Five Best Practices: Raising Money for Nonprofits

As our team transitions out of “Benefit Season” and into the Holiday Season, we’re reflecting on what we’ve learned in the past several months. In the past 6 weeks alone, Luminate Marketing helped launch three nonprofit fundraising events. The hands-on, concentrated focus on generating exposure online and raising funds for worthy nonprofits always teaches us more than reading articles or attending best practice seminars. We’ve seen first-hand what works, what people love, and what they don’t. So here are our observations, for your benefit (pun intended)…

1. SET A MEANINGFUL TARGET GOAL

Setting a target financial goal for the night/event helps donors gauge the need. They aren’t going to be as inspired to give as much when the goal is too high or too low. That’s why it’s important for a leadership team to develop a meaningful set of reasons for the target goal, considering factors such as:

Operating Costs for the Upcoming Fiscal Year
Amount Needed for New Project or Capital Campaign
Liability Insurance or Protection for Unforeseeable Circumstances
Financials tied to Specific Salaries, Initiatives, and Expenses (trackable/explainable)
Another point to mention here is that the target goal should directly support the vision communicated for the organization during the night/event. For example, if the Executive Director introduces a new Capital Campaign project, you can be sure guests will be wondering the following (and probably more) questions:

What amount of money raised tonight is going to the Annual Operating Budget as opposed to a Capital Campaign?
Can I/we give to one initiative specifically? To a specific program or ministry element of the organization?
How will my gift make an impact? Literally, what will my financial gift be used for?
Why do I need to give financially to address this particular issue? What will happen if this organization is not in existence?
It’s your responsibility as a leadership team/keynote/Director to explain all of the above. People want and deserve to know why they should give, and why your organization is the one to give to, which leads us to our next piece of advice.

2. EXPLAIN WHY PEOPLE SHOULD GIVE

There are many good causes. And in today’s economic climate, every charity dollar is more precious–and rare–than before. Showing pictures of hungry children is no longer enough; not even statistics might be enough. Today’s donors and nonprofit investors want to know their money is being well-spent. They not only want to know you’re running your organization like a business, but like a highly-focused business with a solid ministry model.

It’s imperative that in addition to the emotional-pull, which we will address shortly, you also convey the rationale behind your organization, and what it sets out (and is strategically designed) to address.

1. Clearly illustrate that there’s a need for the work you do (state the Need)
2. Present the solution (your approach, programs, structure)
3. Demonstrate why your organization is the one to address the need with the solution (ministry credibility)
4. Communicate what will happen if this important work isn’t funded/supported (create a sense of urgency)
5. Breakdown how their gift will make a difference, and as specifically as possible where/when it will generate impact

Most ministries and nonprofits we encounter attempt to address only a couple of these points. And trust us, if the members of your audience are serious-minded donors, they will (and should) be thinking about them all.

3. DON’T WASTE YOUR TIME

Spend your networking hours and personal invitations in a way that will generate a return. You can love your family, friends, co-workers and neighbors, without inviting them to a fundraising event. The purpose of a nonprofit benefit is to raise money, so you should only invite people who will contribute to accomplishing this goal. Of course there is something to be said for raising exposure for an organization, but a fundraising event is not the place to do this. That should be happening throughout the year with targeted online keywords, social media listening, strategic networking, etc.

Sunk costs for large benefits and galas can be considerable; the meal alone usually runs $50-$100, so inviting guests to your table that won’t at least cover their meal is not doing your cause any good. There may be pressure to fill tables and get people in the room…but it’s more important that they’re the right people, who come prepared to give, than the amount of friends you can rope together. If you are really serious about raising money, you can even take the event off of mainstream channels such as your website and social media, and keep it invite-only for high net worth individuals.

How do you tell people they are expected to give without sounding pushy or tacky? There are several ways. First, communicate clearly and consistently from the get-go. This applies both to online communications and in-person invitations (make this clear to Table Hosts). Language such as “Please come prepared to give” or “The purpose of the night is to raise $__ for __” is totally acceptable. If you’ll be having a silent or live auction, a more subtle way of communicating the base level of giving is something along the lines of “You will be provided with the opportunity to participate in a live auction; giving levels start at $250.”

4. DON’T WASTE YOUR MONEY

People don’t attend nonprofit fundraising events expecting (or even wanting) a lazar light show. We’ve seen nonprofits spend considerable amounts of money for creative execution of events, lots of videos and expensive multimedia presentations, and lighting effects – only to be disappointed. Unlike a concert or performance where an audience is expecting to be impressed by ‘theatrics,’ guests of a nonprofit benefit want to be moved. They want to be touched with compassion, and filled with hope. You can save a lot of money, and raise a lot of money, by cutting out an over-produced show. Go straight to the heart.

How do you do this? Focus on the clients you serve. There is a real, tangible need they have, or your organization wouldn’t even exist. Take your guests along the rewarding journey that you and your staff experience daily: life transformation for your clients. People love to see the impact an organization can make on the lives of those it serves. That’s the heart behind why you do what you do! So, avoid overdoing the production or being over-emotional, but don’t be afraid to pull on the audience’s heart strings a little bit. That’s what they want and why they’re there.

5. CONSIDER THE PSYCHOLOGY OF GIVING LEVELS

What will compel giving? That’s the million-dollar question. Marketing and fundraising have roots in many different philosophies, but the root all leads back to one thing: psychology. People instinctively respond more or less favorably to different words, phrases, and processes. Keeping this in mind will remind you who your guests are; not just prospective donors, but people.

Different giving strategies are of course more/less effective for different audiences and ministries. There are many strategies you can take, and we’ve seen multiple approaches prove successful. For example, if your nonprofit is very program-focused, consider raising money by program area. People will naturally be more drawn to and passionate about different topics and causes. If your programs address different goals or demographics, call that out and engage people at different points of the night in specific giving areas/levels.

When the night begins, will you be more likely to give $1,000 or $10,000? For some people it doesn’t make a difference because they’ve already come to the event with a specific giving amount in mind. They may even have already written the check. But for other guests, which we’ve found to be the majority, the order of giving levels you present is crucial. Rather than starting small ($50, $100, $200) and working your way up to $20,000, start at $20,000. This may seem counter-intuitive. The reasoning is this: when people see others give in large amounts they are more likely to feel the ministry deserves large gifts, and “group think” sets in for them to consider giving more.

Smart tip: for the first several high-amount giving levels in the night, secure the gifts from donors in advance. Call them and ask if they are willing to give at that amount; that way when the amount is called out by the auctioneer there are more than crickets in the room. And the excitement generated in the room from these large gifts will change the vibe and warm people up to a like-minded generous spirit.

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There is no golden standard or universal formula for raising money. If there was, everyone would be doing it. However, by avoiding common pitfalls and following a few best practices you’ll have higher probability for a successful event, and reaching/surpassing financial and ministry goals.

Written by: Luminate Marketing, www.luminatemarketing.com