This chapter lays out several key principles that apply to all fundraising: why do fundraising, where the money should come from, why people give to nonprofits, and who can raise funds.

Let’s start with a question: What does an organization want from fundraising? Although you may think the answer is money, it’s not; it’s donors. Not donations, but donors; not gifts, but givers. We do fundraising in order to build relationships with a broad cross-section of people who will do some or all of the following for our organization: give money themselves, ask others to give, open doors to institutional giving, volunteer, say nice things about our organization, and so on. You want people to make donations and to feel so good about how they were treated and what you did with the money they gave that they want to give again and again.

Focusing on building a donor base rather than on simply raising money means that sometimes you will undertake a fundraising strategy that does not raise money in the first year, such as direct mail, or that may not raise money for several years, such as legacy giving. It means that you will relate to your donors as individual human beings rather than as ATMs whom you engage when you want money but whom you otherwise ignore. It means you will plan your fundraising for both the short term and the long term and look at the results of any fundraising strategy not only for the next month but also for the next few years.

FOCUS ON DIVERSIFYING DONORS

Focusing on attracting and keeping donors means that an organization must diversify its sources of funding to be interesting to the widest possible spectrum of potential supporters—that is, receiving money from a variety of individuals who give at varying amounts. Diversifying means that your organization is not overly dependent on any one person, source, or strategy. There is no exact percentage for this, but you need to be able to lose any donor, any funder, or have any strategy go terribly wrong and still be able to function. This is a basic rule of economics, sales, investing: any endeavor that relies on volume for success. Diversifying also means an organization has to increase the number of people helping to raise money, and diversify these people’s skills. The need for diversity is not a new lesson. People with only one skill have a more difficult time finding employment than those with a variety of skills. Investors put their money in a variety of financial instruments. Thousands of organizations have had to cut back or even close because they relied too heavily on one or two foundations or one government contract as their main source of funding.

Yet many organizations continue to look for the ideal special event or extraordinary crowdfunding idea that will bring in their entire budget, or they search for one person, foundation, or corporation that will give most of the money they need, or they try to hire the perfect fundraiser who will bring in all their income without the help of anyone else in the organization. These organizations reason that if they could use one fundraising strategy that was absolutely certain, tried and true, or hire the one fundraising staff person who could do it all, their money worries would be over. Unfortunately, no fundraising strategy or person fits that description. In fact, only if it maintains a diversity of sources will an organization survive for the long term.

Here’s what diversity looks like: Organizations aim to have no more than 30 percent of their funding come from any one source for more than one or two years. An organization could lose 30 percent of its funding and probably survive, although it would be difficult, but to lose more than 30 percent of one year’s funding would be catastrophic unless you had a very large reserve fund for just such contingencies. This guideline about diversifying sources of income means that, although you could have more than 30 percent of income coming from individuals (and many nonprofits do), you cannot have one donor providing 30 percent of this money. The IRS recognizes this principle with its “one-third rule,” which states that an organization with one-third or more of its total income from one person, foundation, or corporation for more than three years does not meet the test of a public charity; if this condition persists for several years, an organization risks losing its 501(c)(3) status. Public charities are to be supported by a broad swath of the public and not to be hobbies of one or two people while operating with the tax advantages of public charities.

There is no set number of sources that constitutes healthy diversity. Much will depend on the size of your budget as well as on your location, your work, and your fundraising philosophy. However, for organizations that seek to raise a significant amount of money from individuals, clearly, the more people who give you money, and the more ways you have of raising that money, the better off you are.

APPEAL TO PEOPLE WHO GIVE

To build that broad base of donors, it’s useful to understand what motivates people to give. As I noted in Chapter One, about 70 percent of adults in the United States regularly make donations to nonprofits, with most of those people supporting between five and fifteen organizations. Fundraising efforts should therefore go toward trying to become one of the organizations that these givers choose. Do not spend a lot of effort trying to be the first organization that someone who is not a giver gives to, unless you have a particular program reaching out to young donors who may be new to giving.

In general, people who don’t give away money are unlikely to change this habit: it is not that they just haven’t found the right NGO yet, it is that they are not givers. People who give money are going to give it away. They will give it to your organization or to another organization, and they are not denying food for their family or shoes for their children when they do so. Your organization’s job is to become one of the nonprofits they support. To do that you first must examine what makes a person a giver, and while you are reading this, think about what makes you a giver, assuming that you are part of the majority of people around the world who give away money.

WHY PEOPLE GIVE

There are many reasons that people give to nonprofit organizations, but study after study shows that the most common reason a person makes a donation to a particular nonprofit is because he or she was asked. People are more likely to remember how they were asked than the name of the organization to which they gave. Of course, responding to being asked is usually accompanied by other motives, varying from a straight transaction to tradition to deeply held belief. Some people give, for example, because they like the organization’s newsletter or because they will receive a free tote bag, bumper sticker, or some other tangible item. Some give to a certain organization because everyone in their social circle gives to that group or because it is a family tradition. Some give because it is the only way to get something the organization offers (classes, discounted theater seats, access to a swimming pool).

At a more altruistic level, there are more reasons for giving. People give because they care about the issue and because they believe the organization’s analysis of a problem and vision of a solution are correct. Often people give because they or someone they know were once in the position of the people the agency serves (alcoholics, abused women or children, unemployed, homeless) or because they are thankful that neither they nor anyone they know is in that position.

Sometimes people give because they feel guilty about how much they have or what they have done in their own lives, or in order to feel more assured of forgiveness.

People give because the nonprofit expresses their own ideals and enables them to reinforce their image of themselves as a principled and generous person—for example, “I am a feminist, environmentalist, pacifist, equal rights advocate, good parent, concerned citizen,” or whatever values are important to them. Through their giving, they can say in truth: “I am a caring person,” “I have deep feelings for others,” “I am helping others.”

When people are asked personally by a friend or someone they admire to give to a particular organization, in addition to feeling good about giving to the organization, they show themselves as kind and open-hearted to someone whose opinion they value.

Although these motivations for giving are what impel most people to give, they are not the motivations that most nonprofit organizations appeal to. Instead, they focus on two other reasons they think will motivate people to give but that are not very persuasive: “We need the money” and “Your gift is tax deductible.” Neither of these reasons distinguishes your organization from all the others. All nonprofit organizations claim to need money, and most of them do. The fact that the gift is tax deductible is a nice touch, but gifts to more than one million other nonprofits are tax deductible, too, and because most Americans do not itemize their donations on their tax forms, they actually receive no tax benefits for their giving. Neither need nor tax advantage makes your organization special or particularly worthy of a gift. As the great fundraiser Kay Sprinkel Grace says, “People don’t give because we have needs; they give because we meet needs.”

People who give away money pay nonprofits to do work that can only be accomplished by group effort. There is very little one person can do about racism or pollution or world hunger. There are few services, such as child care, after-school enrichment, or health care, that a single person can offer. Only as part of an organization can an individual make a difference in these or any other pressing social problems. Certainly, one person cannot be a theater or a museum or an alternative school—but many people can be entertained or educated by these organizations. Donors need the organization as much as the organization needs the donors, and the money is given in exchange for work performed.

ASKING PEOPLE TO GIVE IS EASY TO LEARN

A most important lesson for all organizations, particularly smaller ones, is that fundraising is easy to learn. Since I started in fundraising, there has been an increasing emphasis on fundraising as a “discipline.” Colleges and universities offer courses on various aspects of fundraising, sometimes as part of degree programs in nonprofit management, and professional organizations offer fundraising certification programs. More and more people are “professional” fundraisers. All of these developments contribute to the health and well-being of the nonprofit sector. But a course, a degree, or certification is not required for a person to be good at fundraising, and they will never take the place of the only three things you really need to be a successful fundraiser: common sense, commitment to a cause, and a basic affection for people.

No one says at the age of twelve: “When I grow up, I want to be in fundraising.” Instead, a person is drawn to an idea or cause and to an organization working on that issue. The organization needs money in order to pursue the cause, so the person decides to help with fundraising even though it is not her first choice of how to be involved and even though she initially has found the idea of raising money slightly distasteful or a little frightening. With time and experience, many people find that fundraising is not as difficult as they had imagined; and many others even begin to like it. They realize that people feel good about themselves when they give money to a cause they believe in and that to ask someone for money actually gives that person an opportunity to express traditions or beliefs that are important to him or her.

People asked to raise money often project the distaste they may feel about asking for money and assume that those being asked feel the same about giving money. In fact, there is a significant difference between the two. Rarely do people feel good when they ask for money until they get used to it, but people almost always feel good about giving money. In asking situations, potential donors are more than likely flattered, pleased to be included, and thinking about what amount they could give.

The feelings of discomfort in asking for money are normal; in Chapter Eight I talk about them and how to deal with them. For now, be clear that asking and giving are two very different experiences, even when they happen in the same conversation. When people are recruited to ask for money, they must reflect on what they like about giving, not on what they hate about asking.

When an organization has a diverse number of ways to raise money, it can use the talents and abilities of all the people in the group to help with fundraising. As volunteers and board members learn more about fundraising and experience success doing it, they will be willing to learn new strategies and will begin to like asking for money. Further, an organization that has only one or two people raising its funding is not much better off than an organization that has only one or two sources of money. Many small organizations have suffered more from having too few people doing the fundraising than from having too few sources of funds. In the chapters that follow, I discuss how to identify appropriate fundraising strategies and how to build a team of volunteer fundraisers.