How to Analyze the Fundraising Potential of Your Nonprofit - dummies

How to Analyze the Fundraising Potential of Your Nonprofit

By Stan Hutton, Frances Phillips

Different approaches to raising funds work best for different kinds of nonprofit organizations. When you make a fundraising plan, you have to be both ambitious about your goals and realistic about what’s likely to work for you. As you try to figure out how much money you can glean from each possible funding source, answer the following questions:

  • How far do your services reach? Do a lot of people understand, care about, and benefit from your organization’s cause? Do you focus on a small geographic area or work at a national or international scale? The answers to these questions tell you whether your nonprofit should be casting its net close to home or all over the country or world.

  • Are you one of a kind? If you’re unique, you may have a more difficult time explaining to potential donors who you are and what you do. But you may have an advantage when you appeal to foundations that like model programs and new approaches to solving community problems.

  • How urgent is your cause? When a river floods a community or famine breaks out in a refugee camp, if your nonprofit is on the scene providing emergency shelter and food, you’ll find that social media tools can be particularly effective in raising money from people who understand the importance of responding quickly.

  • Does your cause elicit strong feelings? Even if it doesn’t appeal to large numbers of people, a hot topic with a few passionate believers can still attract major gifts. However, organizations that focus on potentially controversial topics — such as family planning, use of pesticides, or incarceration of juveniles — may find that corporations and businesses are uncomfortable with having their names associated with the cause.

  • How well-known and highly regarded are your leaders? Most people feel better about supporting an organization when they believe in its leaders — whether they’re famous research scientists or well-liked next-door neighbors. People give money to people they trust, so your organization’s leaders (both staff and board) are critically important to its fundraising.

  • How well-known is your organization? Just as any commercial company with a well-known brand name has an easier time selling its products, a nonprofit with a widely recognized name often has an easier time attracting contributions from individuals. On the other hand, an agency with a low profile that’s recognized by experts for doing good work may be more successful with foundations.

  • Whom do you know? Your nonprofit’s contacts are important to its ability to raise money, especially when seeking funds from individuals. Knowing somebody who may write a big check is great, but knowing a lot of people who may write small checks is just as beneficial.

  • What can you provide to a donor? Many donors appreciate when they benefit from their gifts to you, so look at what your nonprofit can provide. Maybe your organization can offer contributors the best seats in a concert hall or introduce them to visiting musicians. Organizations that are easily able to give tangible items and special recognition to donors may be particularly successful with membership drives or corporate campaigns.

  • Can you cover the needed fundraising costs? Special events and direct mail (fundraising letters sent to large numbers of people) are expensive forms of fundraising. Grantwriting takes time, but its cost is relatively low.

  • Do you have fundraising expertise? Do staff members, board members, or volunteers have experience with raising money? If not, can your organization afford to hire expert help?

  • How does this year’s fundraising climate compare to last year’s? Apart from the value and importance of your wonderful organization, donors give money according to their capabilities, and those capabilities change with the times. Corporate mergers, natural disasters, and economic downturns all affect how much money your organization can raise.