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Four Common Pitfalls Of Fundraising

I’ve worked in nonprofits and fundraising a long time, and I’ve seen some bad habits repeated over and over again. Fundraising often gets a bad rap as something that’s scary and should be avoided. If your organization can avoid these common mistakes, raising money should become easier and less anxiety-producing for your staff and board.

1. Thinking it’s transactional

Fundraising is essentially organizing money. As with all organizing work, it’s about building relationships. Unfortunately, too often folks try to get "easy" money without a strategy and without focusing on the people and investing in relationships. Raising money isn’t a side activity that just happens in your organization — it needs to be part of the strategic plan, and not just a means to the end. When done strategically, fundraising will fit in seamlessly with the other work that your organization is doing and will do more than just raise money, but help raise the organization’s profile and build important relationships that can be leveraged for more than just financial asks. Donors are people, and no one wants to feel like a human ATM machine. When fundraising asks feel transactional, they are not only less successful but may turn off donors and prospective donors from the organization altogether.

2. Letting money dictate programs

It’s important that your organization sets strategic goals and regularly checks in and reevaluates them. That way you can ensure that the programs you’re creating fit what the community needs and align with the mission and goals of the organization. One common pitfall is creating programs to fit grant opportunities. This is how organizations’ messages get muddled — by adding new programs that don’t fit the narrative just because there’s money attached. It’s okay to diversify and expand the scope of your organization and programs, but do it because that’s what’s best for the organization and community, not because there is a grant that will fund the change in direction.

The strongest organizations decide on their priorities and programs and then pursue funding that meets their needs. If there is a good program that will help address true needs in the community, with the right strategy and messaging you will be able to find the funding to grow it.

3. Not Diversifying

It’s a little-known fact — one that I didn’t even learn until I took a Master’s course for my nonprofit management program — that there are seven streams of income available to nonprofit organizations. I won’t go into them all here (but we do cover all seven streams of funding in our Nonprofit Liftoff program). I’ve seen so many organizations focus on only one or two funding streams, and most commonly those are grants and individual donors. When your strategy depends on only two of seven opportunities, you are leaving money on the table. You are also chasing the same two funding streams that everyone else is chasing; the more competition, the less likely you are to get the funding.

The biggest reason to expand your fundraising strategy beyond a couple of tactics is flexibility. If the pandemic has taught us anything, it’s that you need to have unrestricted funds to pivot and do so quickly. Unfortunately, grant and donor funds are often earmarked for specific projects or categories and don’t allow for much flexibility. In order to survive as a nonprofit in the long term, your organization needs unrestricted funding that they can use as needed when the organization and community need change.

4. Not asking enough

The most pervasive problem that I see across the nonprofit sector is not asking for money enough. There is this common misconception that people are so tired of fundraising asks that they won’t give again, so fundraisers don’t even try. Just because you already sent a fundraising email this month, last week, or included a donate link in another type of email, that’s not a reason to avoid sending another ask today. Your supporters probably aren’t as tired of fundraising asks as you think they are, and some are able to continue giving. The more fundraising appeals you make, the more opportunities you are creating for your supporters to connect with your organization. Don’t presume to know the financial situations and priorities of your supporters or if they are tapped out in certain weeks or months — ask anyway!

Fundraising doesn’t have to be a bad word or something to fear. By avoiding these common stumbling blocks, you can protect not only your organization’s financial health but also your fundraising staff’s mental health and stress levels. Raising money doesn’t have to be anxiety-producing, scary, or even difficult, as long as it's strategic.


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