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In a time when public and private philanthropic funds are shrinking, non-profits are scrambling to come up with bigger and better fundraisers to get their share of a smaller pie. In this difficult development atmosphere, non-profits must get the most out of the time and money they spend on fundraisers.
Here are three fundraisers to watch out for because, if not done carefully, they can end up costing your organization money.
The Gala
The major problem with the gala, or really any special event, is that running a special event is actually quite similar to starting a business. Have a fundraising dinner and you’re opening a restaurant for one night. Put on a charity concert and you’re in the music biz for the evening!
Profit margins can be small in many of these businesses, even when professionals run them year round it often takes time to create those small margins. It’s rather unlikely for an amateur to come up with a great “product” and profits in one night. Thus, most special events fail for the same reasons most new business fails: costs are too high, prices are too low, not enough “products” (tickets, for special events) are sold, and expectations are unrealistic.
These common causes of failure stem from problems, not surprisingly, that also plague new businesses: lack of funds for front money; underselling (i.e. admission is too cheap); persuading the skeptical consumer (why buy a $300 ticket to a $40 dinner?); and no disaster planning.
When you look at it from this perspective, it’s easy to see that most special event fundraisers are more likely to be high-cost image boosters.
The Monthly Breakfast
There are many problems with this recently trendy fundraiser, and underlying them all is that it is an activity out of context. Monthly breakfasts, or any regular meetings, really only work well for groups whose members want to meet on a regular basis.
True, most invitees are not repeat attendees of the monthly breakfast, but, believe it or not, they still do not want to meet with you for breakfast, particularly if they are going to be asked for money.
We live in an over-committed society, and the last thing people need or want is another social commitment. For most people, that’s all this is, another social commitment that they have to fulfill because a friend or colleague asked them for a favor.
This brings us to two other problems with the event. Most attendees are not going to donate; they never had any intention of donating. Rather, they are just there to fill a seat because someone asked them.
Often these events rely on board members to tap their social and professional networks to fill each breakfast. Monthly events are a strain on these networks both because board members tire of repeatedly asking their friends and acquaintances to attend events, but also because when it comes time for the most important ask – the one for donations – potential donors already feel as though they’ve done something for the organization by attending the event and are likely to give less money, if any.
Combine this with the cost to buy or cook breakfast and the time to organize the event and what you end up
with is a fundraiser that costs more than it will ever bring in.
The Mailer
In the face of rising costs, growing competition from other means of communication, and the increasing sophistication of donors, the net return on an investment in direct mail just isn’t what it used to be.
Another problem with using direct mailings to raise funds, just like with the monthly breakfast, is that it’s a method out of context. Direct mail is a marketing technique to sell stuff to as many people as possible. Fundraising, no matter how it’s done, is a process for getting a relatively small amount of people to give money without getting stuff.
The latter requires relationship building, and the former operates in the absence of a relationship. When the fundraising is undertaken with a marketing mindset, the relationships that fundraising is built on suffer.
Basically, with direct mail, you may get a few small, one time donors, but if you take the time to build relationships, you are much more likely to get larger, long-term donors. While most non-profits need any funds they can get their hands on, in the long run, funds generated through direct mail don’t seem quite as valuable as those generated from well-maintained relationships.
These fundraisers do have a purpose – usually they heighten name recognition within the community for the organization; and they can be used to introduce specific donors to the organization in a more meaningful way – it’s just that the purpose is less financial than many organizations think.
Many non-profits will be better off if they undertake direct mailings, monthly breakfasts or open houses, and special events with no fundraising expectation at all.
Nonprofit Fundraising Ideas That Work!
Most fundraising programs offer several options for you to choose from and combine to create the most successful nonprofit fundraising program for your group. Below is a list of three program options available for nonprofit fundraisers and information on each type is below:
- ON-LINE FUNDRAISING
- PRE-SALES FUNDRAISING
- PRODUCT IN HAND FUNDRAISING
ONLINE FUNDRAISING
Lets face it, we are squarely in the 21st century, and some companies are now beginning to offer online fundraising programs, such as we do here at Fundraising Provider™. Our program has been recognized as a leader in the fundraising industry because of our innovative approach. Advantages of our program include:
- User Friendly, Time Efficient Fundraising Software
- Recurring Revenue Opportunity
- Local Branding Options with your own Website.
- Product Distribution
User Friendly Fundraising Software: Our online fundraising software allows people to easily contact their entire list of friends and family in minutes. As a result, even people who are out of state can support your nonprofit group fundraiser by ordering everything from coffee, gift wrap, jewelry, candles, cookie dough and kitchenware, to novelties and holiday items all online. Our products are then shipped directly to the customer themselves eliminating the need for your group to spend days distributing products.
When you sign up for an fundraiser with Fundraising Provider, our system does all the work for you. Fundraisers can log into the system via our website send emails to local or even out of state family and friends, as well as post on their Facebook account that they are doing a fundraiser. These emails and posts on Facebook will include a link back to our store with a unique code for each individual who has signed up under your fundraiser. Any purchases made are credited directly to your Fundraiser and to the Team Member’s Reward Points account. All sales are tracked in real time and can be viewed simply by logging into your account on our website. Team Members can track their reward points and spend them directly on the site as well.
Recurring Fundraising Revenue: Nonprofit Groups who sign up with our online fundraising program can take advantage of a year-round earning opportunities. Once a person has purchased a product after following a link in an email, a posting on Facebook or if they typed in a flier code from one of your team members, your nonprofit group gets credit. Each purchase made thereafter by that individual at our on line store, will also be credited to your fundraiser unless the customer changes their preference of which group or school they would like to support. We are the only fundraising company offering recurring purchases in our store such as monthly coffee subscriptions and monthly candle subscriptions. Offering great products is very important in choosing your online fundraising company as this keeps them coming back and creates a continual stream of revenue for your group.
Local Branding Options: Use our Software to create your own website for your Fundraiser. We offer a our software to nonprofit fundraising groups for a low monthly price. Our Premium Marketing Package is offered for the low monthly rate of $14.95. Your fundraisers can sign up directly on your own unique domain name and then promote your own website to their friends, family and neighbors.
Product Distribution: Fundraising Provider can save hundreds of hours of man work the nonprofit group through efficiencies available through our website and direct to customer shipping process. This allows the group to focus on its goal. Shipping is then done directly to the customer and no distribution is required to be done by students, parents or administrator.
PRE-SALES FUNDRAISING
A pre-sale is the standard fundraising option for most nonprofit fundraising activities. Usually the nonprofit group signs up with a fundraising company who provides packets to be distributed to their members. These packets will contain catalogs, sign up forms and customer order forms.
Your nonprofit group Fundraising Coordinator then determines a sales period (four weeks to six weeks is standard) and hands out the sales packets to team members on the first day of the fundraiser.
Team members then take orders from family and friends during the designated sales period, and return the sales forms to the fundraising coordinator.
The fundraising coordinator for the nonprofit group then calculates the total, and places a group order with the company. Different companies do this in different ways. Often times its via mail, a local representative or online. Your school then receives your order in 2-3 weeks from the date of submission. The items are passed out the team member who took the order and then distributed to those who purchased from them.
PRODUCT IN-HAND FUNDRAISING
Sometimes, a nonprofit group likes to place a pre-order so that participants can have the product available right when their customer is purchasing it. This method works great for groups who would like to sell outside grocery stores or at sporting events, for example.
The disadvantage of this method is that a nonprofit group may end up with leftover coffee at the end of their fundraiser if the group does not sell their entire order. This cuts into the amount of profit a group will earn.
Nonprofit Groups who do not wish to conduct a pre-sale fundraiser or purchase a pre-order package from a fundraising company are welcome to register and use our online fundraising company to generate revenue for their fundraiser.
