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Fundraising is both a science and an art. While the ultimate goal of a non-profit is to help, it takes much more than good intentions to be a good fundraiser and hold successful fundraising events. Analytics and predictive models are increasingly being used in the fundraising world, and new non-profits increasingly have to carry themselves and use the same tools as major companies to succeed. And many end up failing because they weren’t able to build a connection between donors and a cause or didn’t understand some of the core fundamentals of fundraising.
Business fundraising also comes with its fair share of challenges. New businesses with bright ideas also need to understand these fundamentals if they want to diversify their financing opportunities. In this article, we’re going to give you some of the most common fundraising mistakes that you should avoid at all costs, whether you’re a non-profit or a startup trying to get off the ground.
Above all, fundraising is all about building relationships. This means following up with your donorsand making sure that they feel appreciated. You should contact your first-time donors immediately and thank them. You also have to find a way to keep in touch with them and make your interactions as genuine and natural as possible.
One tool that you could use is a fundraising CRM. This tool will allow you to gather all the crucial information about your donors, all the interaction you had with them, what charities they donated to, how much they gave in total or recently, and also observe trends and data about your efforts.
You’ll be able to better segment your donors and contact them about events or causes they might gravitate to. This is an invaluable tool if you want to be able to keep track of performance and make adjustments to your fundraising strategy.
You should also go the extra mile and try to build a relationship with them through social media. Make yourself easy to find, and share touching follow up stories on how your efforts were able to help. These are the kind of things that donors like to see. It will convince them of the sincerity of your organisation, and its ability to deliver real results.
This is one of the biggest mistakes inexperienced business owners make when they seek financing from venture capital. Not only does it show that you don’t understand how valuations work, but you can kiss your chances goodbye of keeping a majority stake if you ever get an offer. There’s no way a venture capitalist will give control of a company to someone who can’t even come up with a decent valuation.
That’s why you’ll need to understand the basics of valuation, and fundraising in general, if you want to increase your chances. You don’t necessarily have to go through an MBA to understand the basics. For instance, you could use a service like Superprof that will connect you with tutors who will show you the ropes. Some of these work as teachers, while others are seasoned business owners. They will be able to give you some tips on how to improve your chances of getting financing, building a plan and forecast that will be presentable and realistic, and understanding how to value your business correctly. The best thing is that they’ll be dedicated to you and you only if you choose this path.
Fundraising is not solely about getting record donations. It’s about effecting real social change. Non-profits need to know exactly how much of an impact they’re making, and they have to do so by gathering real data and acting on it.
Even if you’re running a non-profit, you have to see your donors’ donations as an investment, and your impact as the return. This means that you always have to find ways to be more efficient and do more with what you have. It’s also about avoiding administrative bloat and finding ways to run a leaner operation. Fundraisers who overspend are not seen favourably, and your finances will face scrutiny at some pointif there are suspicions of misappropriation.
It’s funny to see how many business owners try to cut corners when it comes to their pitch deck. They have outlandish valuations and want to hit a billion overnight, and yet, they are spending less on their decks than some people do on their lunch.
So, whatever you do, make sure that you invest in a proper deck and have your pitch professionally made or edited. Considering the amount of money you can get back, it’ll be well worth it.
While fundraising is about getting funds first and foremost, you shouldn’t only ask your donors for money. If you do, they’ll assume that you’re only trying to milk them for their money.
Offer something back instead. For instance, you could offer them ownership in some of the initiatives that you’re starting. They will feel more invested in the efforts and will have more insights into the specifics. They will then be more inclined to do some fundraising on their own and bring more attention to the cause.
You also have to work on outreach efforts. Send thank-you packages, invite them to free events, and allow them to reach you in as many ways as possible to maintain donor engagement.
While your business’s financials will play a crucial role, when investors invest in a business, they’re also investing in you. This is especially true if you’re thinking of keeping majority control.
What investors are looking for is someone they can trust to hold the reins of the company and will be truly dedicated to it. Someone they can always align with and won’t be too rigid. Someone they can meet halfway. So, you have to show them that you’ll be able to weather the storm and be there through thick and thin. Show them what exactly makes you the kind of person they can count on.
You don’t want to seem eager for donations. The more capital you’ve invested in creating a genuine relationship with potential donors, and connecting them with your cause, the more you’ll get in return.
Too many organisations make the mistake of automatically asking for donations the minute someone completes an interaction with them. Just because they follow you on Twitter or Facebook, it doesn’t mean you should start knocking at their door with your hand out.
Again, focus on the cause first, give them a look at your work, and let the donations come organically. Also, make sure that you organise events where they’ll get to know you and your organisation. But don't ask for a single donation. This way, they’ll get a true idea of who you are, what you stand for, and what you’re actually doing on the ground without feeling solicited. They will then be much more inclined to give a donation or see requests for donations favourably later on.
Fundraising is not always easy, and this is especially true at the start when you don’t have the time to prove yourself and build a brand and presence. But, if you manage to follow these few tips, you’ll be able to reach more donors and increase your chances of success.
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