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5 Tempting Mistakes You're Making as a New Nonprofit that Could Make Fundraising Harder

Updated: Jul 20, 2022

Launching a new nonprofit organization is no small task. You're passionate about solving a problem in your community and see your solution as a way for people in need to improve their lives. Your nature is so philanthropic that you're willing to devote countless hours a week to developing a concept, creating a brand, building a strategy, submitting stacks of paperwork, finding and vetting a Board... It is certainly a labor of love and something to be commended. But are there little things you're doing or not doing that could prevent your nonprofit from having the success you want and your clients need?

As a veteran fundraising professional, there are so many nuances to building and maintaining a successful nonprofit. In my decade-plus of experience, I've had the benefit of working with fellow nonprofit executives, individual donors, foundation administrators, and people on all sides of the philanthropic relationship. These individuals have shared insight with me over time that has helped nonprofits at every stage increase their likelihood of fundraising success.

Based on that insight and experience, here are 5 mistakes that new nonprofits make that impact their ability to successfully fundraise and build a positive reputation for their organization:

1. You use a Gmail account as your official email address. Using an email service provider like Google or Yahoo immediately diminishes the professional nature of your nonprofit organization. These free providers are great for personal accounts, but a branded email handle is almost (in my opinion) a requirement upon launching a new nonprofit. And it's an easy fix. Utilize email service through your website platform. Wix, for example, offers up to 5 email accounts for free with your domain name.

2. You don't have a website.

In today's technology-based world, not having a website is going to make it very challenging for your nonprofit to gain any traction when it comes to donors and foundations. According to Charity Navigator, one in three individual donors does online-based research before donating. Much like a domain-branded email handle, a website gives your nonprofit credibility and can enhance its professionalism. Consider you're a donor. You have two nonprofits you're considering supporting this year. One comes up in a Google search immediately with a polished, professional website. The other has no online presence. In which do you feel more confident investing?

3. You don't require financial contributions from your Board of Directors. Listen, I get it. It's hard to ask people to give their time AND their money to a new nonprofit organization. But 100% of your Board of Directors needs to support your organization with a monetary contribution every year. How much? That's up to you. When you are submitting a grant request to a foundation, and you reply that less than 100% of your Board gives to support your mission, their response is quick and easy: If they don't, then why should we? The people closest to your mission should be the easiest to convince that their support is vital and makes a difference.

And there's an easy fix! Lead with this expectation. Everyone on your Board should be aware immediately that a financial contribution is not only expected but a membership requirement. You set the threshold of how much or let that be an individual assessment/decision. But in-kind or donations of time do not count. Cold, hard cash. Every single year. (Here's a secret... it is rare that a foundation ever asks how much your Board gives. They just want to know that they all contribute some amount.)

4. You expect to start receiving grant awards as soon as your IRS designation letter hits your mailbox.

While this isn't possible, it's highly unlikely. Right after you've launched your nonprofit and received your designation, it is a much more valuable use of your time to devote your efforts to build a donor base of individuals starting with your Board and working outward. Who do they know that would be interested in supporting your mission? When your budget allows, consider investing in an event to help boost your nonprofit's status in the community and engage current and potential donors.

Most foundations want to know that your organization has diverse revenue streams and is not solely reliant on its contributions to survive. Foundations consider both the philanthropic aspect of donating to your nonprofit and the worthiness of that investment. If you can't show that you have other revenue streams, they are less likely to support you with a grant. I recommend that nonprofits build these revenue streams for at least three years before submitting grant requests unless those requests are specific to capacity building for new organizations.

5. You do not invest in fundraising.

Lots of new nonprofit executives think that fundraising will be easy. They're passionate about their mission and expect that funds will just come pouring in. In 2020, there were approximately 1.3 million nonprofit organizations in the United States. In the most recent data from the National Center for Charitable Statistics, the number of new nonprofits in 2016 was a 4.5% increase over the previous ten years. That's a lot of competition. And it's not slowing down.

Taking the chance that the couple of hours a week you can devote to fundraising on top of all of the other hats you wear as a nonprofit executive may result in repeated disappointment. Often investing in fundraising is seen as unnecessary or something they're forced into. However, professional and strategic fundraising is the absolute lifeblood of any nonprofit. We've all heard the old adage, "You've got to spend money to make money." What is true for businesses is true for nonprofits. Without fundraising, your nonprofit encumbers the risk of being reliant on fees from clients, which is rarely enough to sustain the general operating expenses of a nonprofit that is growing and thriving to meet the needs of its community. Fundraising, done well, can take your nonprofit to the next level of success and is an investment that pays off over time. With well-built and developed relationships, nonprofits can anticipate growth into the future in partnership with individuals and foundations that support their mission with a common goal.


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