Donor engagement is essential to fundraising success, but for small nonprofits, it can mean whether a nonprofit has enough funding to continue operating.
Why is donor engagement often a matter of life or death to small nonprofits?
Consider these statistics from the U.S. Bureau of Labor Statistics:
- 77% of nonprofit organizations have annual budgets less than $1,000,000, with 67% having a budget less than $500,000
- 56% of nonprofits have less than 10 employees
Small nonprofits are stretched budget and employee-wise, and far less likely to have a staff member fully dedicated to fundraising, and time for donor engagement often doesn’t take precedence over providing direct programs. For example – I consulted with the Executive Director of a statewide domestic violence prevention organization to help her launch a major donor campaign. No matter what, she was always going to choose to help a survivor file a restraining order rather than calling major donor prospects.
Larger nonprofits simply have much more bandwidth than small nonprofits to build fundraising programs and engage donors. How many small nonprofits do you know of that have planned giving programs as compared to universities?
But donor engagement is about much more than having a marketing department, a glossy annual report, or a graphic designer on staff. And, it doesn’t matter how many employees a nonprofit has if it doesn’t engage donors.
So, with less budget and far less employees, do small nonprofits have the odds stacked against them when it comes to donor engagement? Maybe?….Luckily, there are many ways small nonprofits can build a thriving donor engagement program centered on authenticity, systems, and rigor.
At small nonprofits, the same staff providing direct programs are usually the same staff involved in donor engagement. And who better to make the case for support to donors than those staff so heavily engaged in helping generate the positive social outcomes donors want to fund?
By nature, staff in small nonprofits often have to “fly the plane while they work on the plane”. Not always the best place to be – but this is the reality for small nonprofits. In essence, a staff member is getting then opening the mail, sending thank you notes, attending coalition meetings with partnering nonprofits, coordinating volunteers, launching an advocacy campaign, and other tasks EACH day.
It’s essential small nonprofits get their message as well as these tireless advocates (staff, board members, and volunteers) in front of donors. But – how?
So, now the most important ingredient to a successful donor engagement for small nonprofits: systems.
Quite simply: Systems trump intentions every day.
The statewide coalition mentioned a few paragraphs ago implemented new donor engagement software to help provide the data to build a simple yet robust system of donor engagement – and ensure institutional memory. (Their old software was extremely difficult to use. They once lost all the first names of stakeholders in their database when a mail-merge went horribly awry).
A staff member used the new donor management system to engage donors and prospects with increased frequency and more continuity. And, the Executive Director achieved her goal of making seven major donor calls per week – no matter what!
It took systems, dedication, rigor, and time for donor engagement to pay off for the organization. In about six months, they began to diversify their funding base (relying less on one large funder as in the past) and launched a successful major donor program. With systems, specific goals, and accountability – they created a robust and sustainable donor engagement program.
So it’s definitely not impossible for small nonprofits to engage donors and raise more funds. But, the reality is the big nonprofits are raising an overwhelming majority of the funds going to nonprofits. For example, universities raise millions of dollars in rural areas, funds that often simply build their billion dollar endowments. Meanwhile, local based nonprofits like smaller YMCAs or Boys and Girls Clubs are struggling to maintain sufficient funding reserves.
But small nonprofits are far from a lost cause – they just need systems and rigor to engage donors. The goal isn’t to take money away from the universities, it’s to make a more frequent and more powerful case to donors and prospects about the incredible social return on investment these small nonprofits offer.
A robust donor engagement program can ensure smaller nonprofits survive and thrive. We’ll take deeper dives into systems and rigor in future blog posts on donor engagement.