Funding Sources for Nonprofits: Show Me the Money

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    This is a companion piece to my article “Anticipation – Year End Fundraising – Let’s Look in the Crystal Ball and Beyond” published on my blog, That article takes a look at the funding sources so far in 2011 as reported in three surveys. The results give us a look into the crystal ball to see what we might expect from fundraising for the remainder of 2011. The survey completed by the Nonprofit Research Collaborative is quite extensive and has lots of insight from nonprofits about what is working in their fundraising efforts. This article shares some of the highlights from that report about what nonprofits see as working for them. And, as always, it comes with my commentary. So where to look if you are in a Jerry Maguire mood for someone to “Show Me the Money.” Let’s see what 813 charities who participated in this survey had to say.


    In open-ended responses, people overwhelmingly listed fundraising from individuals as the best opportunity for growth in contributions. Frequent methods for increasing contributions mentioned were

    20% major gifts

    18% events

    14% online/social media

    Major gifts were said to be the most time-efficient way to do fundraising. Hmmm…. That’s interesting…more small nonprofits should try this avenue.

    Respondents noted that a big benefit of email is that when people can make a donation immediately some will do it right away. Nothing beats that. We all know what happens with snail mail…in the pile for future attention.

    The big surprise for me was the enthusiastic response to events. Nearly half the nonprofits reported that they had increased income due to events. Many nonprofits seem to be experimenting with lower-cost events than the traditional gala and attracting a wider base of attendees.

    As income from government and foundations has decreased, there clearly is a stepped-up effort to reach out to individuals – and it seems to pay off for nonprofits who invest in it.

    Here is something to consider – 39% of charities with $250,000 to $1 million in expenditures were increasing the level of effort of volunteers organizing fundraising events. Activating volunteers – now that can be a very cost-effective approach. But they usually need staff support so don’t plan on this being a freebie.

    Nonprofits are taking a hard look at where is the best place to invest their limited or increased time in fundraising. Where are nonprofits choosing to increase their investment in fundraising?

    Percentage of charities that said they were increasing their investment in a fundraising method:

    46% Corporations

    36% Foundations

    31% Major Gifts

    30% Email

    30% Social Media

    25% Direct Mail

    24% Planned Giving

    23% Special Events

    12% Congregations

    Interestingly, where nonprofits are increasing their investment and where they think there is the best opportunity to raise more funds this year don’t necessarily agree.

    Percentage of charities mentioning a fundraising method as the best opportunity for raising more funds in 2011: (Responding charities could list any methods in this open-ended question)

    20% Individual giving/annual giving

    20% Major gifts

    18% Special events

    15% Foundation grants

    14% Online donations/social media

    12% Corporate giving

    10% Face‐to‐face (personal asks)

    8% Planned gifts

    7% Direct mail campaigns

    4% of Board members

    1% Government grants

    This last piece of data is very telling and provides an honest assessment of the fundraising climate right now. Don’t waste your valuable and limited resources going after government funding.

    Everyone thinks that Board members should step up more. It is commonly done generously in large organizations but it is a different story in small organizations. If your Board has retired people, stretched small business owners, and people who are currently unemployed it is not reasonable to expect them to do too much “stepping up” in their giving. Direct mail is still the lifeblood of individual giving for many organizations but it is not the future. This isn’t a good investment for increasing resources either.

    So what is? Individual giving provides the largest opportunity for growth. But be creative in seeking it. Lower-cost events without a large lead time commitment, increasing awareness through social media, volunteer face-to-face fundraising, and encouraging monthly giving seem to be attractive choices.

    Although overall foundation giving is down, nonprofits are researching and finding smaller, more locally focused foundations and developing new footholds there. Worth a try.

    I wish all nonprofits a successful fundraising season. Be thoughtful, be smart, and don’t give up.


    For more resources, see our Library topic Nonprofit Capacity Building.