How to Increase Your Charity’s Fundraising Profit

In the non-profit world, we don’t always often talk in terms of “profit.”  That word is usually reserved for the business world… and we who work in charitable development often deride profit as something evil, proud that we work for a mission-centered organization.  If you think this way… stop!  It could be seriously hurting your group’s fundraising efforts by allowing you to focus on the big picture without looking at the details.

If you want to maximize your non-profit’s fundraising revenue, you can’t be afraid to say the word “profit,” and you can’t be afraid to get your hands dirty and look at the nitty-gritty of your fundraising efforts.  Increasing your fundraising profit is all about cutting wasteful spending, maximizing revenue, and focusing on the details.  Entrepreneurs will tell you that the margins matter – imagine how much more good your organization could accomplish if you could cut your costs by 3% and raise your revenue by 4%!  That kind of improvement takes detail-oriented work.

First, Minimize Your Costs

The first step to maximizing your fundraising profit is minimizing your group’s costs.  Take a close look at your budget… go line-by-line.  Where can you cut some fat?  Where can you negotiate with vendors?  Where can you get volunteers to do work that you currently outsource to paid contractors?

Then, Maximize Your Revenue

The next step in increasing your fundraising profit is maximizing your revenue.  Take out your fundraising plan (you do have one, don’t you?  If not, read How to Write a Successful Fundraising Plan).  Look through each strategy you are pursuing this year.  For each item, ask yourself, “How can we raise 5% more here?  10%?”  For example, if you host an annual event that raises $100,000 each year, how can you raise $105,000 this year?  Sell one more sponsorship?  Sell 50 more tickets?  Add a raffle?  Complete this exercise fore every tactic in your fundraising arsenal.

Finally, Test!

Testing development results isn’t something most non-profits are good at.  Neither is doing a cost/benefit analysis to look for fundraising tactics that just aren’t pulling their own weight.  If you really want to maximize your fundraising profit, you’ll need to do both.

Start by testing new strategies for raising money… what works?  What doesn’t? Often, you can do this with extremely low costs.  For example, if you are thinking about holding a walk-a-thon, but aren’t sure if it will succeed, send out an e-mail to your board, newsletter list, staff, and supporters asking who will commit to a walk.  Tell yourself that if you don’t get a certain number of responses, you won’t pursue the walk.

In addition to testing, your organization should take a hard, cold look at all of your tactics to make sure the expected revenue is worth your expected outlay of time, money, and resources to make the tactic happen.  For example, if you hold an annual bake sale that raises $5,000, how much time does it take to put on?  Could you raise more if you spent that time on other activities, such as fundraising calls or a major event?  Evaluate each of your tactics to see what should be kept, and what should be discarded.

Completing the above steps to maximize fundraising profit is a key task that every school, church, and charity should perform at least once a year.