The extreme adaptability and flexibility of the crowdfunding market have enabled it to transcend expectations in various forms and industries. Moreover, crowdfunding’s ability to embrace the latest technological perks and emerging uncertainties such as the Covid-19 ensures that this phenomenal wave is here to stay.
We have shed insights into all the primary forms of crowdfunding: (reward-based, equity crowdfunding, and donation-based crowdfunding.) Still, there is more to donation-based crowdfunding than what meets the eye. Due to the pace and scale of recent developments, charities and nonprofits must build solid and long-lasting relationships for successful fundraising.
That’s where relationship-based fundraising comes in. Organizations building lifelong relationships with their backers is essential for any fundraising initiative.
As the name gives it away, relationship-based fundraising is a fundraising strategy that relies on developing long-term and prudent relationships with donors. Relationship fundraising supersedes the traditional approaches to fundraising, which in the ever dynamic modern world are somewhat ineffectual for attracting and retaining backers.
Still, there is more to relationship-based fundraising individuals and nonprofits have to understand for diverse and successful fundraising strategies and practices.
Relationship-based fundraising explained
As already outlined, relationship fundraising prioritizes enhancing the unique and special relationships between a charity and its donors for a long-term relationship. Relationship-based fundraising asserts that the conventional practices of amassing funds are incapable of attracting and retaining modern backers who expect to feel important, valued, and considered. In addition, the donor expects specific considerations from projects or entities they might support.
There is no doubt traditional approaches to fundraising such as one-off solicitations or transactional money-raising can help one achieve the goal of getting a particular amount to further their objectives. In addition, transactional fundraising brings in megabucks instantly, and that’s it. Donors contribute funds primarily for the imminent action rather than the cause. Hardly will the backers follow up, sustain, maintain and give subsequent gifts to the organization.
On the contrary, the initial contribution might be less with a relationship-based fundraising model but ultimately brings in more money and better, more reliably. Relationship funding focuses on personalization, developing partners, appreciation, paying attention to donors, and in sum, building solid relationships. In return, nonprofits gain committed donors that support their causes on an ongoing basis. In addition, they ensure charities have the unlimited financial wherewithal to achieve their objectives. Not to mention, committed backers are more likely capable of offering transformational gifts.
Overall, relationship-based fundraising is the ideal philanthropy to sustain nonprofits during the good and bad times. First, however, charitable organizations must heed the appropriate steps to make it work.
Steps to successful relationship-based fundraising
The donor journey is the process of relationship fundraising. Thanks to digital technology, the process of understanding donors and building robust and lasting relationships is more feasible. In brief, the donor journey helps nonprofits comprehend who their backers are and their motivation to make their giving choices. Also, it helps track how and when nonprofits should engage and communicate with donors.
Unfortunately, engaging and developing long-term relationships with donors isn’t a forte many nonprofits excel at. However, the vital steps are to streamline the process and ensure success are:
Initial contact with a new donor
The first meetings with prospective backers are critical in molding a solid relationship. It’s paramount to tell a story that offers valuable insights and maintains professionalism. For instance, immersive storytelling gives donors valuable insights and bolsters fundraising success. Likewise, creating a worthy image lays the foundation for a solid relationship with the donors.
Ensure you have done in-depth research about the prospective donors and understand the areas they are capable of helping out. Understand what motivates them to give and capitalize it to your advantage.
Contacting donors with inept investigation proves how unworthy you are of their donations. Also, it affects future interactions since the donors regarded your project, cause, or organization as a joke from the beginning.
Patience and understanding donors are the backbone of this step. It would be best to engage all potential donors, regardless of their age or financial status. Allow all individuals or organizations to contribute. Once donors contribute to a cause, it’s vital to show them how their money is being put into use. In addition, you can request their insights and feedback where necessary.
Also, a donor is highly likely to be passionate about a cause by contributing to it. As such, nonprofits should leverage this goodwill wave and offer backers the opportunity to volunteer with them or join as advisors.
The primary objective is to engage them to make them feel valued and appreciated. This, in turn, builds and enhances relationships.
Some nonprofits only communicate to donors when there is a funding requirement. This is a bad practice and doesn’t nurture a constructive relationship. Therefore, it would be best for nonprofits to engage donors even when they are not seeking immediate funding. For instance, regular social media updates go a long way in informing audiences and donors of the progress and impact of an organization’s activities. Even better, photos and videos entice them to keep watching and offer an authentic view of the charity, its impact, and operations.
Also, allow significant donors to participate in board meetings. As a result, they can provide valuable insights, ask questions and raise concerns. Again, this makes them feel appreciated and part of a cause. Finally, recognizing donors in annual reports, newsletters, or even social media updates acknowledges their support and, importantly, provides organizational donors with formal processes to go through.
In sum, consistent dialogue and communication with donors are essential for relationship-based fundraising to thrive.
Collect and analyze data
Collecting appropriate data on the donor journey helps nonprofits assess what’s working out and what isn’t in their operations. Subsequently, they can refine and tailor their relationship-based fundraising strategy to work in their favor.
Charities and nonprofits should capitalize on relationship-based fundraising in lieu of conventional or transactional fundraising. Relational money-raising builds committed supporters and develops partners that will immensely impact a nonprofit’s operations in the long run. Success in raising money not only depends on the broad base of funding bases but also on the efforts spent on building and nurturing solid and lifelong relationships with backers.