We know. Fundraising can sometimes seem like an insurmountable task. If your organization is just starting out (or if you’re just starting to work as a fundraiser!), you probably have questions about how to begin asking for donations. If you’ve been fundraising for quite some time, you might be wondering how you can improve your strategies.
If you’re a donor, you probably have questions about donating to nonprofit organizations. Luckily, we have answers to the most puzzling fundraising FAQs! Read on for solutions to some of fundraising’s frequently asked questions.
We’ve broken down these questions into two different groups:
Questions nonprofits have about fundraising
How should we ask for donations?
Gone are the days when nonprofits could rely solely on mailed-in donations or cash contributions at events.
Now, multichannel fundraising is all the rage — and for good reason!
You can (and should!) ask for donations in a variety of ways, including:
- In person
- Over the phone
- Through letters
- With emails
- Via social media sites
- On your website and online donation form
- At events
- …and more!
Asking for donations can be tricky. Check out our ultimate guide on who, how, and when to ask for them!
How soon can a nonprofit start fundraising?
If you’ve just started a nonprofit organization but you’re still waiting on your 501(c)(3) status, you can still fundraise.
However, those contributions aren’t tax-deductible until you are officially registered as a charitable organization.
According to the experts, it’s wise to wait until you’ve received your 501(c)(3) status from the IRS.
What is an annual fund and why do we need it?
An annual fund has traditionally been defined as a fundraising campaign that a nonprofit initiates at the same time every year. It usually has a specified theme with coordinating promotional and marketing materials.
However, in an era of multichannel fundraising, an annual fund is now considered to be an overarching plan or strategy with a multitude of moving parts.
Annual funds are crucial for nonprofit fundraising success for a few reasons:
- They establish regular giving habits for your donors.
- They provide regular revenue for your organization.
- Your database becomes more robust.
- They encourage donors to increase their contributions each year.
- They boost both acquisition and retention.
Annual funds and multichannel fundraising go hand in hand. Make sure that you’re taking advantage of both of these avenues as a way to generate revenue for your nonprofit.
Are there any rules about how much fundraising a nonprofit has to do?
Public charities have to receive at least a third of their support from the general public.
This means that your organization can’t rely too heavily on contributions from your staff members, founders, or board members.
Instead, start asking for donations from individuals, companies, and foundations (check out this article to learn how!)
How can our nonprofit promote our online donation page?
There is no shortage of ways to get the word out about your online donation form.
Some traditional ways include:
- Promoting it on your “Ways to Give” page on your website;
- Incorporating info about your donation form in your emails;
- Including a link in your social media posts;
- Mentioning your online donation page at fundraising events;
- Including the URL in your direct mail materials;
- Mentioning your online donation form during your in-person meetings;
- …and more!
Getting the word out about your donation page should only come
after you’ve created an awesome donation page.
What goes into registering your nonprofit for fundraising?
There are a ton of legal requirements that apply to nonprofits who raise money in different states. While we won’t attempt to answer every single question, we can give a brief rundown of what goes into fundraising registration.
A general timeline for registration goes like this:
- Register before you start fundraising.
- Register in your home state (state of domicile) first.
- Register in every state where you ask for donations.
- If you accept online donations, register in New York and Florida; even if you don’t actively solicit there, as they require registration for any donations made.
If you have an online donation page, you have to register in every state you receive donations from.
Many states will accept the Unified Registration Form, but each state has different deadlines, fees, and required documentation.
Your nonprofit risks penalties and even felony charges for not filing properly. Make sure that you read up on the specific registration requirements for each state you fundraise in!
What are the ethics of fundraising?
Again, this is a broad topic that could fill volumes. For the sake of simplicity, we’ll only be hitting some high points here.
There are some industry standards that nonprofits should follow when fundraising:
- Giving Institute’s Standards of Practice & Code of Ethics
- AFP’s Code of Ethical Principles and Standards
In addition, fundraisers and nonprofits should constantly and consistently be monitoring their behavior and measuring it against an organizational code of ethics.
Questions donors have about fundraising
Let’s explore the other side of the fundraising coin!
Where can I find financial information about a nonprofit?
Before donating to an organization, it’s only natural that a donor would want to know how that nonprofit spends its donations.
- Look up the annual IRS form 990 on Candid’s website.
- Ask for the past three audited financial reports.
- Ask for the unaudited year-end financial statements (if audited financial reports are unavailable).
- Ask whether the nonprofit has previously received federal grant dollars.
Don’t make an uninformed giving decision! Make sure that your funds will be used properly by the nonprofit you donate to.
Is it safe to give online?
Many online donation forms (including Qgiv’s) maintain strict PCI compliance. This means that they follow Payment Card Industry Data Security Standards (PCI DSS) and keep your data secure and safe.
Most donation forms will include security logos on their donation form to ensure donors that their personal information doesn’t end up in the wrong hands.
Online giving is quickly becoming one of the easiest ways to donate to a nonprofit. Rest assured that your credit card and personal data is safe by giving on a secure donation form that follows PCI standards.
What is peer-to-peer fundraising and how can I participate?
Peer-to-peer fundraising is a way for nonprofits and donors to participate in the fundraising game.
Without going into too much detail, peer-to-peer fundraising usually relies on:
- A nonprofit setting up a general peer-to-peer page through a service like Qgiv’s.
- Donors sharing the page with their social networks.
- Supporters raising money together for a common cause.
There are endless variations of peer-to-peer fundraising that can incorporate prizes, events, competitions, and merchandise.
Peer-to-peer fundraising is for supporters who want to get more involved with the fundraising process and raise money for the nonprofit that they’re passionate about.
How can I give to a nonprofit?
Monetary donations are the first types of contributions that come to mind when someone talks about giving to a nonprofit.
But there are other ways that a supporter can give back to a nonprofit:
- Volunteer time. If you want to get on the ground and work alongside nonprofit staff members, give your time.
- In-kind donations. Often used by companies, in-kind donations are products or specific services that nonprofits can receive. If a nonprofit project requires certain skills or equipment, consider donating yours!
Does the nonprofit I give to appreciate me?
Acknowledgements and gratitude are central to a strong donor/nonprofit relationship.
If you give to an organization that treats you like an ATM or wallet instead of an individual, it might be time to rethink your connection to that nonprofit.
Additionally, the donation acknowledgements that you receive can be used as donation receipts when filing your taxes. You wouldn’t want to miss out on the tax benefits of donating because of a less-than-amazing relationship with a nonprofit.
Give to organizations that care about you as well as the people, communities, and animals they serve.
How do I want to communicate with this nonprofit?
Nonprofits have an abundance of ways to talk to their donors.
But communication with a nonprofit shouldn’t be a monologue; it should be a dialogue.
If a nonprofit continually sends you direct mail but you’d rather stay in touch via email, let that organization know!
You have the ability to be as involved as you want when it comes to donating. Communicate with a nonprofit on your terms to establish a stronger donor/organization relationship.
How can I ensure that my donation is being spent on the organization’s mission?
One of the easiest ways to make sure that your contributions are being used to accomplish specific projects and campaigns is to give to those specific projects and campaigns.
Many online donation forms will either have an option to donate to a particular facet of the organization or will have a separate donation form for initiatives like events, projects, capital campaigns, etc.
While you likely won’t be able to track your donation down to the penny, you can talk to staff members and leaders within a nonprofit organization to discuss the best option or project for your contribution to go toward.
Hopefully these frequently asked questions and answers have shed some light on the fundraising world for both nonprofits and donors alike.
What other questions do you have about fundraising? Let us know in the comments and we’ll answer them as best as we can!