Creating Efficiencies in Nonprofit Fundraising

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The following is a guest post from the Liz Deering of 121Giving, based on data that Social Media for Nonprofits helped compile.

Nonprofits are in the business of solving problems – human, social, environmental, educational, disaster relief and others. But many nonprofits are losing ground by not applying the best practices or using the technologies that create measurable and high-impact success across the business sector.

Our recently co-published report, “The Business of Nonprofits: New Approaches and Thinking About Fundraising,” uses survey results from nonprofit agencies to look at the challenges that arise when nonprofits do not embrace the tried-and-true business practices and technologies that have proven their value in the for-profit marketplace.

The idea for the white paper evolved from a 2014 survey we conducted together with 121Giving, an online product marketplace and crowdfunding platform built specifically for nonprofits.

The 450 results we received from nonprofit executives and program directors highlighted the outages and opportunities for nonprofits to improve the efficiency of their operations by adopting sound business principles and technologies for fund-raising, product procurement and other functions.

Bottom line: Opportunities for nonprofits with new processes, technologies

The bottom line: nonprofits are wasting precious time, dollars and resources to raise funds and procure the products the need to run their operations.

unnamedAmong the key findings of our survey:

  • More than half (54%) of nonprofits do not ask retailers for discounts on products; among those who do ask, 25% receive discounts of 15% or less
  • 22% ask the community to donate products directly
  • 2% raise money online for products they need (and 51% of donation drives are held during the holidays); nonprofits use online donations to buy products in stores or online
  • Only 7% of nonprofits use online crowdfunding resources to raise funds
  • 68% say they pursue grants to cover operational expenses

So why are new business-oriented mindsets important in the nonprofit world?

Firstly, changes in mindsets and strategies are needed to keep pace with the evolution of the fundraising environment and demographic shifts that are impacting how people give across the United States.

Then there’s the data. According to a 2014 Nonprofit Finance Fund Survey, 70% of nonprofit funders now request impact data and program metrics to justify their contributions. Today’s raised-on-the-web Millennial generation is another factor fueling change: Millennials are generous and willing to support causes — but they are more demanding proof that their contributions will make a difference before deciding whether to donate or volunteer to specific causes.

Take advantage of opportunities, show the results

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Our survey also highlighted opportunities for nonprofits, some of which include:

  • Adopting new business practices to run nonprofits as businesses
  • Learning to ask, negotiate and bargain to save money on needed products and to free grant dollars for program-specific purposes rather than operational needs
  • Using data to measure successes, goals and impact
  • Leveraging the connected community of employees, volunteers, donors, influencers and others to publicize campaigns and initiatives – locally, nationally and (via social media) globally
  • Investing in software and technologies to increase efficiencies and reduce the labor intensity of ore functions, including fund-raising, donor recruitment and donor relations, volunteer coordination, product procurement, internal and external communications

Rather than viewing technology or business practices as “cost centers,” nonprofits stand to so much to gain from the long-term benefits and a newfound ability to track and measure the impact of their efforts for the causes they support. It is, after all what donors expect.

As we wrote in the report – “Nonprofits can embrace and enact change by taking one step at a time: exploring and adopting new ideas and business mindsets, embracing new resources and fundraising technologies, implementing data-driven processes to show measurable impact and results, and developing broader and more connected partner networks to help them reach their fundraising goals.”

Download Bettering the Business of Nonprofits here and discover how your nonprofit can – and should – take advantage of tried and true business tools and technologies to achieve fundraising success.

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