The Biggest Fundraising Mistake Nonprofits Can Make

Nonprofits make plenty of fundraising mistakes, but that’s not a big problem in most cases. A majority of these mistakes are small bumps in the road that don’t cause any serious damage. An issue here and there is commonplace in a year’s worth of fundraising. Each year organizations can fix prior mistakes and work to minimize them. The big mistake we’re going to highlight today is particularly dangerous. If it is not caught from the start, it often plagues an organization as a long-term way of thinking. Here’s the key mistake nonprofits need to avoid when fundraising and marketing their cause to donors. 

Failing to invest in your future 

Connecting with donors and fundraising generally, costs money. Acquiring new donors through the mail, special events, and even social media costs money. These campaigns take time and resources to do them properly and effectively. While it costs money, it is essential to pay these costs in order to invest in the future ability to fundraising. It may be difficult to divert funds away from your mission but think about these as investments in the long-term mission. Avoiding these costs in order to save money now will cause a slow death for your organization. No organization will ever save its way into profit. Laying the groundwork for a sustainable fundraising network is far more productive than spending the money or tucking it away.

Acquiring new donors is not free and often fails to bring fundraising returns in the first year. Despite this, nonprofits must continue to invest in their future via fundraising. As you can see above, acquiring a new donor via direct mail is not cheap, but the return on every dollar spent on direct mail reveals the power of investing in donor acquisition and fundraising. You can also see the difference in cost and return between social media and direct mail marketing. Choosing the wrong strategy in order to save a minimal amount of money is another detrimental but avoidable mistake for nonprofits. Saving a few dollars is useless if it results in terrible returns on a fundraising campaign. Choosing to not spend a few thousand on a new website and then missing out on donor traffic and digital gifts is far more damaging than spending the money in the first place. It is imperative that nonprofit organizations step up and make the proper investments in themselves in order to achieve stability and longevity within their community.

It is usually for all the right reasons 

Nonprofits aren’t holding onto their money because they’re greedy. They are often trying to spend every penny possible on their mission. Unfortunately, this attempt to do more is actually a disservice to their long-term goals. Choosing to lower the fundraising budget could provide your organization with more funds for your mission now, but it hurts your ability to function in the long term. Fundraising is the fuel that will drive your organization and mission. Additionally, focusing on establishing your fundraising concretely signals to donors that you have the ability to work effectively in the long term and it sets you up to robustly tackle your mission without financial concern.  Donors desire organizations that display sustainable and responsible use of gifts. Failing to reinvest is a failure to display financial sustainability to donors.

The bottom line is that investment is needed for growth. It is essential for your organization to invest in fundraising in order to grow. As your fundraising grows so can your development office and so can your fundraising campaign budget. There’s no shortcut to reaching a high status of fundraising. Continuing to build a financial foundation and donor network will only pay off in the long term, but you must start now by investing in fundraising properly. It takes hard work, but don’t underestimate the potential of your cause. Nonprofits and their staff believe strongly in their causes, so they ought to invest in themselves. This is the best way to fuel your mission.

Unsure if you have invested in your future properly? Planning is essential for nonprofits and small businesses to understand where they are and where they are going. Check out our page on strategic planning services and make sure to download our new Free Strategic Plan Guide. This guide has everything you need to prepare for the strategic planning process.