No one likes making mistakes and especially with our fundraising efforts. Dollars and donors are at stake. Plus, nonprofit organizations are ethically responsible to abide by best practices and laws established for our sector. The Association of Fundraising Professionals has developed a Code of Ethical Standards and a Donor Bill of Rights to help guide professional fundraisers and the organizations where we work.
Unknowingly, nonprofit professionals still make mistakes that can impact their fundraising success.
Even with the best intentions, here are some mistakes we see all too often in our work with nonprofit organizations.
1. Relying on too few donors, “angel” donors.We love our angel donors and they love us, but eventually the relationship becomes unhealthy. The organization is stunted because its leadership did not secure additional donors and the “angel” starts to feel unappreciated.
2. Not taking the time to develop relationships.If you don’t have a relationship with your donor, you have a transaction. People are not loyal when they feel like they are making a purchase. If you only call on your donor when the luncheon or gala rolls around, they may purchase a table, but they will not support you beyond that.
3. Not using donor’s gift as intended. It is unethical to use a donation for something that is not agreed upon by the donor. You cannot redirect a gift without the donor’s permission. If a donor designates their gift to a program that is already fully funded, the organization must inform the donor. Very often, the donor will allow the organization to use the funds for another program or general operations, but the organization must be prepared to return the full amount of the donation.
4. Not thanking your donors. Thanking your donors is more than a common courtesy, it’s required by the IRS. See my article on Nonprofit Thank You Letters.
5. Commissioned-based fundraising. This is unethical. Don’t do it. Don’t ask your staff to do it. Put the AFP Code of Ethical Standards and the AFP Donor Bill of Rights in the board of directors’ notebooks.
6. Not investing in a donor database. You might think you cannot afford a donor database (CRM), but you cannot afford not to have one. All the information you need to document about your donors cannot fit on an Excel spreadsheet. There are some low-cost or even free options. Check out TechSoup.
7. Investing too much time on grants. Yes, grants an important part of your contributions, but individuals give more and ask for less in return.
8. Not following your state’s regulations for nonprofit fundraising. Ignorance is not an excuse when you’re dealing with the law. It is your responsibility to know the current state and federal regulations regarding nonprofit organizations and fundraising. If you are fundraising in other states, many required your nonprofit to be registered in that state.
Michelle Crim, CFRE
Dynamic Development Strategies can help. We offer coaching and fundraising services for our nonprofit clients. We specialize in startup and smaller nonprofits because we understand your challenges. Please contact us for more information.