A Year-End Guide to Effective Fundraising for Nonprofits
By Lisa Hirst Carnes | December 2020
As the chaotic year of 2020 winds down, nonprofits are seeking ways to close the year on a strong note. Fundraising as the holiday season and New Year approach can be challenging, especially at a time when many people are feeling uncertain and holding onto their wallets. However, there are strategies that help you maximize your fundraising efforts.
The Importance of an End-of-Year Strategy
The final weeks of a year are especially crucial for nonprofits. There are several reasons for this.
- Many donors are eager to make tax-deductible gifts before the year ends. While they can do this at any point, people often start thinking about tax season at the end of the year and this is their last chance to make donations they can deduct.
- People often make yearly donations around the holidays. You want to remind them of your organization, so they can allocate some of these gifts for you. In fact, NP Source reports that 30% of all giving happens in December.
- Ending the year successfully helps you move smoothly into the coming year. You'll want to have funds available for new projects and campaigns.
Determine a Fundraising Baseline
To set appropriate goals, you need a baseline. You need to analyze your data and understand what it's telling you.
- Know your CPDR. You can't only look at the amount of money coming in. Cost per dollar raised (CPDR) is a critical metric that lets you know how much your fundraising campaigns are costing. To arrive at this figure, simply divide expenses by revenue for every fundraising activity or campaign. Make sure you calculate spending for each campaign so you can determine if you're making money, losing money, or breaking even.
- Tracking donor acquisition. A nonprofit needs to consistently acquire new donors as well as retain existing ones. You should be measuring both of these metrics.
- Size of donations. Some donors may give you $1 and others $100,000. You should be tracking the average gift size as well as the median so you know what type of gift is typical. Is this number rising, falling, or remaining consistent?
These metrics help you identify patterns.
Set SMART Goals
It's not enough to simply have goals. You need goals that motivate you and whose progress you can track. SMART goals are:
- Specific — Goals need to be specific so everyone is clear about what you're trying to accomplish.
- Measurable — If you can't measure a goal, you have no way of knowing how much progress you're making.
- Achievable — Goals should be ambitious but realistic. Consider your resources, history, and current conditions when setting goals.
- Relevant — Make sure your goals are actually helping your organization in the long run.
- Time-based — Every goal needs a time frame.
Examples of SMART Goals
- Raise at least $50,000 by December 31, 2020.
- Gain 200 new donors by the year's end.
- Raise total donations by at least 10% over last year.
- Reduce CPDR by 20% compared to the previous year.
Even when you set realistic goals, you won't always reach them. The real value of SMART goals is to provide you with focus and something concrete upon which you can focus. It's important to carefully look over your results when the deadline for a goal passes. The end of the year provides a clear point for doing this. You can look over your results to help you formulate future goals.
Mobilize Your Team
Once you set goals, you need to make sure everyone is on board and knows their role. As a director or manager of a nonprofit, you may be working with volunteers as well as paid staff. Either way, it's essential to have a clear communication strategy so everyone on the team can contribute to your fundraising goals.
- Keep everyone informed using multiple channels. In 2020 in particular, you probably have to rely on alternatives to face-to-face communication. Phone, email, and social media are all useful. It's best to send every important message using at least two channels.
- Share the urgency and reasoning for goals. Don't simply assign tasks. Explain the reason a certain task is so important and why it's crucial to reach deadlines. For example, rather than just saying "Please make at least 100 calls this week," explain how these calls are essential for meeting your year-end goals.
- Make sure everyone is accountable and checks in at regular intervals. This is particularly important when people are likely to be working at home from different locations.
Create a Budget
You need a budget for any fundraising effort. You can use your experience as a guide to estimate costs. However, if you're accustomed to holding live end-of-year fundraisers you'll have to make adjustments if this year it will be online (costs should actually be lower). Expenses you'll need to calculate may include:
- Advertising for a virtual fundraising event or a direct appeal for funds.
- Office expenses.
- Prizes or gifts given to donors.
- Paid staff.
- Any tasks you need to outsource. Examples may include making videos, website design, marketing agencies, etc.
Organize and Clean Up Your Mailing List
An online mailing list is a valuable asset for fundraising. Sending requests to existing contacts is a relatively low-effort and low-cost way to raise money. To get the best possible results, keep your mailing lists well organized and up to date.
- Track email metrics such as open rates and clicks.
- Make sure you have a clear Unsubscribe link in your emails to avoid spam complaints.
- Clean up your list regularly so you reduce your bounce rate. A high bounce rate can make it harder for anyone to receive your messages and could even get you blacklisted as a spammer. Remove invalid emails from your list.
- Send re-engagement emails to subscribers who haven't opened your messages in a while. Remind them why they subscribed in the first place. Invite them to re-engage. Some might do the opposite and unsubscribe but this is another step in cleaning your list.
- Use end-of-year email messages to raise funds directly as well as to alert subscribers about events such as fundraisers. You can tie in these promotions with holiday themes as well.
Direct mail is still a valid way to connect with donors. You can use a similar approach for managing a physical mailing list as a virtual one, though in this case, you don't have to worry about spam complaints. You do, however, want to clean up invalid addresses so you don't waste postage when sending out mailings.
Update Your Website
Your website is one of your most important resources for engaging with donors and attracting new ones. When people land on your website, the impression they get will help to determine their actions. Take a close look at your website and look for any areas where improvements are needed. You may need to make a few tweaks or completely redesign your website.
- Mobile-friendliness. More and more people are accessing the internet using mobile devices. Make sure your website has a responsive design so that it's accessible to visitors using any device.
- Accessibility. Nonprofits, like everyone else, need to be aware of how accessible their websites are for people with disabilities. You may need to make changes such as making your navigation more user-friendly (which is important for all users).
- Page load time. If visitors have to wait too long for pages to load, they are likely to abandon your site.
- Clear call-to-action (CTA). Your pages should contain clearly marked links to donate, sign up for your mailing list, attend your events, or any other actions you want them to take.
- Fix broken links and any other issues.
Social media can play a powerful role in your year-end fundraising efforts. Your social media actions should complement all of your other channels.
- Talk to your followers using the latest features such as Facebook and Instagram Stories. These are good for getting attention and discussing your latest projects.
- Facebook and Instagram ads can be used to promote your end of the year fundraiser.
- Create a Facebook group to discuss your projects and related issues. Don't use the group to directly ask for money but as a source for networking and sharing information. You can, however, mention upcoming events such as fundraisers.
Hold a Virtual Fundraiser
At the end of 2020, live events are not practical in most places. Fortunately, you can raise at least as much money from virtual events. Potentially, you can do even better as you can attract attendees and donors from all over the world.
- Model your online event after your live events as much as possible. You may be able to transfer most activities to an online environment. Think of creative ways to turn in-person activities into virtual ones. For example, you can't hold a live lunch or dinner but you can invite people to prepare meals and eat while attending online. You can even suggest that they dress up.
- Create a landing page for the event on your website. That makes it easy to send potential attendees/donors to the page with email, direct mail, social media, etc.
- Arrange guests such as speakers or entertainers who can broadcast via livestream. The advantage of this is that guests can be anywhere and still participate.
- Plan ways to raise money for the event. People can always donate directly, of course. You may also sell merchandise, or hold a virtual auction.
- Look at what other organizations are doing. For example, Zoomtopia was a successful virtual fundraiser for the World Health Organization and COVID-19 relief efforts. This was a high-profile event that attracted celebrity speakers such as Mark Cuban and Marta Stewart. However, any nonprofit can organize a similar event on a smaller scale.
- Consider a live benefit concert. You can use a platform such as Facebook Live, Instagram Live, or Twitch. As with other virtual presentations, performers can be recruited from any location.
- Create a video of your event. Depending on the length, you may want to edit it down and feature highlights. This video itself can be used to raise money from people who didn't attend the live event.
If you want to attract loyal donors, you need to make them feel appreciated for everything they do. Thanking donors isn't a one-time or occasional responsibility but something you need to do consistently. Remember that any donation a person makes could be their last.
- Be mindful of how you word appeals for donations.
Begin any request thanking donors for past donations. What you want to avoid is any implication that you take their support for granted or that they're obligated to keep donating.
- Provide details about why you need money. This is something to do at end of the year appeals or anytime. Describe some of your plans for the coming year, whether these are new projects or existing ones.
- Give donors gifts. While sending gifts in exchange for donations cuts down a bit on your net gains, they help generate goodwill and increase motivation. You can assume donors aren't primarily donating to receive something in return. However, everyone enjoys getting gifts. Additionally, when you create branded products with your logo on them, it helps promote your organization. Many promotional items such as mugs, tote bags, and t-shirts can be seen far and wide.
- Maintain a positive focus. When asking for donations, it's tempting to go into crisis mode and talk about why you desperately need money. While you shouldn't hesitate to mention problems, balance this out with accomplishments and victories. If the appeal is too negative, donors can get a burnt-out and hopeless feeling that makes them less likely to donate. Donor fatigue Is likely to be an issue during the stressful year of 2020. You can offset this by emphasizing accomplishments and hopeful trends.
End the Year on a Positive Note
The end of the year is a crucial time for a nonprofit. You want to close 2020 in the best possible position so you can begin to focus on your 2021 goals. While this has been a particularly difficult year in many ways, this doesn't mean you can't make a successful fundraising drive. Some strategies, such as virtual events, provide you with the potential to do even better than usual. Whatever activities you plan, get started as soon as possible, and remind donors of the important work you're doing.
Topics: Nonprofit Help
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