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Nonprofit Fundraising Best Practices: Maximize Your Fundraising Efforts

11 min read
November 21, 2022
Neon One Staff
Nonprofit fundraising best practices can help your fundraising campaign thrive.

Fundraising has always been hard. And while the technological innovations of the past 30-odd years have, in some ways, made it easier than ever for nonprofits to connect with donors and supporters, those same innovations have also introduced a whole host of new challenges. Email now sits alongside direct mail, donation forms are replacing traditional checks, and digital events that exponentially increase our reach compete with traditional in-person fundraisers and the power of meeting people face-to-face. 

But as new fundraising methods emerge, so do new best practices. Here are some of the best:

  1. Define goals with data
  2. Understand your target donors  
  3. Build an impactful message
  4. Provide an easy donation experience 
  5. Segment your audiences
  6. Thank your donors

By following these nonprofit fundraising best practices laid out in this article, you and your fundraising team can rest assured that you’re making smart, strategic decisions that will set your organization up for long-term success.

1. Define Financial Goals With Data

Every nonprofit campaign starts with a goal, but that goal is so much more than just raising funds. You need to define more than why you’re raising those funds. Look at how you’ve performed in the past. Here are some questions to ask as you set nonprofit fundraising goals: 

  • Where are you now? What’s your annual revenue? How does that revenue contribute to your cause? 
  • How has past fundraising performed? Comparing the fundraising results by campaign type, target donors, and overall costs helps you define the true ROI of any campaign. 
  • Where do you hope to be? Using the data from past fundraising results, ask yourself what the best-case scenario is based on a similar response. 
  • How will this fundraiser further your future goals? The benefits of fundraisers don’t have to be financial. You can also pull in future volunteers, peer-to-peer partners, and cause ambassadors. Keep those non-financial benefits in mind. 

Your past will help define your future. But it won’t do so alone. You should also take a look at the current landscape for your nonprofit, your cause, and your community. Are there any factors, like a recent economic downturn or a new corporate office opening in your area, that would impact your campaign?

Using the answers to these questions, set specific financial (and non-financial) goals for your campaigns. What is the number you’re trying to hit? How many new donors do you want to bring in, and how many current donors do you want to increase their giving? What is your timeframe, and how many large, medium, and small donors will you need to contribute in order to hit your goal? 

By using all available data to set S.M.A.R.T (Specific, Measurable, Achievable, Relevant, Timely) goals for your next fundraising campaign, you will set yourself up for success. To learn more about nonprofit goal-setting, check out the article below:

2. Understand Your Target Donors

“Supporter A has donated $50 to a fundraiser.” Beyond a single dollar figure, that sentence doesn’t tell us a lot about the donor in question. But, for many nonprofits, that’s the extent of their data gathering.

In order to retain that donor and build an ongoing relationship with them, you need more information. By capturing all supporter activities and contacts, you can begin to understand that person and personalize your interactions with them accordingly.

Here’s a more in-depth description of that same donor:

“Ed donated $50 to a teacher’s association fundraiser for a coding boot camp for kids in the past. He registered his daughter, Kaylee, for a summer code-a-thon and got people at his workplace to sponsor her. He has responded “maybe” to a social media invite for a picnic to support gender diversity in STEM programs but has not yet signed up.”

All these activities can be captured with the right tools, and together they give you a more complete picture of who Ed is as a person. Based on the above activities in the member database, you know:

  • He’s a father
  • He’s a feminist and likely to support women’s causes
  • He’s specifically interested in STEM-related events
  • Family-focused activities are also a good prospect
  • He is very close to signing up for the picnic but may need more information

With this information, you can tailor your message to Ed in a way that makes a genuine and powerful impact. The best way to store and analyze supporter information is by using a nonprofit database. And if you choose a system like Neon CRM, you’ll also get a suite of powerful tools that go way beyond a simple database—features like donation page and email builders, events and volunteer management, and workflow automation.  

If you’d like to learn more about Neon CRM, sign up for one of our free group demos. These regularly scheduled 30-minute sessions provide you with a broad overview of the system’s capabilities—with zero pressure to buy. Sign up for a group demo below.

3. Build an Impactful Message

Impactful messages leverage what you know about the donor—and people in general—to encourage future giving. There’s a psychological phenomenon called the Ben Franklin effect, which states that doing favors for someone makes people like that person even more! They associate them with a positive feeling that they want to feel again. 

The Ben Franklin effect is just one of the psychological phenomena that you can leverage when crafting your communications. By reminding donors of their impact on your organization, you’re far more likely to receive a response. Compare the two emails below to see the impact for yourself.

With the right tools and information, it is just as easy to send the second email as it is the first, but the second is far more effective. Not only is the second email personalized but also frames the donor’s past support in a way that makes them more likely to give in the future.

Want to learn about some other psychological phenomena that you can use to boost your fundraising campaigns? Check out this article!

4. Provide an Easy Donation Experience

In the examples above, we also demonstrate what an easy experience looks like. The customized message included two colorful, clearly defined calls to action in their picnic fundraiser. The supporters could easily see where they should go to register for the picnic. It was as easy as clicking a button. 

Meanwhile, in the generic emails, the link to give is hidden as a hyperlink. Someone who has poor vision, or is color blind, might not be able to see it easily. That frustration with the technology can translate to frustration with the nonprofit—which doesn’t encourage giving. 

But creating an easy donation experience doesn’t end with an email. One of the most important parts of that experience, in fact, is the donation form itself. If your donation form doesn’t follow accessibility principles, asks for too much unnecessary information, or performs poorly on mobile devices, you could very easily lose someone who was ready to give just moments before.

Crafting a good donation form is critical, and that’s why Neon CRM’s donation forms come with best practices already built in. You can learn more about those best practices—and how Neon One makes it easy for nonprofits to create dynamic, branded forms—in the article below.

5. Segment Your Audiences

Different types of donors and supporters respond to different kinds of messages. Small donors respond to different messages than large donors, for instance. A donor who attends a ticketed event might be miffed if, the very next morning, they receive an email from the same organization asking them to donate.

Frustration can also stem from the emails and messages you send if you haven’t properly segmented your audiences. By creating different segments within your donors, supporters, and clients, you can ensure that the messages they receive are tailor-made to their interests and activities.

Let’s return to Ed, the proud father of a young girl interested in STEM.

The nonprofit may have other programs it supports, but are they ones that Ed would care about? The number one reason people give to organizations is that they believe in the cause. The cause Ed believes in is women in STEM. Would it then make sense to send him fundraising emails to help agriculture students to study irrigation or English students attend a writer’s convention? 

While asking once may be fine (and will help the nonprofit better understand Ed), asking him repeatedly would frustrate him, and possibly cause him to disengage with the nonprofit altogether.

6. Thank Your Donors and Reinforce Their Impact

Saying thank you is important. But how important is it? Not being thanked for a first donation is one of the top reasons people give why they never made a second one. So if you don’t have a system in place to make sure all donors get thanked for their donations, make putting one in place a top priority.

Saying thank you is about more than just attaching a few sentences to a donation receipt. While adding a brief thank you message on a receipt is good practice, you should always make sure to send a second, standalone thank you within 72 hours of the donation being made. 

There are several ways that you can thank donors. Email is the cheapest option and the easiest to automate, which ensures that none of your donors fall through the cracks. Direct mail, on the other hand, is more expensive, but it allows you to make more of an impression and stands a better chance of being read. Meanwhile, thanking donors by phone is a great option that too many organizations forget about! 

There are plenty of other do’s and don’ts that go into writing a great thank-you letter. If you want to learn how—and you’d like a handy dandy letter template to get you started—you can find everything you need in our article below:

Managing Your Fundraising With the Right Nonprofit CRM

Nonprofit fundraising best practices all came back to one central question—how well do you know your supporters? When you keep track of your interactions, you can better define your goals as you build relationships with your constituents. And in order to track, store, and analyze all that data, you’re going to need a powerful nonprofit CRM like Neon CRM.

Neon CRM is a comprehensive platform that allows you to manage your donors, members, email, events, fundraising, volunteers, and grants all in one place. Our easy-to-use system allows you to create a better, more personalized experience for your supporters while saving your team from time-consuming manual tasks. 

To see how Neon CRM’s relationship-focused approach to donor management can help your organization grow, request a demo today! 

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