Fundraising Basics: The Beginner’s Guide for Nonprofits

Getting started with nonprofit fundraising can be a thrilling journey. To succeed, it’s important to grasp the basics of three strategies: email fundraising, direct mail fundraising, and fundraising events. These proven strategies will lay a strong foundation for your organization and pave the way for future growth.

Goal Setting as a Foundational Fundraising Basic 

Any fundraising campaign should start with realistic goal setting. The goals you set will help you plan the rest of your campaign: The  channels you use for appeals, decisions about your event, and even the types of stories you’ll tell your donors will hinge on the goals you’ve set for your campaign. 

To set effective goals, use the S.M.A.R.T acronym to guide your team through setting the right objectives for your fundraiser. S.M.A.R.T. goals are:

• Specific: Make your fundraising goal clear and well-defined, whether it’s a specific fundraising amount, a target number of donors, or achieving a particular outcome or impact.
• Measurable: Ensure your goal is measurable to track progress and success. This might include reaching a certain fundraising amount or achieving specific metrics like email open rates or donation page conversions.
• Attainable: Set a challenging yet realistic fundraising goal that pushes your limits but is still achievable, using data and research to guide you to the right amount. 
• Relevant: Connect your fundraising goal to your purpose by explicitly stating how the funds will be used and the impact it will make, helping donors understand the importance of their contributions.
• Timely: Set a deadline for your fundraising campaign to create a sense of urgency and motivate donors to act.

You’ll see that we noted a few non-financial goals in our examples. While the goal of fundraising is in the name—to raise funds—it’s also about increasing your reach and support for the next campaign. Be sure to include a few engagement and growth goals for your organization. 

For more information on setting fundraising goals, please see our resource, How Nonprofits Can Set (And Meet) Fundraising Goals. 

The Three Pillars of Effective Fundraising

All organizations must master three fundraising basics to keep donations coming in. Direct mail, emails, and events will make up the foundation of your fundraising campaigns. 

Direct Mail	Email	Events
In one 2022 study, traditional direct mail sent in a letter-sized envelope resulted in a 112% ROI.	The average nonprofit has a 28.59% email open rate, while small organizations report open rates as high as 45.7%.	In 2022, over 50% of nonprofit executives surveyed reported that events accounted for 21% or more of their annual operating budget.

Email Fundraising Best Practices for Every Organization 

Email is a cornerstone of nonprofit fundraising because it’s low cost, effective, and relatively easy to manage. Here are some best practices to start your email campaign.  

Clean and Segment Your Data 

Email fundraising strategies often rely on email lists that use your donor database as a source. Typically, you’ll use one of two platforms to manage your campaign: You’ll either use email tools built directly into your nonprofit’s CRM, or you’ll sync your donors’ data to a standalone email platform. Regardless of the platform you use, your data should be well-organized and accurate. Ensure you have up-to-date emails on file for your donors and make sure to eliminate any duplicate records. Sending the same donor a fundraising email five times in a row will do more to frustrate them than garner their support! 

Once your data is clean, you’ll also want to segment it. That means breaking down your donors into different types and assigning them to different email lists you’ll use to adapt your messaging.

For example, say you run an environmental nonprofit. One side of your mission focuses on restoring parks and beaches for future generations. The other focuses on scientific research.  

You have two donors. One, Michelle, attends many of your events to raise funds for research. Meanwhile, your other donor, John, is passionate about wildlife conservation and often volunteers his time to help with habitat restoration projects. Michelle might go into a donor group of individuals interested in funding research. Meanwhile, John would go into another group for those more focused on habitat restoration. Then, you can tailor your messages to those individuals. 

Write a Compelling, Positive Message

A good email fundraising message ties donors’ contributions to a measurable impact, addresses the donor by name, and conveys a positive emotion. Our research found that messages that convey relief, gratitude, pride, excitement, or optimism have open rates of 37% or higher. 

You’ll also want to tailor your message to communicate specific impacts to specific donors. This is where the donor segmentation from earlier comes into play. You create different email messages based on your donor segments and use those messages to speak directly to what those donors care about and how they’ve supported your nonprofit in the past. 

In the segmentation example above, we introduced two donors. There’s Michelle, who is interested in environmental research. There is also John, who is more focused on restoration. These two email messages are adapted to speak to these two individuals in a way that resonates most with them: 

Dear Michelle,  When the city commission approved a new housing development on Lake Bonny Ridge, the scientists at Agloe Nature Center sprang into action. That site—future home of 250 new houses—is one of the few remaining habitats for many of our treasured endangered plant species. Now, we’re in a race against time as we search for ways to save these plant populations for future generations. You can help! Our plan is twofold: We’re working on relocating existing plant colonies, and we’ve accelerated our research into propagation methods that will shore up declining numbers of plants. But we need the support of conservationists like you to support this research. Will you help keep these endangered species alive? When you donate to the Nature Center, your gift will go directly to funding research that will preserve these plants. Your generosity will do more than keep a few plant populations safe from developers—it will preserve our state’s endangered species for the future. You can donate to this important project by clicking here. Thank you so much for your passion for our local ecosystems—we appreciate your support more than you know!

Hi John,  When the city commission approved a new housing development on Lake Bonny Ridge, the scientists at Agloe Nature Center sprang into action. That site—future home of 250 new houses—is one of the few remaining habitats for many of our treasured endangered plant species. Now, we’re in a race against time as we work to restore other parts of the Ridge by relocating plant colonies that will be destroyed by construction. You can help! Restoration of other parts of the Ridge will give these endangered plant colonies a home—but we need the support of conservationists like you to support this project. Will you help keep these endangered species alive? When you donate to the Nature Center, your gift will go directly to restoring habitats on the Ridge and relocation of a handful of plants. Your generosity will do more than keep a few plant populations safe from developers—it will preserve our state’s endangered species for the future. You can donate to this important project by clicking here. Thank you so much for your passion for our local ecosystems—we appreciate your support more than you know!

These are both emails for the same fundraising campaign, but the messages are adapted to what resonates most for the reader. This is made possible by the segmentation efforts in the prior step. You can use this tactic to create different email segments and email messages that speak directly to your donors. 

Make It Easy to Donate

More goes into a successful email appeal than great copy that speaks to your donors. It’s easy to get lost in writing an email fundraising appeal and overlooking the message’s format. You want your email to be user-friendly and easy to read. Simple design choices, like great images, easy-to-read copy, and scannable formatting can all make it easier for donors to read your appeal and make the decision to give. A large “donate now” button allows your donors to send contributions easily when they’re inspired by your appeal. 

With email segmentation, you can adapt your appeal based on how much they’re likely to give. Say that Michelle always gave $25 or $50 in the past; meanwhile, John gave between $100 and $200. An email appeal to Michelle might ask for a gift of $50. Meanwhile, the message sent  to John could ask for $150. By adapting the amount you ask for in different emails, you can comfortably ask for larger gifts from your larger donors without intimidating donors who tend to give less. 

Adding a Personal Touch with Direct Mail Appeals 

Many nonprofit leaders tend to see direct mail and email as either/or options, but they can actually complement each other quite well. Not all donors feel comfortable giving through email; direct mail can help establish trust and credibility to put them at ease. Others may love receiving direct mail—and may even be more likely to read and react to a tangible letter than an email—but prefer to give online. Using both communication channels at the same time increases the chances of reaching your supporters and inspiring them to give.

When it comes to the message itself, many best practices apply to both direct mail and email. Using segmentation to send targeted, relevant appeals is still an effective tactic. Giving people an easy way to give—whether they want to send a check through the mail or go online to give—remains important. Elements like good design, personalized salutations, and impact statements will contribute to your campaign’s success. However, with direct mail, you have a physical, tangible object to work with. Here are some tips.

To grab attention and avoid being dismissed as junk mail, get creative with your envelope. Use eye-catching graphics, intriguing teasers, or compelling taglines. You could also consider using oversized, colored, or textured envelopes to make your mail stand out. Adding a personal touch like a handwritten note or signature can make your direct mail feel more engaging and authentic.

Creating email and direct mail appeals that complement each other can feel tricky. But, by combining the power of direct mail and email, you can create a well-rounded fundraising strategy that appeals to different donor preferences and increases your campaign’s impact.

Celebrate Your Donors with Events 

Fundraising events aren’t just an opportunity to engage donors—they can also grow your relationships. Balancing the goal of connecting with supporters and deepening your relationship with them with the goal of raising money for your work is a big undertaking, but it’s absolutely doable! Here are some best practices for holding events that build a sense of community.

• Personalize the invitation: Attendees might be more likely to come if the invitations are personalized, mentioning their prior contributions, addressing them by name, and highlighting why the event would interest them. 
• Engage with storytelling: The theme for your event should tell a story. For example, say our environmental nonprofit is holding a picnic. Some storytelling themes might include “Community Conservation” to highlight local heroes or scientists or “Sustainable Pathways,” where they focus on showing supporters how environmental restoration can have far-reaching effects.
• Offer unique experiences to your donors: Giving your supporters an outstanding experience—especially if that experience is directly related to your work—will make them more likely to think fondly of your organization and increase the likelihood that they stay engaged with you long term. Our environmental nonprofit, for example, may plan a picnic in a newly-restored ecosystem, give a demonstration of propagation techniques, or organize a plant-spotting scavenger hunt.
• Make it easy to donate: Are you sensing a theme? Just as you’ve made it easy for people to donate after reading a direct mail or email appeal, give your event attendees a simple way to give if they’re inspired by your event. Our environmental nonprofit, for example, may want to include QR codes that point to their online donation form on event materials, give people a way to donate by check or with cash, and send donation information in follow-up materials.
• Complete post-event follow-up: Maintain your event’s momentum by sending personalized thank-you messages and sharing event highlights and impact updates to people who attended your event.

Even small events can be significant undertakings, so keeping an eye on budgets, costs, and donations is always critical. Otherwise, you could create an unsustainable event that doesn’t raise enough to offset costs. Of course, metric tracking is also essential for your email and direct mail campaigns—let’s take a look at some metrics you may want to track. 

Monitor Results and Improve 

Monitoring results is one of the essential fundraising basics for any nonprofit leader. By watching how your campaigns perform over time, you can adapt and improve your fundraising tactics. To do that, you’ll need to know what to track. Here are some metrics for direct mail, email, and event fundraising campaigns to monitor over time. 

Direct Mail
Response Rate: This tells you how many individuals responded to your direct mail appeal, whether it was a yes or no. This is an especially good metric to track for direct mail campaigns that give readers multiple ways to get involved: A response could be something like making a donation, signing up to volunteer, etc. # of responses / # of mail pieces sent, expressed as a %
Donation Conversion Rate: This will tell you the number of donations you got compared to your responses. If you’ve included a QR code or instructions for giving online, remember to count those gifts in addition to donations sent through the mail! # of donations / # of responses, expressed as a %
Cost per Donor: This will tell you how expensive your campaign is in relation to  the number of donors you bring in.   Total campaign costs / # of donors
Return on Investment: This will give you insight into how the cost of your direct mail campaign relates to how much you’ve raised. You’re looking to get a good return on investment! Total campaign contributions / amount you spent on your campaign

Email
Open Rate: This will tell you if your subject line is compelling your donors to open your message. # of emails opened / # of emails sent, expressed as a %
Click-Through Rate: This tells you how many individuals clicked on a link in your email, including your “donate” button.  # of clicks / # of emails sent, expressed as a %
Unsubscribe Rate: This tells you about individuals who leave your email database during a campaign. # of unsubscribes / # of emails delivered, expressed as a %
Amount Raised per Contact: This tells you how much you raised per person on an email list. Amount raised / # of contacts on your list

Events
RSVP Rate: The percentage of invited individuals who responded with an RSVP, indicating their intention to attend the event. # of RSVPs / # of invitations sent, expressed as a %
Attendance Rate: This compares how many invitations you sent, versus how many people attended. # of attendees / # of invitations sent, expressed as a %
Return on Investment (ROI): This critical metric will tell you if an event was worth it!  (Donations – Event Costs) / Event Costs, expressed as a %

You can, of course, calculate these methods by hand. But the best method for tracking metrics is through a Constituent Relationship Management platform (CRM). With a CRM, you can quickly access key information during or after a campaign, allowing you to adjust your tactics as needed.

For example, if you observe a high email open rate but a low click-through rate (CTR), you may need to update your messaging or make your donate button more prominent. Similarly, if you have a high number of RSVPs but a low number of actual attendees, you may want to investigate the reasons that prevented people from attending the event.

The metrics you gather from your CRM will provide insights into the effectiveness of your fundraising efforts and guide you in making necessary adjustments.

Using Neon CRM to Support Your Fundraising Efforts 

Mastering theo fundraising basics, absorbing knowledge about best practices, and achieving regular growth will all come from experience. Each email campaign, direct mail appeal, or fundraising event you undertake provides valuable insights into what motivates your donors to give. By leveraging a CRM, you can capture and analyze these valuable insights, empowering your organization to evolve and improve.

Neon CRM can help your organization grow beyond fundraising basics with a tool that allows you to improve campaigns through data-driven decision-making. Contact us for a demo.