For many nonprofit organizations and startups, fundraising is that all-important task that determines whether your charitable or entrepreneurial dreams become a reality. Many wonderful ideas for businesses or nonprofits don’t get off of the ground because of lack of funding. While persistence is a necessary element of fundraising, simply avoiding common fundraising mistakes can speed up the process considerably. Here are three respective fundraising mistakes for nonprofits and startups to avoid.
Nonprofit Fundraising Mistakes
One of the most common nonprofit mistakes is asking for money too soon. For example, many nonprofits ask for a donation the moment that someone connects with them on social media. Unfortunately, it can put people off when you ask them for money two seconds after saying “hello.” A better practice that’s more likely to elicit eventual financial support is sending a friendly greeting message, perhaps with a link to further information about your organization. Cultivating relationships usually pays off better than blunt, immediate requests for money.
Another error that nonprofit fundraisers sometimes make is asking, not for too much, but for too little. You’ve probably missed a major opportunity if your prospective donor replies to a request with, “Can you really accomplish anything with that little amount of money?”. This type of question indicates that they were probably willing to give more financially. However, they may be less inclined to give anything if they get the impression that your nonprofit lacks realistic assessments of financial needs.
Nonprofits are frequently guilty of taking a haphazard, short-term approach to fundraising. It helps to view your organization more like a business, with the charitable efforts your nonprofit makes as the commodity marketed to donors. Just as a for-profit business needs a solid business plan, nonprofits also need a solid, organized fundraising plan. Make sure to include things like long-range need calculations, and multi-channel efforts to cultivate and maintain donor relationships.
Startup Fundraising Mistakes
Entrepreneurs often make the mistake of overvaluing their startup idea, leading them to ask potential investors for an unrealistic or inappropriate amount of startup capital. While the mistake may be an honest, it’s still a serious one. Asking for more than your idea is really worth can lead investors to think that you either lack business acumen, or are looking to line your own pockets beyond what you really need to get your startup going.
Another common mistake is a lengthy pitch. It’s a good idea to remember the concept of an “elevator pitch.” If you can’t present a convincing pitch for your startup idea in less than a minute or two, then it needs improvement. Most venture capital investors consider their time a very valuable commodity, and don’t want it wasted. You need to be able to communicate your startup idea and its unique appeal in just a few sentences.
Don’t try to garner investor attention without doing market research. Business investors expect to see some figures that reflect reasonable projections of market size, sales, revenues, and profit. You have to show up with something a lot more solid than just, “I think a lot of people would buy this.”