonprofit need to on individual donor relationships to achieve sustainable and scalable fundraising!

Here are three reasons why nonprofits should focus on individual fundraising, rather than grants and corporate sponsorships:

1. You control your own destiny

A 2013 survey by the Bank of America Charitable Foundation found that:

  • 42% of nonprofits do not have the right mix of financial resources to thrive and be effective in the next 3 years.
  • 1 in 4 nonprofits has 30 days or less cash-on-hand.
  • Over the next twelve months, 39% plan to change the main ways they raise and spend money.
  • 23% will seek funding other than grants or contracts, such as loans or investments.

This lack of cash may be a symptom of a lack of individual fundraising.

With no guarantee that you will receive the grant(s) you apply for, it’s hard to count on them for your yearly strategic plan. Grants are also very restrictive on what the dollars can be used for, not to mention the amount of manpower it takes to apply for them. Corporate sponsorships can be even hard to come by and one large event annually is a risky bet if you rely on it for a majority of your revenue.

Strengthening individual donor relationships is a far better use of your staff time. Rather than being beholden to a large, outside entity, what if you relied on individuals who truly believe in your cause? With their unrestricted funds, you steer the ship, instead of a government official or a corporate marketer who needs a tax write-off.

2. Growth and stewardship

Individual fundraising allows for scalable growth!

How?

Imagine a donor who is properly stewarded and is fired up for your organization. Not only do they give, but their passion about your mission is contagious… meaning he or she spreads the word about what you do. Individual donors can also be upgraded, meaning your funding source can grow year after year if the relationship is nurtured.

3. Donor loyalty and retention

Just a 10% increase in individual donor retention can double the lifetime value of your database! Even if you retain every grant you are currently receiving, most allocations are going down, not up (even if the amounts stay the same, you still lose because of inflation).

As you build out loyal donors and seek to increase donor retention, this funding source will continue to grow and grow allowing for unrestricted dollars coming in to support your mission!

Also consider the ROI of your staff time and efforts; staff that focus the majority of time on communicating and strengthening relationships with donors will bring for more long-term success to your nonprofit. Trying to sway elections becomes far less meaningful if your success is rooted in building loyal donors.

Having a vibrant, individual donor strategy can truly bring stability, flexibility, and greater success to your mission.

Has your organization weaned off grants in favor of individual fundraising? Are you struggling to get individual fundraising off the ground? Let us know in the comments below!

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Wayne Robbins

Wayne Robbins

Wayne Robbins was VP of Sales at Bloomerang. A graduate of Hyles-Anderson College, Wayne has over 15 years experience in nonprofit and faith-based development and fundraising in addition to his 10 years of experience in sales.