Your nonprofit organization may have cut some expenses over the past year. When times are tough, some organizations, especially small ones with limited resources, veer towards trimming, with the mindset “we can’t afford this.”
Use caution before you nix something you think you can’t afford. It may be something you should be investing in.
This doesn’t mean going wild with your budget. You need to make good investments. Here are a few areas you should be investing more money in. The good news is, if you do it right, these investments will help you raise more money.
Invest in a good CRM/database
Plain and simple, a good CRM (customer relationship management)/database can help you raise more money. You can segment your donors by amount and politely ask them to give a little more in your next appeal – $35 or $50 instead of $25.
A good database can help you with retention, which will save you money since it costs less to keep donors than to acquire new ones. You can personalize your letters and email messages. Make sure to invest in a good email service provider, too.
Personalized letters and messages mean you can address your donors by name and not Dear Friend. You can welcome new donors and thank current donors for their previous support. You can send targeted mailings to lapsed donors to try to woo them back. You can send special mailings to your monthly donors. You can record any personal information, such as conversations you had with a donor and their areas of interest.
In short, you can do a lot with a good CRM/database. Invest in the best one you can afford, and Excel is not a database.
Invest in direct mail
You may not have used direct mail that much over the last year when many workplaces were closed and the mail was unreliable. But some organizations were never or rarely using it before the pandemic.
If that’s the case for you, you’re missing out on an effective and more personal way to communicate with your donors. Think of the enormous amount of email and social media posts you receive as opposed to postal mail. Your donors will be more likely to see your messages if you send them by mail.
Yes, direct mail is more expensive, but you don’t have to mail that often. Quality is more important than quantity but aim for three or four times a year.
Give some thought to what you send. Some ideas, besides appeal letters, include thank you letters/cards; Thanksgiving, holiday, or Valentine’s Day cards; infographic postcards; two to four-page newsletters; and annual/progress reports. You could put a donation envelope in your newsletter to raise some additional revenue, but do not put one in a thank you or holiday card.
Shorter is better. Lengthy communication will cost more and your donors are less likely to read it. Case in point, the 55-page annual report I received last month.
A few ways you can use direct mail without breaking your budget are to clean up your mailing lists to avoid costly duplicate mailings, spread thank you mailings throughout the year – perhaps sending something to a small number of donors each month, and look into special nonprofit mailing rates. You may also be able to get print materials done pro bono or do them in-house, as long as they look professional.
Of course, you can use email and social media, but your primary reason for communicating that way shouldn’t be because it’s cheaper. It should be because that’s what your donors use. If your donors prefer you to communicate by mail, then that’s what you should do.
Invest in donor communications
By donor communications I mean thank you letters/notes, newsletters, and other updates. Some organizations don’t prioritize these and want to spend their time “raising money.” They don’t seem to realize they can raise more money with better donor communications. Remember this cycle – ask, thank, report, repeat.
Don’t skimp on your communications budget. Creating thank you cards and infographic postcards is a good investment and a necessity, not a luxury. Thank you cards are a much better investment than mailing labels and other useless swag.
Maybe you need to reallocate your budget to cover some of these expenses. You could also look into additional sources of unrestricted funding.
Remember, you can also use email and social media to communicate with donors. This reiterates the need for a good email service provider with professional looking templates for your e-newsletter and other updates.
Speaking of unrestricted funding
We need to stop treating overhead or infrastructure as something bad. Some funders want us to spend our budget on programs, but how can we successfully run our programs if we don’t have enough staff and can barely afford to pay the people we do have? A rotating door of development staff makes it hard to maintain those important relationships. Even though some people may be working from home, we still have rent and other expenses.
Until these funders stop worrying so much about overhead, you may want to invest some time in finding unrestricted funding sources – often individual gifts, including major gifts.
Don’t limit yourself by saying you can’t afford certain expenses. If you make the right investments, you should be able to raise more money.
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