For any start-up, fundraising is a critical aspect of day-to-day operations. But figuring out how to raise money is also often one of the most stressful, confusing, and frustrating processes founders deal with. Luckily for our accelerator cohort, we were able to bring in two of our favorite fundraising experts to guide them through that process.
Lisa Hogen is the Chief Development Officer at Kiva. Chad Bolick is a Wealth Investment Manager for Morgan Stanley, helping wealthy individuals figure out how they want to donate their money. With decades of combined experience leading fundraising campaigns, Chad and Lisa helped us make sense of conflicting advice and shared crucial tips on how to raise money by building the best fundraising strategy possible.
Focus Your Fundraising Efforts
Our panelists agreed that there may be an over-emphasis on donor diversification. While it’s good to diversify your funder base early on, usually nonprofit organizations have one donor type that is best for them. Determine where your early successes are coming from, and prioritize funding sources from similar donors. For both Lisa and Chad, focusing on one target donor segment has yielded the best results.
Nonprofits that scale well have a very narrow funder focus and fundraising strategy. For instance, Tipping Point, based in San Francisco found the most success by targeting individual donors through an annual gala event. By committing to this approach around how to raise money, they’ve made their galas incredibly successful: last year, they were able to raise almost $17 million in one night.
What is the best way to identify individual donors?
Many charitable individuals serve on the boards of other nonprofits. Find out what boards they are on, find out how those organizations relate to your mission, and use this to appeal to a potential donor. You might be surprised how closely associated you are to potential donors. You are probably connected by one or two degrees of separation to more individuals with the capacity to give than you think, especially if your organization is based in a larger city.
When is the best time to seek funding from individuals?
When you’re thinking about how to raise money from individuals, the end of the year is the best time to secure individual funders. As the end of the calendar year approaches, many individuals are searching for causes to meet their personal philanthropic goals. However, there is another reason to court individual donors at this time of year. Donor advised funds (DAFs) allow donors to make initial, unspecified charitable contributions to an account for an immediate tax benefit. Later, the donor can earmark the funding for specific recipients. DAFs are the most popular charitable vehicle for individuals, and they require a certain amount to be spent each year. Now is the time to keep your organization top of mind for these giving individuals.
How to raise money from individuals?
Donor cultivation is highly relational. You must first build strong personal connections with individuals before making a monetary ask. Often, it’s smarter to ask for contributions of time or advice first. Donors want to feel like they are a part of your team and your story. Invite them to a working meeting so you can get them in the room with other core team members to show them the momentum your organization has. They’ll leave eager to keep contributing.
Once you receive that initial investment, keep nurturing the funder relationship. One tactic around how to raise money after the first donation is to provide quarterly reporting or updates for your funders. This keeps them involved and in the loop, giving you four touch points to further develop your rapport.
Thank you so much to Lisa Hogen and Chad Bolick for sharing their time and wisdom with us, and to Twitter for hosting our cohort and providing an amazing space for us to learn and grow! Check out the photo gallery below for a snapshot at our time at Twitter HQ. It was two full days of learning and connections!