After nearly a decade working in fundraising in several countries and in organisation’s big and small, it has become apparent that the majority of NGOs continue to see grant funding as the panacea to their fundraising challenges. Time and again when new projects are proposed or when financial difficulties arise NGOs will point their fundraisers in typically one direction, large grant project funding.
Proposals to grant makers absolutely have their place. They can provide large sums of funding that can kickstart projects, revitalise organisations and permanently change the landscape of their work. However, grant funding is not without its own challenges which anyone who has pursued this line of income will be familar with: The competition is fierce, finding the right fund at the right time can be extremely difficult and often the biggest problem of all, it can sometimes take between three and eighteen months until you get a result.
Despite the obvious lure of grant funding as a one stop solution, it still surprises me that so many organisations continue to neglect individual donors. These people are by far the biggest contributors to non-profit organisation’s in mature markets. In America last year, for example, individual donations accounted for 82% of the contribution’s to NGOs compared to just 13% for grant funding. Surprised? Don’t worry, this understanding is shared by a wealth of NGO managers who really should know better.
“It is time to destroy the myth that grant funding is the answer to most fundraising dilemas”
With all of that in mind, it is time to consider how your organisation works to develop your first time donors into someone that will want to support your organisation time and again, now and in the future.
FundsforNGOs Top Tips for Nurturing Individual Donors
- Nurture over recruitment: It is estimated that it costs around ten times as much money to recruit a new donor rather than nurturing an existing one. Use your time and resources effectively to develop your donor’s interest in your cause over time. Provide them with more and different ways to contribute and get involved, thank them well and make them feel special. Make it a priority to retain your existing donors and to secure a second gift from them within a specified period.
- Develop genuine relationships: To a larger extent than most people admit, a significant number of donations are secured due to the relationships between individuals. Friends will donate other friends, colleagues to colleagues, family to family and it is this type of relationship that you want to work towards. Ideally, you want your new donor to stay involved in your organisation for life, just like a life long friend.
- Get to know your donors: It can sometimes be difficult to understand every donors motivations for supporting your cause, but you should endeavour to find out whenever you can. This might actually be a good role for a trusted volunteer if you don’t quite have time yourself. Simply give them a call, thank them for their support, ask why they chose to support your NGO, explain how you expect to use their contribution and what difference it will make and lastly, remind them that if they ever want to speak to someone or to visit the organisation they are very welcome to get in touch. Most won’t actually visit, but all of them will be pleased by how open and accessible you are.
- Deliver something amazing: Donors support charities for hundreds of different reasons, but one of the most common is that they want to see their contribution improve lives. Show them how their money has really changed lives for the better through letters, pictures, videos or however else you choose to showcase your organisation’s impact. Thank them and make your donors feel a part of your success story and that it wouldn’t have happened without their support. In short, help your donors to feel great about supporting your cause and that their contribution has helped achieve something incredible.
- Give you donors a choice: Individual donors have typically had very little control or influence over how their donations are used, but it doesn’t have to be that way. In fact, you can often coax a significantly better donation from your donors if you can provide an opportunity for them to donate to something that is particularly close to their heart. Even within a small organisation you can expect to find a few different projects or different types of beneficiaries which may hold great appeal to some donors. Even if your donors are happy for you to spend their contribution however you choose they will still be delighted to be given the opportunity to have a say in how their money is spent.
What happens without a donor retention plan?
- Disappointing donor retention rates that cost your organisation additional funds to replace year after year.
- Lower contributions to your organisation in the form of legacies which are gifts from the estates of people who have passed away. Although these funds are relatively rare, often they can be worth a significant amount.
- Poor word of mouth networking which will result in lower donations than otherwise expected. Although you will not notice a deficit in your fundraising returns this income still represents a lost opportunity to generate funds.
- Donors are likely to experience higher levels of dissatisfaction than necessary resulting in less repeat contributions, gifts of a smaller size and ultimately they are likely to migrate from your organisation to another that ensures that their donations are recognised.
Does your organisation have a donor retention program in place? Do you know what rates of donor turnover your organisation experiences? Support the community and let us know in the comments.
