Do’s and Don’ts of Ethical Fundraising for Nonprofits

All of us develop bad habits over time without thinking about it. Whether it’s chewing on your pen, playing with your hair, or saying the word, “like,” like two-hundred times a day–we all do it. As the saying goes, “Old habits die hard.” While that may be true, when it comes to nonprofits, bad habits in fundraising can have disastrous impacts.

Since nonprofits are reliant on fundraising, it’s easy to lose sight of which fundraising tactics are ethical and which ones aren’t. The point of ethical fundraising is to pay respect to your donors, build trust among the general public, and promote transparency; which leads to better retention rates among donors and, hopefully, a higher revenue stream.

To maintain an ethical approach to your fundraising, you need to follow certain guidelines. Here are a few do’s and don’ts of fundraising to ensure you maintain trust with your donors.

Do: Communicate the Value of Donor Impact

Think of your mission statement as a product. If a supporter donates to your cause, it’s not because they have some extra cash laying around. They’re contributing because they believe in your mission. In turn, they expect their money to be used effectively. If your mission is to end poverty, then it’d be worthwhile to show how donations are used for constructing a shelter, or for giving a Thanksgiving dinner to a family in need. Most organizations have started using social media as a tool for showing their donors how their donations are contributing. This is an easy and quick way to show your donors exactly how they’re making an impact.

Don’t: Ask for Another Donation Before Thanking Your Donors

Sometimes nonprofits forget how far a simple thank you goes with a donor. People like to know that their contributions matter. But, all too often, instead of a thank you, donors get a follow-up email asking if they would like to set up a monthly donation or if they’d like to donate again. It can be infuriating for a donor to feel like the organization they’re supporting only cares about their money and not their support. By thanking them for their support, whether it’s for $1 or $10,000, the main objective is to have them keep supporting your cause. A quick thank you can go a long way.

Do: Track and Maintain Donor Information

Fundraising isn’t only about donations, it’s also about establishing relationships. Because your nonprofit relies so heavily on donors, it’s important to track your interactions with them whether it’s a quick conversation or a longer meeting at an event. If you can build a history with them. They’ll feel like you care about their support. Tracking all that information can be difficult, so you might want to invest in a donor management software like DonorExpress or NeonCRM. The software allows you to create individual customer accounts for tracking donations, interactions, and any other information you might need.

Don’t: Stalk Your Donors

Just about every nonprofit has had difficulty raising money. When you’re in that position, you might start blasting emails, cold-calling previous donors, or, in general, just becoming an annoyance. If you go that route, you will create more enemies than friends. Donations are important, however, it doesn’t mean you need to harass people for a dollar. These tactics might work at first, but it doesn’t build a positive image of your organization and can push people away. Be sure to keep your distance and reach out to donors only at well-spaced intervals.

Do: Use Donation Levels

If done correctly, donation levels, or tiers, can help create more transparency with your supporters. A donation level is a predetermined amount of money for someone to donate (e.g. $25, $50, $100). In addition to leaving a blank line for people to donate however much they want, this encourages donors to spend a little more. One way you can create transparency is by including what the suggested amount of money will do for your mission. If you run a dog shelter, include how many dogs $15 will feed. $30 will go toward X number of vaccinations, and so on.

Don’t: Pity Your Donors into Donating

While it’s important that you try to connect with your donors on an emotional level, you don’t want to force them to donate by saying something along the lines of, “If you don’t donate, this dog won’t eat tonight.” Instead, connect with your donors by inspiring them, giving them hope, and telling a compelling story of how your nonprofit works to accomplish its mission. People tend to ignore or immediately shut down when they’re sad. Instead, give them something to be happy about and cast their dollar toward making the world a better place.

While habits may be hard to break, if you want your nonprofit to be successful, you should start sooner rather than later. Whether you’re smothering your donors with emails, pressuring them to donate, or not thanking them, you have better options for increasing your donations than using those tactics. In the end, if you want your organization to form relationships with your donors, always be sure to take the high road.