Saturday, November 3, 2012

Debunking Five Top Fundraising Myths

When it comes to fundraising, it can be hard to sort out fact from fiction. And these surprisingly self-sustaining and false assumptions can act as a barrier to effective fundraising for nonprofit boards and staff. So here are five common myths - and why they are incorrect:

  • Myth: The best way to raise money is to write grants.
  • Fact: Only 14% of charitable dollars comes from grants. And in our current economic climate, grants from foundations and government agencies have experienced the most profound decreases. The vast majority of donations (73%) comes from individuals. If you include bequests in this amount, the total goes up to 80%.
  • Myth: The easiest way to fund your nonprofit is to organize a fundraising event.
  • Fact: On average, for every dollar you raise through an event, you will have spent $1.30 - especially if you count all your staff and volunteer time. Fundraisers can be a great way to increase public awareness about your work, engage board members in fundraising, identify new donors, and build relationships with current donors. But they are massively labor-intensive, making them one of the least efficient ways to raise actual dollars.
  • Myth: There's a shortage of money for nonprofits.
  • Fact: Americans historically have been very generous. Indeed, 65% donate to one or more nonprofit causes, and the average amount donated per family per year is a surprising $2,213. Total charitable giving for 2011 was $347 billion (a 7.5% increase over 2010).
  • Myth: There is so much competition for donor dollars that people won't give.
  • Fact: Board members and staff often believe that with so many nonprofits asking all the time they cannot possibly compete. Yet statistics show that the average American contributes to 5-15 organizations annually. Raising money for your cause is not a competition. If you do your work well and make your case effectively, those who care will donate to your agency.
  • Myth: In a bad economy, people stop giving.
  • Fact: History shows that even during deep recessions, Americans have continued to give. This current recession rates as one of our worst, and charitable giving has indeed been affected, but it is beginning to bounce back. There are certainly individuals who have cut back completely, and donors are definitely prioritizing as well as looking more carefully at the impact of their gifts. Yet, overall, Americans have not stopped making charitable contributions since the economy crashed in 2008.

Don't let false assumptions get in the way of raising the money you need to do your nonprofit work. Understanding the real facts about charitable giving is an important first step toward getting your board and staff motivated as you embark on this season's fundraising campaigns.