How to Get Donations: A Complete Guide for Nonprofits

If you want your nonprofit to succeed, this is the only expert guide you’ll need. Read to learn everything about donations for nonprofits.

The more successful you are in gathering donations, the more help your nonprofit can offer to the cause that matters to you the most. Knowing who to reach out to and how to approach them is an important part of keeping your nonprofit relevant.

To help you get more donations for your nonprofit, I’ll discuss some donation basics, such as the different types of charitable donations and which might work best for your organization. I will also teach you some great ways to go about seeking them out, and how best to craft your appeals. We’ll even touch on the tax side of things to make sure you’re covered there, too.

Collecting donations isn't always easy, especially with so many other nonprofits competing for donors' attention. That’s why I’m here to help!

Donation Basics

Successfully gathering donations requires a fair bit of time, effort, and creativity, but the most important thing is to know where to look.

In Giving USA 2022: The Annual Report on Philanthropy for the Year 2021, an estimated total of $484.85 billion of donations were given to nonprofits in 2021 by individuals, bequests, foundations, and corporations. The majority of that has been sourced from individuals.

Charitable donations increasing in the US

In this section, I’ll give you a full rundown of what donations are, what they are not, and what kinds of donations you might want to look into. 

What Is a Donation (and What Isn’t)? 

A donation is a charitable gift of cash, goods, or services, made to a nonprofit organization to help it achieve its goals. While donations make up a significant part of most nonprofits’ funding, many often make use of other types of funding as well. 

The key distinction between donations and other funding options is that donors don’t receive anything in return for their donations. In other funding methods, there are either specific terms attached, or a simple exchange of stock, goods, or services involved. 

Different Types of Donations 

Donations to nonprofits can take on various shapes and forms. This can range from the most obvious type of donation, meaning monetary donations, to donations in the form of second-hand items, services, or even donors pledging to make a donation in the future. Let’s take a look at the five main types of donations that nonprofits typically receive.

Types of donations

Money

Monetary donations fall into two categories: one-time donations and recurring gifts.

A monetary donation is considered a one-time donation even if a person donates multiple times each year, so long as their donations weren’t on a predetermined recurring schedule. 

When a donor commits to a fixed, recurring schedule of donations, this is considered a recurring gift. Recurring gifts are a great way to create a more consistent and predictable flow of funding for your nonprofit, as you have a clearer oversight of the amount of money you can expect to flow into your organization in a given time period. 

In-Kind Donations

In-kind donations are a non-monetary type of donation where individuals or businesses donate an asset or service. In-kind donations generally tend to take on one of these two forms:

  • Goods: Physical or virtual items that you can use directly for your nonprofit or pass on to help others. For example, an individual or business could donate office supplies, such as computers and other essential hardware or software, that your nonprofit could directly use to work toward its strategy. 
  • Services: In-kind donations often take the form of professional services offered either pro-bono or at a discounted rate. Some examples of services donated in kind could be legal services, accounting services, or electric or plumbing services for your nonprofit’s workspace. 

Another type of in-kind donation is when a person or organization offers to pay for a service on behalf of your nonprofit, for example offering to cover all its legal fees for a year.

In-kind donations are an important form of funding for your organization that can lead to significant savings. Essentially, you receive goods or services which you would have otherwise needed to purchase, helping free up some of your budget to spend elsewhere.

It’s worth noting that in-kind donations don’t necessarily need to be used directly by your nonprofit. Oftentimes, these donations will be used to benefit the cause you’re trying to help. For example, a supermarket could be donating food that you can then give to people in unprivileged communities, or a laptop manufacturer could donate computers for children.

Unfortunately, opening the door to in-kind donations can have some downsides. You may end up receiving products or services that aren’t relevant to the needs of your organization. Even if they are useful, sometimes obtaining them might be tied with a significant cost, be it time or money. 

While most donors’ hearts are in the right place, you may get items that are low quality, unneeded, or simply products that someone else wanted to get rid of. 

This is why it helps to set firm guidelines before ever accepting in-kind donations – put them on your website or in the description of related donation drives and don’t be afraid to turn down donations that may not be helpful to your mission.

Second-Hand Donations

Second-hand donations can be items such as clothes, office equipment, furniture, etc. 

If your organization accepts this type of donation, make sure that you specify the types of gifts that you are willing to accept. Consider accepting second-hand donations that could go toward several purposes: 

  • Items that your nonprofit has direct use for, for example, office equipment or furniture
  • Items that your nonprofit can sell to raise money, for example at an auction or thrift store
  • Items that your nonprofit can pass along to contribute to the community or cause it’s supporting

It’s important to emphasize that the items you accept need to be in good condition. Otherwise, you could end up with extra work and nothing to gain from it.

Stock Donations

Stock donations offer a few benefits to both your donors as well as to your nonprofit. 

Normally, if your donors choose to sell their stock for cash in order to donate to your organization, they would be liable to pay capital gains tax on this sale. However, by donating the stock directly instead, they can avoid having to do so. 

From your nonprofit’s perspective, you can claim a charitable deduction equal to the fair market value of the stock, and avoid any capital gains tax you would have paid if you sold it directly. 

Planned Gifts 

Planned gifts are a type of contribution from individuals that are arranged in the present and donated at a future date. This typically happens through a will or trust once the donor passes away. 

Although planned giving is about cultivating long-term relationships with donors and won’t benefit your organization immediately, it represents a significant and often overlooked portion of donor gifts, and its scope and size make it worth waiting for. 

Planned gifts generally take on the form of either cash or non-cash assets, and tend to be executed through one of the following arrangements: 

  • Charitable gift annuity: A charitable gift annuity is an agreement between a donor and a nonprofit, where the donor gives a large sum of money to the nonprofit, and the nonprofit then pays the donor a set annual income from that sum for a set period, or till the donor passes away. Any leftover funds after this are kept by the nonprofit.
  • Charitable remainder trust: Similar to a charitable gift annuity, a charitable remainder trust is a trust gifted to a nonprofit, which then pays an annual amount to the trustees. The nonprofit retains funds that remain after the trust is complete. If the amount paid each year is a fixed amount, this is known as a charitable remainder annuity trust; and if the amount paid each year is a percentage of the remaining trust fund, this is known as a charitable remainder unitrust. 
  • Charitable bequest: A charitable bequest is when a person makes an official statement in a will, trust, or estate plan to assign a gift to a specific nonprofit organization when they pass away. This gift can be an exact amount of money, a percentage of the donor’s wealth or estate, or a remainder of what they have left after having assigned their other bequests.

Collecting Donations from Individuals vs. Businesses

Seeking out donations from individuals and from businesses are two entirely different beasts, from how you receive the donations to the ways you can request them. 

Giving USA’s annual reports on charitable donations in the U.S. show that individuals make up the largest source of charitable donations, making up 67% of the total in 2021. 

Charitable donations by donor type in 2021

While donations from businesses only made up 4% of the total charitable donations in 2021, this is still a significant amount of money, at $21 billion. Targeting businesses may become an important part of your funding strategy, too.

Let’s take a look at some of the ways nonprofits typically receive donations from individuals and businesses. 

Collecting Donations from Businesses

Businesses often have corporate social responsibility and philanthropy initiatives, and your nonprofit can benefit from these programs. Here are two common ways businesses donate to nonprofits. 

  • In-kind donations: Businesses often opt to contribute goods or pro-bono services in lieu of a cash donation.
  • Matching gifts: This is a type of corporate donation program that many businesses use. This program encourages employees to donate to an eligible nonprofit from a list compiled by its management, after which the company matches the employee’s donation, essentially doubling the contribution. 

Collecting Donations from Individuals

Collecting donations from individuals can be the best source of funding for your nonprofit. The key is to approach them in the right ways and build strong relationships with your donor base.

There are two main ways people donate:

  • Online donations: An online donation box, crowdfunding, and mobile donations are forms of online donations that make it easy for prospective donors to instantly donate to your cause. 
  • Offline donations: Offline methods such as phone calls, direct mail, and in-person are fundraising strategies that nonprofits swear by. These methods are powerful as they enable your fundraisers to reach people that may not have come across your organization online. 

Individuals sometimes opt to donate larger amounts. These are known as major gifts. A major gift is a donation of a significant sum, meaning one you typically ask for in a one-on-one setting from a donor you know has been a loyal supporter of your cause over a long period of time.

Finally, individuals can pledge to donate large sums of money over an extended period of time through planned giving. Refer to the “Donation Basics” section for a deeper dive into the different types of planned gifts.

Reactive Fundraising vs. Proactive Fundraising

The term “reactive fundraising” refers to a fundraising management style that relies mostly on – you guessed it – reacting rather than predicting. 

This means that instead of planning your donation strategies ahead of time, you wait for opportunities to show up and then act on them. It can also mean waiting for the need for extra funding to arise instead of trying to keep the funds coming on a steady basis.

Proactive fundraising is the opposite of that – it refers to pre-planning and taking charge. While there may not be a particular cause that needs you to raise more money, and you may not have any exciting opportunities on the immediate horizon, proactive fundraising means that you sow the seeds that will grow over time – and hopefully bring some results down the line.

In order to build and run a successful fundraising strategy, it’s important to use a proactive approach. Many nonprofits fall into the trap of resorting to reactive fundraising when they discover that their costs are higher than previously anticipated, or that their fundraising strategies didn’t raise as much as they’d hoped. 

Spending some time to plan your goals and strategies can help ensure your nonprofit is successful in its fundraising plans. It can also ensure that you’re not forced to compromise the quality of your work and scramble to meet fundraising deadlines. 

Let’s look at four ways to help you ensure your nonprofit is always financially stable, and to minimize the chance you’ll have to resort to fundraising reactively.

Understand the True Costs of Your Nonprofit

Before you can truly plan for a period of proactive fundraising, you need to have a thorough and accurate oversight of the real costs of your nonprofit. Try to consider both one-off and recurring costs, for example:

  • Salaries and benefits for your staff
  • Campaign materials, such as office and educational materials
  • Outreach and PR costs such as marketing and advertising costs
  • Hardware and software
  • Transportation and travel costs for your staff, volunteers, and/or participants 

Having a clear and intimate knowledge of your nonprofit’s running costs can help you create more realistic goals for your fundraising as well as avoid finding yourself in a situation where you need to do some emergency fundraising to cover unforeseen costs.

Upgrade Your Current Donors

A great strategy that many successful nonprofits use to proactively seek more donations is to ask current donors to donate more. 

You can ask your more loyal recurring supporters to donate marginally more, even as little as 5 to 10 percent. You can do this as often as once a year. Supporters that regularly donate to your nonprofit over long periods of time will often be happy to give a bit more.

Another strategy is to screen the wealth and philanthropic affinity of your loyal followers who tend to donate large sums. In order to do this, you can use publicly accessible charitable giving and wealth databases, such as DoubleTheDonation and DonorSearch. 

This way, you can identify people who have the means and the heart to become major donors to your nonprofit, and you can then approach them to make a major donation. 

Create an individualized pitch for them that recognizes their generosity and highlights the large impact they could have. As an example, their $50,000 donation could entirely finance a recreation center for local kids with cancer, and the center could be named after them.

When you reach out to your loyal supporters, remember to appeal to them in a way that makes them want to donate more. Little things such as thanking them for their support, showing them your progress, and explaining what their increased donations will go towards are great ways to do this. 

Reach Out to Lapsed Donors

One mistake a lot of nonprofits make is not reaching out to lapsed donors. These are people that have supported your cause in the past, and many of them may be more than willing to support it again – they may just need a push.

You can reach out to lapsed donors via email, phone calls, or even a special newsletter targeting them.  

Appeal to them by showing them your gratitude for their past generosity. If possible, try to highlight what you were able to achieve with their help. Finally, talk about the matter at hand and how much of an impact their help could have.

5 Ways to Make People Want to Donate to Your Cause 

Several studies suggest that nonprofit organizations often approach people in ways that tend to limit their generosity, rather than nurture it. Knowing how to approach potential donors the right way is the key to maximizing donations.

In this section, we’ll go over a few strategies you can use to make people want to donate to your cause, and encourage them to give as much as possible. Ideally, you want to make use of as many of these methods in conjunction as you can – they’re most effective when used together.

1. Use an “Identifiable Victim” in Your Appeals

It may seem intuitive to present facts and statistics to try and convey the scale of the problem your nonprofit is trying to solve. However, a 2016 study prepared by researchers from the University of Buffalo has shown that people are less generous towards anonymous victims (regardless of how widespread the issue may be) than they are towards specific, named victims.

An “identifiable victim” doesn’t have to refer to just one person – it can mean several people, but those people must not be anonymous. Simply put, you’ll have to tell their story.

For example, people may be more likely to donate money to save a single person in need of urgent medical treatment instead of donating to a widespread cause, such as stopping global warming or helping the unnamed victims of a massive hurricane.

This phenomenon is known as the “identifiable victim effect,” and it can have a powerful impact on prospective donors. 

This suggests that people want to feel like they can really have a positive impact on the life of a specific person, even if their donation in reality can do more than that. As a nonprofit, it’s important to take advantage of this. Remember to make your appeals convey to people that their kindness can really affect a positive change in the life of an individual victim. 

While the funds you are able to gather from donations may go towards many different things, try to highlight the help you are able to offer to these “smaller” causes, be it people or animals. Tell their story from start to finish and talk about the way these funds can help.

Let’s imagine that you are helping a dog in need of surgery that could make it walk again. To benefit from the “identifiable victim” effect, take note of how much each treatment costs and what the entire process is going to look like. Show pictures of this particular dog and talk about its traits. This will help potential donors feel more involved in this particular case and feel connected to the victim, which can in turn make them more likely to donate.

It’s equally important to report back once you’ve managed to collect the money for that cause. In the case of the dog mentioned above, check back in with your donors after the surgery and let them know how the dog is getting on. This may make them more eager to help again when another similar case appears. 

On another note, although there can be more than one identifiable victim, a study titled “Compassion Fade: Affect and Charity Are Greatest for a Single Child in Need” showed that people were willing to donate a lot more money to a single named starving child than to two named starving siblings. It may, therefore, sometimes make more sense to raise money for a single cause at a time. 

2. Emphasize the Impact of The Donation

One Carnegie Mellon University study found that, across three separate experiments, it was helpful to include fact-based information about the impact of a nonprofit.  People want to be assured that their generosity can have a tangible and measurable effect on a particular problem. Outlining the benefits of their donation can do just that.

Letting your prospective donors know the specifics of where their money will go can often nudge them toward committing to donate. Here are some ways to do this:

  • Share receipts for purchases made with the donations.
  • Showcase “happy ending” stories where the donations were able to bring real improvements.
  • For donation drives that are still in progress, show your donors the exact thing you are currently fundraising for. For example, instead of running a general donation drive to help your nonprofit, raise a smaller amount of money towards a particular cause, such as buying a new heater for a field hospital. Make sure to mention how much exactly this will cost and where you are planning to obtain it.
  • When fundraising for several things at once, talk about what exactly the money is going to go toward. For example, don’t just say “rebuilding a collapsed home.” Instead, talk about the individual cost of bricks, flooring, heating, etc.

You can combine this with the previous point about including an identifiable victim, and let donors know that their donation would positively impact a named victim in a specific way. This is a great way to make people feel driven to give to your nonprofit. 

3. Allow Donors to Pay Later

A study entitled “Time-Inconsistent Charitable Giving” found that by creating a time gap between when you ask donors to commit to giving and when you ask them to actually pay, the overall number of people who donate goes up. 

When subjects in this study were asked to give five dollars to charity today, only about 31 percent agreed. However, when asked to donate five dollars a week from today, giving increased to 45 percent – nearly a 50 percent increase. 

Time-inconsistent charitable giving

The researchers behind this study speculate that the reason for this discrepancy is that by giving donors the option to pay later, you’re letting them experience the joy of giving without immediately making them part with their money.

In order for this approach to work, participants must be made to feel the benefits of their pledge just as they would if they were to donate immediately. By thanking your donors as soon as they make their pledge, they still receive the positive reward of donating, but have its cost deferred. 

Additionally, consider offering people the option of opting out of their pledge at any point – interestingly, the study also found being given the option to back out ultimately resulted in even more people donating. 

4. Make Giving Feel Like a Sacrifice

A study entitled “The ‘Martyrdom Effect’” found that people were willing to contribute more money to a charitable cause when the process of giving involved more pain and effort. Participants of this study took part in a charity race and a charity picnic; despite generally preferring the more pleasant picnic setting, they contributed more money to the charity race.

Average donations in charity run vs. charity picnic

The researchers behind this study suggest that people ascribe greater meaning to donations that require pain and effort. According to them, this effect was most profound when charitable donations were to causes directly related to human suffering. 

To make use of this idea, emphasize the aspect of sacrifice your prospective donors make through their generosity. Particularly if you’re running donation campaigns, such as a charity race, that require a lot of effort from your donors, be sure to emphasize how important their sacrifice is – both before and after the fact.

5. Tailor Your Appeals

A great way to boost how well your nonprofit’s appeals resonate with prospective donors is to be flexible and adjust to your readers.

A study carried out by researchers from the University of British Columbia and the University of Chicago randomly assigned participants to view one of two appeals: one that emphasized agency and the pursuit of personal goals, and one that emphasized communion – the pursuit of shared goals. 

It found that when the appeals emphasized agency (i.e. “All it takes to make a difference is one person”), wealthier individuals responded more positively and showed a greater willingness to give. 

In contrast, the study found that when the appeal emphasized the pursuit of shared goals (i.e. joining forces to make a difference together), less wealthy individuals reported greater willingness to give.

A good way to incorporate these findings into your nonprofit’s strategy is to do some research on the typical demographics of each medium that you use for your appeals, focusing on their socioeconomic category. Then, create two distinct appeal messages to make sure you’re targeting both groups, or simply shift your focus to just one group. 

When targeting the wealthier group of donors, you can speak about larger amounts of money and the impact they can have. If you’re raising money to buy new sports equipment for a school, you can openly say that spending a certain amount of money would be able to buy this particular item. 

Highlight the benefits that this will bring and how all it takes is one person to change the lives of many others; in this case, the children that will be able to use the equipment.

Pitching to the more budget-conscious group of donors, it’s important to note that no donation is too small to make a difference. If enough people donate just a dollar, you will still be able to meet your goal, and those donors will still feel the joy of giving even if their individual donation wasn’t significant. 

If you’re looking to raise $500, emphasize that if just 500 people donated $1 each, the cause would be fulfilled and the lives of those who benefit from it would be changed for the better.

7 Ways to Collect Donations Online

Online fundraising is one of the most cost-effective ways to raise money for nonprofits, with a wide range of strategies you can use to appeal to potential donors. Although each individual donation may only be a small amount, remember that most of these methods can bring in massive volumes of these donations and add up to a significant total. 

Online fundraising stats

In this section, we’ll discuss some great ways for your nonprofit to collect donations online.

1. Prepare Your Website for Receiving Donations

Why a website is aa vital resource for donors

When building your website, it’s important to consider adding two crucial elements: a dedicated donation page and an ever-present donation widget.

Having a donation widget that allows site visitors to easily donate at any time, or even set up a recurring donation, is essential to getting the most out of your website. 

This will often be an embedded box, present on each page, that will let the visitor pick how much they want to donate and do it right then and there without having to leave the page they were on.

In addition to the widget, you should also have a dedicated donation page on your website that can talk about your nonprofit at length and highlight all the ways your visitors can donate.

The average conversion rate for a nonprofit’s donation page is around 17 percent, according to a 2021 report by M+R Benchmarks. As such, it’s important to make sure that it’s easy to access and the link to it is visible on all parts of your website. 

Bear in mind, potential donors are very likely to land on your website from a smartphone, so make sure your widget and donation page work well on mobile devices.

How to Set Up a Donation Widget

Setting up a donation widget is fairly easy. There are options like DonorBox and Give Lively that let you add such a widget to your website, and if you’ve used a website builder to set it up yourself, then you’ll be able to do this without a problem. Keep in mind that while Give Lively is free for nonprofits, DonorBox charges a per-transaction fee. There may also be other widgets that work with your particular builder. 

Alternatively, reach out to the person or company who helped you set up your website and ask them to add the widget – either as an in-kind donation or for a fee. 

The widget needs to be clearly visible, but not placed in a way that would annoy site visitors. It can also be a small pop-up that can be closed at any time. Try not to cover up the main body of the website – this can make readers simply close the pop-up before they consider donating. 

For widgets that are not pop-ups, put them in a place that visitors will often interact with, such as near the top of the page.  

The widget should include the following:

  • Amount of money to be donated (you can suggest some amounts and also offer the option to donate a custom amount)
  • Whether the donation is going to be recurring or one-time
  • Campaign to donate to, if you’re running several
  • The option to also sign up for your newsletter, if you have one

Make the Most of Your Website

Once your donation widget and page are up and running, here are a few things you can do to improve your conversion rate, meaning the percentage of your website’s visitors that donate to your cause.

  • Select monthly giving as the default option for donors – this has been shown to improve conversion rates by up to 35 percent.
  • Make sure that all of your web pages are branded. This means keeping everything consistent with the same design language, including logos and colors. It’s especially important on your donation page – this can help you raise up to 6 times as much money on average. 
  • Make sure your donation widget button is always easy to spot! This can improve your conversion rate.

2. Collecting Donations through Social Media 

With over 4 billion active users worldwide, social media platforms are an opportunity to connect with a massive group of potential donors that you simply can’t afford to pass up. 

Maintaining a consistent online presence will serve to build trust among your current and future supporters, expand your reach, promote events, and of course, raise funds. 32% of people who engage with nonprofits on social media end up going on to donate money.

How people take action after engaging with nonprofits on social media

Since you can use social media platforms for free, you don’t have to worry about budget constraints. However, it’s important to learn which platform will prove to be the most useful for your nonprofit. Some of that knowledge will come in time, but you can shortlist the best options initially to not spend too much time on a platform that simply doesn’t work well with your mission. 

Facebook

Facebook accounts for a large part of worldwide social media activity. While its users span all age groups, the most represented age bracket is users between the ages of 25 and 35. 

Facebook makes it easy to post lengthier stories, and because users can share your posts far and wide, it’s possible for a story to go viral – bringing you more followers, and thus, potential donors. 

In order to make the most of Facebook, the best approach is to set up a business page for your nonprofit. Next, try to start sharing stories related to your mission. It’s a good idea to make use of the “identifiable victim” phenomenon here and describe the smaller causes you’re devoted to. Posts with images tend to do much better, so try to make sure to attach one; keep in mind that a photo will have a stronger effect than an infographic.

Over time, build up your Facebook page to be a news feed of sorts for your organization – talk about each new case, share updates on previous cases, and connect with your followers.

The stories that resonate the most with Facebook readers will often be ones that are sincere and approachable. Try to avoid using big words and long sentences – you want to appeal to a large audience. 

Although you will often see this trend on Facebook, I recommend not overusing emojis and exclamation marks unless you have a good reason to do so. If every post you make is littered with urgency, your followers will quickly grow numb to it. Make sure to weave in happy posts in between those that are more serious; this will help lift people’s spirits and make them feel more engaged with your page.

If you’re experiencing low engagement on Facebook and you are not having much success in raising your follower count, you can try the following:

  • Paid ads – While not ideal, this option can help your page gather some visibility. A good idea is to pay for promoting a certain post (or several) that describes certain causes you’re fundraising for.
  • Engaging with other pages and groups – Using your business page, try to interact with other pages and groups centered around similar causes. If you post helpful or moving content, users will gravitate toward your page over time.
  • Link to your profile – Make sure that all of your social media profiles are linked on your website and vice versa. Create a web of connections between every platform you use.

Instagram

Instagram, while run by the same parent company as Facebook, has a slightly different demographic among its users. Its user base tends to lean more toward younger people, with over half of its users being between the ages of 18 and 34 years old.

As a primarily visual social media platform, Instagram is particularly powerful for sharing photo and video content, but less so for text-based content. As a nonprofit, it offers you the ability to put donation buttons on your Instagram stories, posts, and profile. 

Unlike Facebook, it’s usually better to avoid using Instagram to post lengthy stories – although those can be powerful when used scarcely. For day-to-day use, bet on the visuals instead, and add concise, but thoughtful and touching captions. Post photos that showcase your work and your mission. Bring the people or causes you help to the front and center. Make sure to leave donation links in every post.

In order to increase your Instagram visibility, you should be using hashtags. There is a bit of a middle ground to hit here, though. If you use too many, you will drown out the real purpose of your post, but if you use too few, your post may not be seen by the Instagram algorithm. 

Try to look up the hashtags that describe what you’re about to post and only use the ones that receive the most engagement. Don’t bother duplicating the same hashtag over and over with small varieties, such as using both #dogsofinstagram and #dogsofinsta.

Instagram Stories are a great way to engage with your followers, so post those as frequently as you feel like. Make sure to reply to comments frequently too. 

If all else fails, you can try using paid ads to increase your visibility.

Instagram also offers you the option to host a live fundraising event – an option well worth considering if you can garner enough attention. This simply means going live via Instagram Live and enabling a function called Live Donations, and it can be used in numerous ways.

For example, you can have a live chat with your followers. Talk about your mission and make it feel more personal than a simple post. Answer questions and, if possible, invite guests related to your mission, such as someone who currently needs help or someone you’ve helped in the past. With the Live Donations option enabled, viewers will be able to donate to your cause at any time during the live stream.

Twitter

Twitter is a great platform to share links and updates about your nonprofit’s activities and to engage with your followers in discussions. 

Unlike Instagram, Twitter is pretty easy to have a back-and-forth kind of conversation on. This makes it a good place to talk to your followers and share stories that they can respond to. 

While Twitter has a short character limit right now, you can create Twitter threads to tell a longer story. When doing so, make sure to indicate in the first tweet that there is more to come so that the readers will know to click on your message and expand the rest of the thread. Consider adding an image to the first tweet to increase visibility.

Using hashtags on Twitter can be as helpful as it is on Instagram, but similarly, you shouldn’t overdo it. Settle on a few hashtags that best describe your tweet.

Generally, for your post to be seen, you will have to build up a follower count. Doing this on Twitter can be tricky, but you can make yourself visible by engaging with other, bigger accounts. Reply to their tweets in thoughtful ways and engage in discussions that emerge from your responses. Follow worthwhile accounts – some may follow you back, and the more followers you have, the more likely it is that they will engage with you. 

Like any other platform, you can pay for your posts to be promoted, but they will appear as sponsored tweets instead of just regular content.

To maximize the donation potential of Twitter, it’s a good idea to use Twitter threads to tell a longer story – but the link to donate should be visible right in the first tweet. Use that first tweet to deliver a strong message and share the donation link, then delve deeper into the topic in the tweets that follow. 

LinkedIn

In contrast to Instagram, LinkedIn’s average demographic tends to skew more toward older business professionals,– with around 60 percent of its user base falling between the ages of 25 and 34 years old.

LinkedIn can offer your nonprofit a great opportunity to build your online presence. You can also seek out potential donors and network with them. 

You can even host live streams with LinkedIn Live. Whether that’s a fundraising event or a panel discussion, it’s a great opportunity for you to connect with your followers.

Once you set up your LinkedIn page, ask your staff and even your followers on other platforms to follow it. People who work for your organization should add it to their profiles. From there, it’s all about creating relevant content in order to increase awareness. LinkedIn is best geared towards in-depth text-based content that can offer some insight into your organization.

Successful activists and nonprofits on LinkedIn often share inspirational stories in order to engage with the community at large. This is the place to talk about some of your biggest wins and highlight the ways in which your followers can change lives. Focus on identifiable victims, make sure your donation links are easy to see in the post, and try to speak candidly. 

A good way to learn how to write good LinkedIn posts is to follow similar nonprofits and see the kind of content they share. It’s important to post regularly in order to build engagement. 

3. Social Media Influencers

Social media influencers have massive networks of followers who value their opinions on the types of products, brands, and charitable causes that are worth supporting.

If you can find an influencer to work with, both you and the influencer can benefit from this cooperation. For your nonprofit, this can mean exposure to a massive number of potential followers; for the influencer, the benefit will usually be that they can share a cause they care about with their followers – this helps their public image.

Regular businesses pay influencers in order to advertise their products. As a nonprofit, it’s better to try to find someone who will donate their time and exposure. You can, of course, pay someone to advertise your nonprofit, but if you dig deep enough, you may be able to find someone who will do it for free.

You can search for influencers on Google or head to platforms like Facebook, Instagram, and Twitter, search for people who have shown an interest in similar causes to yours, and see who they’re following.

Following celebrities and influencers with similar interests is always a good idea. For example, if you run an animal sanctuary, you might see someone posting about animal rights on their page. From there, you can reach out to them – be it through comments on their posts or directly – and talk about your mission.

You’ll need to plan out your influencer cooperation in order to maximize its effectiveness. Here are a few tips that can help you get the most out of your influencer collaboration:

  • Nurture relationships with your influencers: Don’t just treat your influencers as means to an end. Establish common ground and find out what your cause means to them. Consider posting on your social media about the influencer’s history of generosity, inviting them to your events, or offering them branded merchandise. 
  • Offer them the tools they need: Spend as much time as needed to make sure that the influencer knows your organization in and out.  Educate them fully about your nonprofit, such as what it has achieved so far and upcoming campaigns. Provide any images, graphics, and data they can use. 
  • Link to donations: Make sure every influencer post links clearly either to your donation portal or to their own fundraising page on behalf of your cause. While spreading awareness is great, adding a link to directly donate is the most important thing.
  • Don’t give up: Not all your relationships with influencers will work out – don’t be demoralized. Move on and work on finding a new influencer to work with. Ultimately, you have a lot of gain from building and nurturing these relationships, so it’s always worth a try.

4. Crowdfunding 

Crowdfunding is a powerful tool that involves getting as many people as possible to each make a donation. In recent years, crowdfunding has become an increasingly common strategy among businesses and nonprofits alike, due to its low costs to run and its potential to raise substantial amounts of funds. 

According to Fundera, $17.2 billion are raised through crowdfunding annually in North America alone, and this number has been steadily growing each year. 

Crowdfunding stats

Although managing a crowdfunding campaign can be time-consuming, it’s well worth the effort. Remember to tell a story for your crowdfunding appeal, and try to incorporate the approaches discussed previously in this guide, such as using an identifiable victim and appealing to your potential donors’ emotions and sense of empathy. 

To maximize the effectiveness of your crowdfunding campaign, you’ll need to get the word out about it on as many channels as possible. Share its details via email and on social media, and post regular updates about it. Don’t forget to ask your followers to share the posts as well. 

Crowdfunding Types

There are two types of crowdfunding campaigns: either participants receive rewards in return for their contributions, or they donate to a cause without getting anything in return. 

The second type is common among nonprofits, but if you’d like to offer rewards, you can ask local businesses if they’d be willing to donate products, services, or even discount coupons. This is a great way for businesses to give something back to the community while also getting their own name out there.

The Best Platforms for Crowdfunding As a Nonprofit

There are many crowdfunding platforms out there. These are some of the best:

  • GoFundMe – GoFundMe is widely known and trusted by many donors. It’s an approachable platform because it doesn’t take a cut from you for starting a campaign. However, it charges a 2.9% + $0.30 fee for each transaction, automatically deducted from the donation. 
  • Fundly – While GoFundMe has seen some massive donation campaigns, Fundly is often used for smaller causes, such as gathering money for classroom supplies. It doesn’t have a platform fee, but it charges a fee for each transaction: 2.9% of its value plus $0.30.
  • FundRazr – FundRazr offers a fair bit of flexibility. You can use the Simply Free model to only pay the payment processing fee; the Nearly Free model to ask your supporters to cover the 5% platform fee; or the Not Free model where you’re the one to cover the 5% fee yourself. Some campaigns make the funds available immediately (the Keep It All campaign) while others (All or Nothing) only release them when you reach a certain fundraising goal.
  • JustGiving – This is a popular platform that can help you raise money for many different causes as long as the cause has a positive impact on others. The fees that it charges vary by location and can reach as high as 2.9% + $0.30 for each transaction.
  • IndieGogo – IndieGogo is available for both nonprofits and for-profit organizations and it lets you host a wide range of different campaigns. It charges a 5% platform fee, and each transaction also comes with a 3% + $0.30 fee. Funds are available within 15 business days. 

When to Use Crowdfunding

Knowing when to start a crowdfunding campaign comes down to choosing between reactive and proactive fundraising.

It’s not a good idea to start a campaign when your bank accounts are nearly empty and you’re stuck. Gathering money takes time – your campaign may take a while to pick up traction and you may also not receive the funds right away.

You can use crowdfunding to gather money for specific cases, such as a single identifiable victim in need of help right away. However, while those funds can go toward that cause, you shouldn’t rely on crowdfunding to front the money for it – unless the cause is a long time away.

One example of crowdfunding for a future cause is trying to gather money to cover surgery or treatment. The sums are often so high that the treatment can only proceed once enough money has been gathered.

If an emergency comes up and your nonprofit steps in to help, you may have to cover the cost from your own funds and then crowdfund to try to recover the money spent. 

The end of the year is the best time to set up a crowdfunding campaign. According to Network For Good, 29% of online giving took place in December, and the last three days of the year amounted to a total of 11%. 

5. Using Video Platforms to Collect Donations 

Video marketing can be an effective, yet affordable way for nonprofits to reach a wide audience of people and collect donations. YouTube is the most popular video platform for longer-format videos, while TikTok is the leading platform for short-format videos. 

Using video platforms to collect donations

If you’ve decided to try a video campaign, it’s a good idea to create multiple videos that focus on different aspects of your nonprofit’s goals and activity. You could use videos to introduce your staff and give your followers a glimpse at the real people behind the organization. 

When you’re using video content to collect donations, it’s important to include a CTA (call to action). The simplest wording, such as ‘Donate now,’ often works best. 

6. Holding an Online Donation Event

Another unique way to gather funds involves hosting an online donation event. This is typically a live stream that your followers can participate in, be it through watching and asking questions or engaging with your nonprofit in some other way. 

Charity online events are fairly common, but they won’t work for every kind of organization, because a successful online event requires a certain number of followers to take off. You’ll see the biggest benefit if you have an established following on a platform that supports live streaming.

If you have a younger following, you can consider hosting a charity gaming live stream – or teaming up with a gaming guru and having them host it for you. During the event, followers will donate money, and when certain donation thresholds are met, the streamer often does something fun, such as perform certain tricks in the game.

A similar kind of stream can work for any platform. For example, you can host online watch parties to gather funds or a fun charity stream. This is where you and your staff or volunteers will answer questions, draw, or do something else creative when the donations are pouring in.

Use some time throughout the stream to tell the story of the cause you’re gathering money for, and if the stream runs for a long time, make sure to periodically remind newcomers about the key parts of it. In addition, ensure that you’re always keeping a donation link handy so that people can donate at any given time.

7. Email Marketing

Email marketing, if done right, can be an effective way to collect donations. Here are some good practices:

Build a Solid Mailing List

Growing your list can take some time, but it’s well worth the effort. You can include past donors and supporters, provided they’ve given you permission to email them.

Make sure it’s easy to spot the signup form on your website and other platforms, and encourage your social media followers to sign up as well.

Send Out Interesting Content

Even if your main goal with email marketing is maximizing donations, it’s a good idea to add some variety to your emails.

You can send out periodic updates about your progress, general news pertaining to the area your nonprofit is operating within, invitations to events, and of course, donation appeals.

Try not to make each and every email a cry for help. Share your ups and downs and make people feel involved in order to turn them into long-term supporters.

Craft Emails That Convert

  • Use a strong subject line – This is your one chance to make your reader open the email. Remember that readers often get dozens of emails every day, so your subject line needs to stand out. 
  • Personalize your messages – Many email marketing services will let you collect data on your subscribers, such as their names and locations, and use them in your emails. People are more likely to read a message that speaks to them directly.

  • Include a clear CTA – Add donation links and a call to action that incites the reader to donate. You can also add links to directly donate pre-set amounts of money.

5 Ways to Collect Donations Offline

In this section, I’ll examine some common offline fundraising methods and talk about how you can make the most of them. 

1. Hold a Fundraising Event

In-person events are a great opportunity to strengthen your relationships with your supporters.

Events are one of the key sources of major donations for nonprofits, with ticketed events accounting for the largest share of donations above $1,000 as per The State of Modern Philanthropy 2021 report.

Donation sources in 2021

The exciting potential of in-person events comes at a cost – they’re far harder to plan and more expensive to execute than many other fundraising methods. 

Let’s take a look at some of the most popularly used offline event types as well as how to make them work for your organization.

Ticketed Events

Ticketed events are an effective way for you to raise money towards your goal through ticket sales, all the while providing your current and prospective donors with entertainment. Some creative and fun options for ticketed events you could organize could be a movie night, a networking breakfast, a trivia night, or a class. 

Auctions

Charity auctions can be a good way to raise some extra money.  Depending on the size of your nonprofit, this can mean massive auctions worth thousands of dollars, smaller events with cheap items, and anything else in between.

Most nonprofits turn to their supporters in order to source items to sell. These things don’t necessarily need to be in any way related to your mission, just as long as they aren’t somehow damaging it. You can collect pretty much anything your followers are willing to give away, ranging from clothes to electronic devices, homemade cakes, or vouchers to be used at a beauty salon.

An auction can involve a fair bit of planning – you’ll have to find a venue,  promote the event, and host the actual auction – either yourself or by booking a host..

Raffles

A raffle can be even more fun than an auction, and in a way, it can also be more profitable – provided you’re able to sell enough tickets.

The prizes can include branded merchandise, items you’ve received through donations, or in-kind donations such as various services from allied businesses.

Much like an auction, hosting this event will require some pre-planning. While an auction can be a self-contained event, a raffle event will usually involve various other fun activities. Some options include:

  • A game night or a movie screening (you will have to obtain a license to show a movie to a larger audience)
  • A display of items made by those you support, or a show of their talents, such as a concert or a sports event
  • Activities for children, such as face painting or a bouncy castle

For the activities, it’s a good idea to reach out to local businesses to see if they’d be willing to contribute.

Charity Walk or Run

Participating in a charity walk or run can make your supporters feel more in tune with your mission than ever. Through their hardship, your nonprofit can benefit in many ways. It’s not just about collecting money from participants, who usually pay a fee to sign up, but also their families and friends who will be supporting them on their run.

Don’t underestimate the power of advertising that comes from hosting such an event, too. Your organization’s name will be front and center throughout the run, and if it takes place in a city, a lot of passersby may be able to hear about your nonprofit for the first time.

Organizing such a run will require you to consult local authorities in order to make sure it’s safe for everyone. You’ll have to discuss blocking off certain roads, ensuring everyone has access to medical assistance, and setting up banners ahead of time. If you have the funds and the time to dive deep into this, the results can be tremendous.

2. Place Donation Boxes in Local Businesses

Physical donation boxes are a cheap and simple way to raise money with the help of local businesses. 

Many nonprofits write off this method as ineffective due to each donation not being much in and of itself, however, it can add up. 

Here are some tips:

  • Target stores with heavy traffic: Reach out to businesses that see large numbers of customers, such as supermarkets, coffee shops, bakeries, and convenience stores. Focus on stores that see a lot of cash payments.
  • Avoid businesses with tip jars: You don’t want to be competing with someone’s tips. 
  • Share your goals with the business manager: Give them some insight into your cause, mission, and what you hope to achieve. If you can get them to feel a personal connection to your cause, they may want to do even more to help.
  • Include a QR code on your donation boxes: Make it easy for shoppers to donate later by providing a QR code that links to your website.

3. Collect Donations from Passersby

We’ve all seen people gathering money for a cause out on the streets, and there’s no reason why your nonprofit can’t give it a try, too. Make sure you’re familiar with the local laws before you start.

Your volunteers will need to be well-informed about the inner workings of your nonprofit. Equip them with donation tins or a way to accept credit card payments. 

It’s a good idea to set up a booth in an area with high foot traffic, such as near a subway and train stations or a supermarket. Consider putting up a poster to attract more attention.

While asking for donations, it’s important to be outgoing, talkative, and confident. Coming on too strong is a bad idea – it’s important not to make the passersby feel trapped or annoyed by the request.

When approaching people, the first pitch is crucial. The person asking should introduce themselves and quickly talk about the organization. An example would be, “Hi, I’m James, I work with the Sports for Kids charity foundation. We’re gathering funds to buy sports equipment for underprivileged children. Can you spare a moment to talk about our mission?”

4. Door-to-Door Fundraising

Door-to-door fundraising can be a challenging and sometimes demoralizing task for your volunteers – they’ll likely be turned away more often than not. It can still be an effective strategy, though, as it puts your organization’s name on the radar of every household you visit, and spreads awareness of its mission. 

Plenty of people that initially decline to support your cause may go on to donate later after having done their research.

Here are a few useful tips that your volunteers can use to help you get the most out of your door-to-door fundraising. 

  • Get permission: Be sure to check the requirements to start doing door-door-door fundraising in your area.
  • Perfect the elevator pitch: Volunteers will only have a short moment to introduce your nonprofit. The key here is to convey as much information as possible in a sentence or two.
  • Work with your fundraisers: Training always helps. Host a workshop for your volunteers where different scenarios can be played out in a safe environment and they can learn to tailor their approach to the person they’re speaking to.
  • Hand out flyers: If the person can’t talk right now, your volunteers can offer them a flyer to read in their spare time.
  • Be gracious when told “no”: It’s important to smile and wish the person well instead of being annoyingly persistent.
  • Emphasize your progress: Let people know about funds you’ve already secured and work you’ve already done – this could make them more likely to consider contributing.

5. Cold Calling

Cold calling, which is simply a form of telemarketing, is a tried-and-tested fundraising method among nonprofits. Typically, nonprofits obtain phone numbers of households from local house lists. 

Cold-calling can be a great way to encourage a sense of urgency among potential donors and raise money quickly and effectively; however, it can be a difficult strategy to pull off successfully for your staff and volunteers. 

Here are a few tips that you can incorporate into your cold-calling strategy to help your organization get the most out of it. 

  • Ask if it’s a good time to talk: Many might say it isn’t, but people will appreciate your asking. If it’s not a good time, ask if you can call again and try to find out when would be convenient.
  • Introduction: Instruct your volunteers to introduce not just the nonprofit, but also themselves. 
  • Be flexible with your script: It helps to have a script prepared, but allow your fundraisers to drop it if the call requires it. Try to build a rapport with potential donors. This means letting them speak and tell their story if they want to, making jokes, and showing empathy. Adapting to the situation is the key here.
  • Be succinct: The goal is to introduce your mission and ask for donations quickly – no one likes to be on the phone with strangers for too long. Once again, perfecting the elevator pitch is important here.
  • Ask for the contribution: You can direct them to your website to do so. Another option is to take down their card details over the phone and process the payment with Pay.com.
  • Show gratitude: Regardless of whether or not the call results in a donation, thank the potential donor for taking the time to talk to you and for showing interest in your cause.

Donations from Businesses

Among other advantages, businesses can sometimes donate in ways that individuals cannot, such as providing your nonprofit with various supplies or services free of charge.

Here’s how to approach businesses and make them want to donate money, goods, and services to your cause.

How to Reach Out to Local Businesses

Unless your nonprofit is global, approaching local businesses is a logical first step.

Identify Potential Allies

Try to find businesses that may have something in common with your nonprofit or are aligned with your mission in some way. Similarly, if you know of local businesses that have an interest in charitable donations, add them to your list.

Prepare Your Pitch

When trying to appeal to smaller businesses, a personal touch is a good idea. Going to the location in person and talking about your cause directly to the owner or manager can be the best way, provided you’ve prepared your so-called elevator pitch ahead of time.

Meeting the business owner in person gives you a bit of room here. Start by introducing yourself and talking about the nonprofit. 

Describe the problems you’re trying to solve and bring the most important parts to the forefront. At the start, don’t focus on what you’ve already done; instead, emphasize what needs to be done and how they can help.

Present the Benefits

When asking for donations from a business, you should still follow the best practices we’ve talked about in this article. Talk about your organization, your mission, and the identifiable cause – if there is one. Highlight the impact a more sizable donation could have.

However, when talking to a business, it’s also important to talk about the potential benefit for them. While many donate out of the goodness of their hearts, you can offer a tangible benefit in return for their donation, such as mentioning them on your social media and letting your followers know that this business just helped you tremendously. It can help drive some customers in their direction, and in turn, encourage them to donate again.

How to Reach Out to Corporations

Local businesses can become powerful allies, but a corporation is usually capable of donating a larger sum in one go. Also, corporations may be able to donate more than just money.

Reaching out to corporations is often trickier than simply walking into your local business. Here are a few things to be mindful of when you try.

Do Your Research

In addition to identifying potential corporations to reach out to, look into finding a potential contact at each of them. A bigger business may have a certain chain of command you’ll need to go through before being able to talk about your nonprofit. In these cases, try to reach out to someone responsible for public relations and marketing and move up from there.

It might be difficult to find a good point of contact in larger organizations. Look up the corporation on LinkedIn and see if you can find any person responsible for public relations or charitable giving. 

You can also search directly on the company’s website – some will have a dedicated section that covers these topics, which may also be a good indication that the corporation has an interest in charities.

If all else fails, every corporation will have a generic email address that you can send your pitch to. Unfortunately, the likelihood of getting a response is rather low here, so you’re better off trying to contact specific people instead.

Write It All Out

It’s possible that the first time you reach out, you won’t be scheduling a meeting with anyone. Instead, you’ll have to capture their interest with a pitch in an email or a slideshow.

Follow the tips we’ve talked about above. Be concise, but make sure you’re presenting the most important points. Highlight the benefits of collaborating with you, and talk about specific numbers, such as follower counts or unique website visits per month. If the corporation donates to your cause, you’ll be able to return the favor by making sure your followers know about it.

A good way to go about this would be to send out a quick email pitch that focuses on what you do and what you need, but also attach a presentation that offers a deep dive into your nonprofit, your mission, and the way the collaboration could work. This pitch needs to be personalized for each new corporation you reach out to.

Employee Donation Programs 

Setting up an employee donation program can be a solid way for a business to build engagement among workers while gathering money for a good cause.

Whether it’s you, your staff, their families, or your followers, pretty much anyone can try to set up an employee donation program. In some cases, the business will then match the donations and rack up a higher sum. Other times, the donation will be non-monetary.

Make it clear what kind of items you might need for your cause. If money is the only thing you need, be sure to specify that.

Ways to Encourage People to Keep Donating to Your Cause

Recurring donations are one of the most sustainable and consistent forms of donation-based income for most nonprofits. According to a recent M+R Benchmarks report, monthly donors give up to three times as much as one-time donors do. 

Recurring donor stats

As a nonprofit, your goal is to turn as many of your one-time donors into recurring donors as possible. This is commonly an uphill battle for many nonprofits, but we’ve got some ways to make it possible for you.

Stay In Touch with Past Donors

Send tailored emails to your one-time donors and your recurring donors to thank them for their contribution and emphasize the impact of their help. This will strengthen your relationships with them and make them more likely to donate again or even become recurring donors.

Offer a Membership Program

Creating a membership program is a great way to encourage your supporters to set up recurring donations and get involved with your nonprofit. 

Typically, membership programs are monthly or annual. They offer various incentives, such as special online badges, promotional merchandise, insights into your organization, or a chance to visit your nonprofit and get a glimpse into its daily activities. 

In addition, you can encourage people to give more each month by creating different levels for your membership program and offering extra incentives or perks for higher levels of giving. 

Other Ways to Get Funding for Your Nonprofit

Some forms of funding that nonprofits turn to outside of charitable donations are foundation and government grants, equity fundraises, sales of goods and services, and fees raised from membership programs.

Remember that your organization may need to meet certain requirements to implement some of these funding methods, and it’s important to consider whether or not these requirements align with your overall mission and values. 

Here are a few non-donation-based funding strategies:

Selling Goods and Services

You could consider selling branded merchandise such as t-shirts or tote bags, handmade items such as baked goods or crafts, or services such as in-house language or writing classes. 

If your nonprofit’s mission is to support a specific community, having people from that community bake cookies or create handicrafts is a great way to encourage people to offer their support by purchasing these items. 

In order to sell goods or services without being liable to pay sales tax, what you sell must be directly related to your organization’s cause. To achieve this, consider including a leaflet with each sale, containing information about your nonprofit and its purpose, as well as how the buyer is supporting your organization by making this purchase. 

Make sure to contact a lawyer to check if there are any additional local laws to consider before you start selling anything. 

Grants

Nonprofits can apply for grants from governments, public charities, and private and community foundations. 

In practical terms, a grant is similar to a large donation in that your organization won’t be expected to repay any of it; however, unlike donations, grants usually come with specific requirements that need to be met – and these can vary depending on the organization offering the grant. Typically, these are strict requirements on how you spend the money and report that spending. 

It’s important to bear in mind that grants are difficult to obtain due to requiring expert grant proposal writing skills – something that takes both time and expertise to do. However, if you’re willing to invest the time and commitment to do this, it can be well worth the effort. 

Tax Exemptions for Nonprofits

Nonprofit organizations are typically exempt from federal income taxes in most countries, but  your organization needs to meet certain conditions.

In the U.S., for this exemption to apply, your organization needs to be structured as a 501(c)(3) or a 501(c)(4) as per the IRS tax code.

In general, in order to meet the tax-exempt status, nonprofits must satisfy the following conditions: 

  1. The organization must operate solely for charitable, scientific, religious, or public safety purposes.
  2. The organization must use its entire income, minus expenses, to support organizations or individuals that are legally recognized as charities. 

Additionally, as a U.S. nonprofit, your organization is also exempt from paying sales tax and property tax. However, your organization will be subject to employee taxes, such as Social Security and Medicare. 

Donations to 501(c) Organizations

One great benefit of being tax-exempt as a nonprofit is that donations to your organization are tax-deductible. This means that individuals and other organizations have a greater incentive to donate, as they can reduce their own tax owing by doing so, while contributing to your cause. 

Exceptions to Tax Exemptions

Throughout this article we’ve discussed raising funds for your organization through donations. However, several nonprofits employ other methods to raise funds, such as selling products that aren’t directly related to their cause. In these cases, nonprofits are liable to pay federal income tax on proceedings from these sales. 

Remember to consider this when working on your funding model. If you want to avoid being liable to pay income tax, try to stick to donations and selling products that you can tie directly to your organization’s cause. 

The Bottom Line: How to Get Donations for Your Nonprofit

Running a nonprofit is definitely not easy, and gathering donations is among the greatest challenges your organization will face. 

Regardless of your cause, one thing is for sure – gathering funding is a continuous process, and you should never rest on your laurels.

Start by identifying your audience and tailoring your messaging to make sure that it speaks to those particular groups. Don’t be discouraged by a lack of responses or even a flat-out “no.” It’s all part of the process, and the more you are able to learn what works and what doesn’t, the more success you’ll be seeing.

It’s also important to try to branch out sometimes. Attempt to broaden your horizons and expand your reach, be it by adding another social media profile or by dipping your toes into offline funding methods.

Most importantly, make sure that your mission and the causes you’re fighting for are always clear and presented in a way that speaks to the heart. In the end, we’re all human, and being able to stir some genuine feelings in your readers will help your nonprofit continue its mission for many years to come.

Sources:

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  4. https://www.councilofnonprofits.org/tools-resources/fundraising
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  29. https://www.networkforgood.com

FAQs

How can my nonprofit organization receive donations?

Nonprofits can receive donations through various channels such as online donation platforms, crowdfunding websites, direct mail, and in-person events.

Are there any tax benefits for donors who give to nonprofits?

In most cases, yes. Donors can usually deduct charitable contributions made to qualified nonprofits on their income tax return.

How can my nonprofit ensure that donations are used effectively?

By being transparent about the organization's finances and using donations for specific, predetermined purposes, a nonprofit can demonstrate to donors that their contributions are being used effectively. Regularly providing updates on the impact of donations can also help build trust with donors.

How can my nonprofit organization attract more donors?

Some ways to attract more donors include building a strong online presence, hosting fundraising events, and building relationships with community leaders and businesses. Networking and building partnerships with other nonprofits and organizations can also be an effective way to reach new donors.

Is there a minimum donation amount that is required for a donation to be tax-deductible?

The deduction limit is usually determined by the percentage of the donor's adjusted gross income (AGI) and what is the type of the donation. In general, donations must be made to a qualified nonprofit organization and the donor must retain documentation such as a receipt or canceled check as proof of the donation in case of an audit.

Meet the author
Monica J White
Monica is a journalist with a lifelong interest in technology. She first started writing over ten years ago and has made a career out of it, with a special focus on fintech. She enjoys the challenge of explaining complex topics to a broader audience.

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