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Current nonprofit sector research and recommendations for effective day-to-day practice from ASU faculty, staff, students, and the nonprofit and philanthropic community.
Fundraising is an undeniable part of the nonprofit sector, particularly for 501(c)(3) public charities. Like it or not, money is the fuel of the economy in a capitalist system. According to the National Center for Charitable Statistics at The Urban Institute, 2013 saw $1.74 trillion in total revenue for the nonprofit sector. Roughly 21% of this came from gifts, donations, and grants, while 79% came from fees, contracts, and other revenue streams. In short, almost a quarter of the sector’s revenue comes from fundraising.
According to the 2014 Giving USA Report, 72% of all giving is done by individuals. This means that the quarter of the nonprofit sector’s revenue that comes from fundraising is mostly made up of contributions from individual donors. According to the US Census Bureau, 73.4% of all households reported having high-speed internet access. In every age category, over 50% of households have high-speed internet access. Even in states where the amount of people with high-speed internet access is lower than the national average, at least 62.3 percent of people have high-speed internet, with at least 80% owning a computer. According to the Pew Research Center, 73% of online adults use Facebook. Over 80% of all adults under 50 use social networking sites of some kind.
The reality of the age we live in is that the internet is here to stay. Younger generations have been raised with it and on it. It has become the way we get news, the way we entertain ourselves, the way we communicate, and, in many ways, the way we do business. The nonprofit sector must take heed to proceed carefully, as more and more of our fundraising begins to happen online. The days of major donors being completely cultivated and stewarded online are not here by any means. But the days of these donors only having knowledge of, and contact with your organization through personal face-to-face interaction are long gone. The internet has become a vital tool in our nonprofit fundraising arsenal, and as such we must move forward with gusto in this area.
As we move forward, we have to make sure that we do so in a way that allows our fundraising online to be reliable and sustainable. If we do not, we run the risk of damaging our donor base and running out the potential for funds. Organizations would be wise to heed the following recommendations as they begin to utilize internet-based fundraising.
1.) Make sure your website contains compelling, accurate, and broad information about your organization. If donors are going to give online, they will want information about your organization to support their decision.
2.) Provide information about alternate methods of donating. Some donors will want to meet you online, but are still uncomfortable processing financial transactions electronically.
3.) Consider using a suggested or minimum donation. That way, you can take into account the amount of cash that may be lost from the processing fees common for online transactions.
4.) Thank your donors online, too. This is not commonly done by organizations yet. As we move into an even higher level of digital engagement in society, organizations need to be prepared to meet and thank donors through digital platforms.
5.) Consider the type of project you select for crowdfunding. Crowdfunding is a risky gambit for anyone, even nonprofits. You do not always meet your goal, and if you do not, you often lose out on much of those donations. Projects that are most likely to succeed are in the arts. Think about using crowdfunding for murals at your new office space or, potentially bringing in a performer for your clients.
6.) Treat crowdfunding campaigns similarly to capital campaigns. Projects are most successful on crowdfunding sites when donors see a large amount of donations in the beginning with the chance to complete the project well before the deadline. Like the “quiet phase” of a capital campaign, organizations would do well to secure a good portion of the goal before launching the campaign so that this will be achieved.
7.) Develop a large, diverse network on social media. Organizations that do the best on social media have the largest networks. These networks will promote, share, and advocate for your cause leading to an increased donor pool for your organization.
8.) Take to social media only to fundraise for immediate solutions to problems. The most successful social media fundraising is done for problems with immediate, time-sensitive solutions like disaster relief or book drives. Donors want to know they are meeting an immediate, tangible need.
9.) Consider ways to engage all social media stakeholders and donors in your organization. While the members of your network on social media will like, share, and promote your cause, they are generally not the people who actually donate to the mission’s cause. Donors should be brought into the network officially, and those already in the network should be engaged more formally in the organization through fundraising, volunteerism, or research.
Internet-based fundraising is similar to most fundraising. It requires thoughtful planning and specific intent. Simply putting a “Donate Here” button on your website will not lead to sustainable results. Organizations must choose carefully the type of online fundraising they wish to pursue, plan how they are going to pursue it, and then give that plan the full support of their organization. If they follow these suggestions and give it the proper attention it deserves, most, if not all, organizations should be able to reliably utilize internet-based fundraising for sustainable resource development.
Kevin Godfrey is a recent graduate of the Masters in Nonprofit Leadership & Management program at ASU. He received a BFA in Dance from the University of Arizona in 2003. He spent the next several years teaching dance, choreographing, and running a small nonprofit dance company. Upon returning to Arizona in 2010, he got involved in the local nonprofit community with a focus on the LGBTQ community and Education. A former member of the Board of Directors for Phoenix Pride and longtime volunteer for Onenten, Kevin is excited to take the skills he gained in his masters program and help change the world. He plans to focus on education and social justice.