Are We Doing Enough? Why Individual Giving Matters

Last week in our series, 4 Lessons from the Trenches to Prepare for Giving Season, we talked about how nonprofits of all sizes face capacity challenges when it comes to finding new donors and developing new, creative campaigns. This week, we’ll discuss how to create the right mix of funding sources to make your mission sustainable.

For a nonprofit to have a healthy foundation, there needs to be a variety of funding sources. In general, each funding source should account for no more than a third of your operating budget. The idea is that, should a nonprofit lose a third of their funding, it can restructure, recover, and move forward – but losing more than a third would put the nonprofit at a high level of operational risk, which may not be able to be overcome.

A sustainable funding mix could look something like this:

  • one third from grants
  • one third from fees-for-service, in-kind donations, and/or sponsorships
  • one third from individual giving and events

We found it interesting that some of the nonprofits we worked with in Baltimore admitted that individual fundraising hadn’t been a priority for them, especially since they’re currently well-funded through grants and fees-for-service. Others knew they needed to diversify, but did not know exactly how to get started with their individual giving program. With grant renewal never a guarantee, having that base of individual donors provides much-needed security in the event of that grants or other sources become restricted.

Here are three reasons every nonprofit should have an individual giving program:

  • Increased awareness for your mission
  • Deeper community involvement and support
  • Financial diversification and a bit future-proofing

With that said, whether you’re new to fundraising or need a refresher, there are a few key points to keep in mind.

  1. The number one indicator of fundraising success is having a plan. This is the continual finding year after year in the Individual Donor Benchmark Report.
  2. 30% of all nonprofit donations are given during the month of December, from #GivingTuesday through New Year’s Eve. If you’re new to individual fundraising, now is the time to get on board (in time for this year’s giving season).
  3. Donors give when they have an emotional connection to the cause, either through the cause itself or the one asking on its behalf. There are many ways to create this connection.
  4. There are tools that make fundraising easy, and they’re affordable, even for small nonprofits. From eye-catching donation pages from fundraising software that include donor email templates and automatic gift acknowledgements, you don’t have to do this fundraising thing by yourself.

Now go start planning your campaign for year-end 2017! And check back next week for the final installment of our series, about the power of a team.

Engaging Your Board In Year-End Fundraising
6 DOs and DON’Ts of Hosting an Auction
How to Create Your Nonprofit’s Social Media Presence
How Our Nonprofit Managed Donor Outreach During a Virtual Year-End