Fundraising Will Never Be The Same
Most of us have spent the last three months thinking through the infinite number of possibilities for what our nonprofit world might look like on the other side of this pandemic. As the founder of Gladitood, a software company focused on online fundraising for nonprofits, I thought that imagining the total spectrum of possibilities would help me feel prepared for what’s to come, but I’ve failed miserably at easing my uncertainty. I am convinced of one thing, though — fundraising has changed forever, and problems will be solved faster than we ever thought possible.
Coronavirus has exposed our vulnerabilities. How many nonprofit organizations have relied on a small group of wealthy donors to support the majority of their operating budget? How many make almost all of their annual revenue from just a couple of big events?
Are you thinking of your nonprofit? Did your large donors politely ask if they could fulfill their pledges later? Did you have to cancel your upcoming fundraiser? Are you having to plan your first ever virtual event as you face the stark reality that we may not be “back to normal” anytime soon?
We sit in our board meetings planning our big fundraising events and talk about the 80/20 rule as if it’s a totally acceptable standard. Eighty percent of our revenue from twenty percent of our donor base. One third of our operating budget from a single event. And we celebrate these outcomes as successes.
Almost every nonprofit I know, through no fault of their own, is guilty of putting too many fundraising eggs in too few baskets. COVID-19 ripped the bottom out of those too few baskets and shattered our fundraising eggs.
It’s shown us that an 80/20 rule isn’t an outcome to be celebrated, but a risk to be avoided. My biggest fear is that our nonprofits will try to hold on to the way things were, failing to realize how much brighter our future can become. This universal pause we have taken is our opportunity to step back and bring “normal” into focus. We have a chance to realize that the way we’ve always done things may no longer serve us, and we finally have the technology to support this much needed change.
The reason our nonprofits are so vulnerable today boils down to our limitations around communicating with our donors. We never had the technology to maintain hundreds of personal relationships, so we were forced to focus on those that would return the most value for our cause. It would be impossible to host a dinner with each individual donor throughout the year, so it made sense to put on a couple big events where we could get everyone together.
This approach causes a long list of issues, all of which have been worsened by COVID-19. First is unpredictable revenue, which in turn causes an aversion to risk, and that aversion to risk caps your growth potential. When you rely on events, your revenue is limited to the people in the room, and the only way to grow revenue next year is to either invite larger donors, book a bigger venue, or put on another event. This slow, unpredictable growth and high risk aversion makes it difficult to hire top talent and build board confidence. Once upon a time, this was the best we could do within the confines of our limitations. But today, those limitations don’t exist anymore, and we can do much better.
The technology exists today to help you build and maintain personal relationships at scale. You don’t have to choose between large donors and small donors anymore. You can choose to reach the right donor. At the right time. With the right message.
This is exactly what we do at Gladitood. We leverage this technology to reach your current donors, identify audiences of potential new donors, and create targeted fundraising campaigns that drive revenue.
You can transform your nonprofit from fundraising just a few times a year to being able to drive donations and capture new donors every single day. You can leave unpredictable revenue behind, and begin to move toward predictable growth and monthly recurring revenue.
Please, take a moment to imagine what predictable growth and consistent monthly revenue would mean for your cause.
Did you think about how much board confidence that would instill? Did you think about how many more risks you’d be willing to take? Or how about your ability to proactively hire great talent because you can offer competitive compensation with the for-profit industry? Would you be able to act faster for your cause? Impact more lives? Solve the problem you’re addressing completely?
Are you hooked yet? This new approach to fundraising is data driven and digital, because that’s where your donors spend most of their time. It relies on our newfound ability to enrich donor data with demographic and behavioral data, and then make the appropriate fundraising decisions. It’s fundraising that always runs in the background and is always improving. It’s an endless cycle of acting, analyzing, and reiterating.
It might sound intimidating, but that’s just because it’s new and unfamiliar. In its simplest form, it’s the ability to make the best fundraising decision for each individual donor. This approach unlocks a future where our nonprofits are more stable, operate with increased confidence, and solve our most pressing problems faster than ever.
So my question for you is this — will you be the nonprofit scrambling to pick up the pieces of your broken eggs? Or will you take this opportunity to reevaluate and invest in more reliable baskets?