5. Lay the Groundwork for Fundraising
One of the many appealing aspects of online fundraising is its speed. You can set up a widget or a page on a social fundraising website and start collecting donations literally within minutes. That’s a big advantage in cases of immediate need—raising money for an emergency vet bill, for example, or a family who lost all their belongings in a fire.
Nonprofits, however, need to be careful not to get ahead of themselves. Fundraising, whether online or offline, should be part of a well-thought-out plan that directly aligns with your organization’s mission and goals.
Are You Ready to Fundraise?
It’s not unheard-of for a small nonprofit to look around at all the big guys online and decide that—if that’s the latest and greatest way to make money—they want to be a part of it too. They add a PayPal Donate button (see Chapter 2) or sign up with Network for Good to process payments, and then...well, nothing much happens. So maybe online fundraising isn’t all it’s cracked up to be?
Not exactly.
In those situations, it’s a good bet that the organizations started fundraising online before they had laid the proper groundwork. And as nonprofit experts are fond of saying, online fundraising is not a case of “if you build it, they will come.”
Section 501(c)(3) of the Internal Revenue Code grants tax exemptions to “corporations organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports, or prevention of cruelty for children or animals.” This status gives tax breaks not only to the organizations, but also to their supporters, whose donations are tax-deductible.
Before we move on to online considerations, ask yourself these questions to assess whether your organization is ready for any type of fundraising yet:
• Do you have legal permission to fundraise? Check with your state Attorney General’s Office and your local authorities for requirements, and see Chapter 6 for more information on legal matters.
• Does your organization have 501(c)(3) status (see Note) or a fiscal sponsor so you can solicit tax-exempt donations?
• Do you have a clear mission statement?
• Do you have a strong case statement that answers these key questions: Why should someone give to your organization? Why is your cause important? What is your timeline? (See the sidebar for a sample case statement.)
• Do you have a budget detailing your income and expenses? (See Table 5.1 for a sample budget.)
Table 5.1. Sample Budget Template
• Have you explored partnerships with local businesses, corporations, and government programs?
• Do you have a fundraising plan mapping out one-year goals? Five-year goals?
• Do you have a core group of supporters who will actively fundraise for you?
• Do you have a database or other method of tracking donors?
• Do you have the people and technology you need to get your donations into the bank and to thank your donors promptly?
• Do you have a communication plan for your donors (newsletters, annual report, holiday cards, progress updates)?
Industry Insider: A Sample Fundraising Case Statement
1. What is your organization’s mission statement? It needs to be short, concise, and compelling.
2. What problem does your organization address? (Feed the hungry, help the sick, house homeless animals, protect the environment, etc.)
3. How many people are affected by this problem in the area you serve?
4. Briefly describe your organization’s history.
5. What success has your organization had in addressing the problem?
6. What success stories can you tell about the people you’ve helped?
7. What need are you raising money for?
8. What is the fundraising goal for this need?
9. How will the donor’s gift affect the need?
10. What makes the need urgent? (Why should the donor give now?)
The following table shares a simple version of Sandy Rees’s fundraising budget template. If you prefer more detail, break down each category by month.
Making the Move to Online Fundraising
That’s a long to-do list, and it’s understandable if it feels overwhelming. But that’s the reality of running a nonprofit. Fundraising may be a straightforward goal, but it’s a complex effort that requires financial skills, persuasion skills, committed personnel, technological know-how, and spot-on communications.
If you remain undaunted, it’s time to assess the next phase of fundraising readiness: knowing when to move online. You’ll want to have the tasks above well in hand, because those are some of the items that will help shape your all-important website.
As for your website, here are a couple of tasks to do from an organizational standpoint:
Decide who’s in charge. The person who manages your website (we’re guessing it’s you) will have to commit to updating it every month or so to give visitors a reason to keep coming back. If you don’t have the skills, delegate to a friend or a volunteer or a staffer, if you have one. Be sure they know it’s a must-do, not a nice-to-do. Remember, your website is the most important piece of your online fundraising strategy, so treat it as a true priority.
Invest in the right tools (and budget accordingly). It’s absolutely essential that online donors receive an automated email confirmation of their gift as soon as it goes through—be sure your payment processor offers that feature. You also might need donor management software, or an email marketing service to send newsletters. Costs can vary widely, so do some research and get recommendations from other organizations your size. You might find it worth the money to pay someone to do the initial setup of your website, a cost that can run from the hundreds into the thousands of dollars, depending on features.
The Nonprofit Technology Network (NTEN) and Idealware, a nonprofit that researches software for other nonprofits, compared 29 donor management systems that cost $4,000 or less in the first year. Their report, “A Consumers Guide to Low Cost Donor Management Systems,” is available free at www.nten.org/research/2011-dms.
Planning an Online Fundraising Campaign
Now that you have all the pieces in place, it’s time to get down to business and outline your fundraising plan, which will be a mix of online and offline activities. We talked about the elements of an effective website in Chapter 4, but it bears repeating: Tell emotionally moving stories that show people how their money will make an impact. Make it easy for supporters to donate, volunteer, or sign up for your newsletter. If you have a blog, Facebook page, or Twitter account, link to those, too. In turn, you can use Facebook and Twitter to drive traffic back to your website. Include your mailing address and phone number on every Web page.
Your fundraising plan should also include:
Email newsletters. Every month and a half or so, send a newsletter to donors and prospects. Build your email list through sign-ups on your website, collecting email addresses at events, and asking for them over the phone. We’ll talk more about newsletter content in Chapter 7.
Integrating online and offline efforts. Drive traffic to your website by putting your Web address on your business cards, direct mail pieces, brochures—any materials you produce. Send an email in advance of a mailing to tell supporters it’s on the way, and offer the option of donating directly from the email.
Special campaigns. Plan a December fundraising drive to tap into the biggest giving days of the year. In spring, consider holding an event. Or, if your cause has a month associated with it, like October for breast cancer research donations, use that as your fundraising hook.
Tracking. Use analytics tools to determine which pages and articles on your website performed well (or not so well.) Armed with that information, you’ll know what to write for your next update or what to feature most prominently. Google Analytics provides a wealth of data for free, and is sufficient for most small nonprofits. Your Web host most likely offers basic analytics, too.
You Have to “Ask”
Another one of the unique benefits of online fundraising is that it spares you the potentially awkward task of asking people for money face-to-face. Mind you, you still have to develop that skill, but it takes a different form online.
The online “ask” is likely going to be based on an emotional homepage story and photo, as we talked about in the previous chapter. Here’s a typical kind of ask: “For the first time since he entered kindergarten, Alex now has a backpack filled with the supplies he needs to succeed in school. Your gift of $30 today will help another student stay on the path to college.”
In your email newsletter highlighting the backpack drive, consider writing a profile of a donor, and why that particular cause captured her attention.
As with everything on your website, you want to make it easy for donors to give. Your Donate button should be easy to find, and “above the fold,” meaning visitors don’t have to scroll to find it. When supporters get to the donation page, don’t break the mood by making them fill out unnecessary form fields (people get especially hesitant about required phone numbers.)
Suggest an amount. If $30 will cover half of the backpack supplies, suggest that, but leave room for an amount of the donor’s choosing. And speaking of choice, be sure to include a monthly giving option.
Understanding the “Ladder of Engagement”
In the nonprofit world, the “ladder of engagement” is a concept that describes people’s level of commitment to a cause. Your supporters most likely will hop around the rungs to a degree, but the idea is to deepen your connection with them and move them up the ladder over time (Figure 5.1).
Figure 5.1. The ladder of engagement shows the range of involvement people feel toward causes they support.
Beth Kanter, coauthor of The Networked Nonprofit and author of the popular Beth’s Blog at www.bethkanter.org, says organizations’ communication and relationship-building strategies should help move people through the various roles and levels of involvement.
“They don’t all move, it isn’t linear, and it’s messy,” she says. “Very important is the network weaving done by the personal fundraiser who inspires, connects, and motivates people in the campaign.”
Here are the players involved in the ladder of engagement:
• Happy bystanders: Blog readers, Facebook friends, offline colleagues.
• Spreaders: People who are willing to share the information about your cause with other people. They may add the widget to their profile, retweet, leave a comment on someone’s blog, Digg your post, bookmark it, forward a video to friends, and so on.
• Donors: Open their wallets.
• Evangelists: Solicit their friends on your behalf.
• Instigators: Create their own version of your cause and why it is meaningful to them.
Keep the ladder of engagement in mind as you develop your communication and fundraising plans. Ideally, your website will appeal to visitors no matter where they are on the ladder. Think about the kinds of content (favorable ratings, testimonials, success stories) that might bump a happy bystander up to the donor level.
By contrast, instigators have already donated, so you don’t need to sell them on your organization’s value. They might be looking for information about leadership opportunities or your next big campaign.
PayPal Insider: eBay Giving Works: Three Ways to Fundraise
• eBay sellers can donate a percentage of their items’ final sale prices to nonprofits that are registered with the program. Buyers can purchase these items, identified by a distinctive blue-and-yellow ribbon, or add a minimum $1 donation at checkout to eBay purchases paid through PayPal.
• Nonprofits can sell their own goods on eBay for free to raise funds.
• Any eBay member can make a direct cash donation through PayPal at any time, with no obligation to buy or sell.
Industry Insider: How to Raise Money Without Asking for Money
1. Shop online: Ask supporters to start their online shopping at GoodShop. GoodShop is a shopping portal that donates a percentage of almost every purchase from more than 2,500 stores (including Gap, Target, Staples, and Macy’s) to your organization. You sign up on the website, and your supporters designate you as their recipient.
2. Recycle electronics: Hold a gadget drive where supporters bring in their old electronics (including smartphones, laptops, iPods, and more) and you turn them in for cash through eBay Instant Sale or other buyback programs.
3. Redeem credit card points. Ask members to turn their unused credit card points into a charitable donation. Both American Express and Citibank offer this program.
4. Search the Internet: GoodSearch.com is a Yahoo!-powered search engine that donates about a penny per search to your cause after you sign up.
5. Meet someone: Partner with a local bar, restaurant, or retailer. You send people to their establishment, and each time someone “checks in” there on a social networking website such as Foursquare, the establishment donates to your cause.
6. Donate airline and hotel miles: Most airlines allow people to use their frequent flier miles to buy tickets or office items for other people. Ask your supporters to use theirs to help your organization.
7. Dine out: GoodDining.com gives up to 6 percent of the money spent on a meal at 10,000 restaurants across the country to the diner’s cause of choice.
8. Volunteer: A handful of companies match volunteer hours with funds. For example, Microsoft matches volunteer time at $17 an hour. Boeing, Exxon, Intel, Chevron, and Bank of America have similar programs.
Helping Hand
Online fundraising can be set up quickly, but you definitely don’t want to be slapdash about it. Follow these pointers for success:
• Assess your overall readiness for fundraising. Recognize that online fundraising takes commitment.
• Plan a campaign that integrates online and offline fundraising methods.
• Craft an online “ask” that resonates with people who are already inclined to give and those who just want to get to know your organization better.
Coming in Chapter 6, we’ll go through the legal and ethical issues that come up in online fundraising.