Congratulations, you started a nonprofit!
Your organization is officially recognized by the IRS as a 501(c)(3) nonprofit organization.
Now the real work begins. My experience with start-up nonprofits has shown me how mistakes, both large and small, can limit the organization’s growth and sustainability.
I’ve listed a few of the most common errors along with my suggestions on how to either avoid or correct them.
· Indefinite Self-funding: Self-funding is quite common. You believe in your mission and want to get started. Additionally, donors want to see that you support your own vision. The mistake is choosing to go it alone and not ask others for support. Start early by asking those closest to you and to the work.
· Going to the same donors: Just as self-funding for too long is a mistake, so is repeatedly asking the same people for support. They may love your mission, but you don’t want them to feel like ATMs. One way to expand your donor base is to ask your board to share their network of friends and colleagues.
· Not building pipeline of new donors: Similar to the earlier point, an organization needs to continually expand its reach. In addition to your board, use social media to attract new prospective donors.
· Not having a donor database system from the beginning: You need the right tools. A database management system, otherwise known as a CRM, is a valuable tool. It will help you keep track of donations and other information. An Excel spreadsheet or Google sheets is not enough.
· Too many special events: It seems so easy, let’s have a party! But how much time will it take and how much will it cost? A good rule of thumb is to spend no more than $35 for every $100 raised.
· Seeking grants too soon: Foundations want to see a track record. They want to see that you have support from individuals, plus they require documentation, such as budgets and program descriptions. It’s best to show what you can do before you approach a foundation.
· Not stewarding donors: This is a big one. As I mentioned earlier, people don’t want to feel like money machines. They want to know that you appreciate their support. Thank a donor and be in touch with them several times before asking for another gift.
The best way to avoid these mistakes is to invest your time in a development plan. See my article HERE for tips on creating a one-page plan. You need an integrated and diversified strategy to raise sustainable funds.
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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.