Author: Rinku Ramchandani

Nonprofits today face a tug-of-war between data protection and data use. On one hand, organizations must safeguard donor data and ensure compliance with privacy laws. On the other, nonprofits need to use data to gain insight, build better models, and raise more money. Striking the right balance is key.

Data protection is non-negotiable.

Donors expect their data to be handled securely and ethically. Strict data security policies are required to build donor trust. However, an overemphasis on security can prevent productive data use. Some nonprofits lock down data access to the point that even internal teams struggle to tap into key data resources.

Data use, when done responsibly, drives fundraising effectiveness.

Analyzing data on donor behaviors, events attendance, web activity and more helps nonprofits personalize outreach, uncover patterns, and make data-driven decisions. New artificial intelligence and machine learning tools can help nonprofits get more from their data. But many organizations don’t have the technical skills or resources in-house to leverage these technologies.

The solution lies in establishing the right data governance and forging strategic partnerships.

Data governance policies should balance security and access, providing safe yet flexible data use guidelines. Partnering with external data experts, whether consultants, vendors or volunteers, helps fill technical gaps. These partners can work with raw data in secure environments to build models and derive insights, then share actionable recommendations with the nonprofit.

Nonprofits no longer have to choose between data protection and use. With the right data governance and partnerships in place, organizations can have it both ways – safeguarding data privacy while enabling productive analytics. The key is starting an open conversation on data use and security, setting clear policies, and collaborating with partners to make the most of your data resources in a responsible, ethical way. By protecting data and using it strategically at the same time, nonprofits gain a competitive edge through data-driven decision making. The future of fundraising is data – and the path forward lies in partnership.

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For nonprofits, fundraising is the fuel that powers their mission. But fundraising requires investment to build relationships, set strategy, and solicit donations. Some organizations question if the return on investment (ROI) is worth the cost, especially for resource-constrained groups. However, research shows that fundraising has one of the highest ROIs of any nonprofit activity.

According to research from DAHP University in Canada, fundraising can return up to $15 for every $1 invested. For major gifts, the return is even higher.

Professor Russell James explained, “If you want the resources to actually make the impact, that’s not going to come from a hundred or a thousand small donations. Fundamentally, there is nothing that has a better ROI than spending more time with donors of capacity.”

Investing in advancement means hiring staff, training them well, and trusting them to build long-term relationships with donors. It means giving them the time and resources to discover what motivates individuals to give meaningfully.

According to fundraising expert Jim Langley, “We’ve got to recognize empirical reality, and that empirical reality is that if you want the resources to actually make the impact, that’s not going to come from a hundred or a thousand pat on the head gifts.”

For organizations hesitant to make fundraising investments, start with what you have. Tap volunteers, board members, and existing staff to help with donor discovery and outreach. Provide the rationale and training they need to have genuine conversations. Share stories of donors who have funded transformational work to build urgency.

Fundraisers must focus on finding opportunities for “major life investment gifts” that accomplish donors’ philanthropic victories. This level of customized partnership requires investment but is well worth the reward. As James said, “There’s lots of great reasons to try to expand the volume of donors…[but] the number one is because we want that to help us identify those who have the willingness, the interest, and the capacity to make these major transformational gifts.”

For nonprofits that want to make a real impact, fundraising investment is not optional. The question is not whether organizations can afford to invest in advancement, but whether they can afford not to. With the right strategy and staffing, fundraising has the power to change what is possible for organizations and the lives they serve.

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Nonprofit fundraising expert Juan Azkue says donor behavior is shifting in a way that challenges traditional nonprofit-donor relationships. Donors today are increasingly cause-driven rather than organization-loyal. They care about issues and solutions, not brands.

This trend means nonprofits can no longer rely on long-term donor loyalty and retention.

Donors may come and go as their interests and the urgency of causes change. To adapt, nonprofits need to focus on demonstrating impact and value. “Evidence-based demonstrations are way more important than it used to be in the past,” Azkue says. Annual reports and project updates are not enough. Donors want to see how their dollars are driving meaningful change.

Nonprofits also need to provide more interactive, customized donor experiences.

New technologies make personalized journeys possible at a large scale. Asking donors what they care about and tailoring communications around their interests can build trust and loyalty to the mission if not the organization.

With donor loyalty fleeting, nonprofits must work to stay nimble and responsive. They need to spot new “jobs to be done” and causes gaining attention, then develop products and campaigns to match. Partnerships with companies, brands, and platforms that reach new audiences can help nonprofits scale their efforts. According to Azkue, the majority of successful nonprofit innovations have come through collaborations, not solo efforts.

To attract and retain today’s cause-driven donors, nonprofits should:

• Focus on demonstrating impact through evidence and outcomes. Share stories of lives changed and problems solved.

• Deliver personalized interactions and tailored content. Ask donors what they care about and meet them where their interests lie.

• Embrace an agile and innovative mindset. Continually spot new causes and opportunities, then develop products, services, and campaigns to match.

• Pursue strategic partnerships. Work with brands, companies, and platforms aligned with your mission to reach new audiences and scale efforts.

• Accept that donor loyalty is transient. While still important, long-term retention should not be the primary marker of success. Impact and responsiveness are key.

The organizations that adapt to this new reality will be the ones to thrive.

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Nonprofits depend on the generosity of donors to fund their missions. However, many nonprofits have seen a troubling trend in recent years of declining donor numbers even as total dollars raised have increased. This is due to an overreliance on large donations from a few, major donors. While courting wealthy donors is important, nonprofits must diversify their fundraising to build resilience.

According to Woodrow Rosenbaum, Chief Data Officer at GivingTuesday, nonprofits with a broad base of support from many small, grassroots donors weather economic uncertainty and downturns much better than those dependent on a handful of large gifts. Large donors tend to reduce or pull back donations more in tough times. With the possibility of a recession looming, nonprofits must take action now to expand their donor base and not put “all their eggs in one basket.”

Nonprofits often misunderstand donors and their motivations.

They incorrectly assume that people give primarily with their wallets and mainly support registered nonprofits. In reality, people give in many ways – their time, skills, and directly to those in need. And much of people’s giving does not involve nonprofits at all. People remain very motivated to give to make a difference, especially in times of crisis. Tapping into people’s desire for purpose and agency can open up new fundraising opportunities.

To boost donor diversity, nonprofits need to overhaul their fundraising strategies and mindsets. They must engage grassroots supporters year-round, not just during the end-of-year giving season. Using multiple communication channels with a compelling message of unity and agency, nonprofits can inspire more people to give and raise more money. Partnerships with other organizations can also help cast a wider net to reach and engage more potential donors.

The time for nonprofits to act is now to build donor resilience and ensure financial stability regardless of what the future may hold. With some openness to new approaches, nonprofits can turn the troubling tide of donor decline and thrive. Overall, spreading fundraising across many baskets of donors is key to nonprofit health and impact.

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Social impact bonds (SIBs) present an innovative funding model for nonprofits, but they also bring potential risks and challenges. Nonprofits interested in SIBs must focus on three key areas to address these risks: sustainability, costs, and evaluation.

SIBs are often designed to achieve long-term social outcomes, so the programs they fund must be sustainable beyond the life of the bond. This may require securing additional funding, developing a scalable model, and ensuring the program becomes embedded in public sector work. For example, a program that trains refugees as nurse assistants could tap into grants for workforce development and partner with healthcare organizations to provide ongoing jobs.

SIBs can be expensive to set up and manage, including costs for negotiating contracts, service delivery, measuring outcomes, and conducting impact evaluations. Nonprofits must account for these costs in their financial models and ensure potential returns justify them. They may need to charge higher fees to investors or secure separate funding to cover additional costs.

Robust data collection and analysis are required to determine if SIBs achieve their intended impacts and trigger investor payments. Nonprofits must have strong evaluation systems in place, or work with third-party evaluators. They need to establish concrete outcomes and metrics at the outset, and collect and analyze data to demonstrate results to investors and public sector partners.

By addressing these three risks proactively, nonprofits can increase their likelihood of securing SIB funding, achieve sustainable impacts, and provide financial returns to investors. With the proper safeguards and evaluation strategies in place, nonprofits of all sizes can utilize SIBs to fund innovative programs and drive meaningful change. Overall, SIBs present an opportunity for nonprofits to focus on outcomes rather than fundraising, but only if they go in with their eyes open to the potential challenges. With careful planning, SIBs can be a useful tool for social change.

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For fundraising shops looking to grow, Delhousie University offers an inspiring case study. Over the course of 10 years, Delhousie tripled its advancement team, budget, and fundraising results. Peter Ferrari, who led the advancement team during this growth, shared how they achieved this in a recent podcast.

The first step was determining how advancement was actually performing. Ferrari analyzed 20 years of fundraising data to understand Delhousie’s historical growth and return on investment. Despite variability from year to year, he found that over the long run, Delhousie secured about $6 in new donations for every $1 spent on fundraising.

Next, Ferrari benchmarked Delhousie against other universities to see how their performance and resources compared. He found Delhousie was average in some areas but underinvested in fundraising relative to competitors. This data gave Ferrari confidence that with more resources, Delhousie could raise significantly more.

Ferrari then projected how much Delhousie could raise with higher investment, building a case for support with multi-year growth plans. The key, Ferrari argues, was grounding these projections in facts. By demonstrating a track record of success and relative underperformance, Ferrari convinced leadership to triple Delhousie’s advancement budget.

With more resources, the advancement team grew and invested in staff, technology, and outreach. Donations skyrocketed as a result. After the first five years, the new budget had generated over $70 million in new donations—far surpassing the initial investment.

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For years, higher education institutions have relied on phonathons to raise critical unrestricted dollars from alumni. However, experts argue it’s time for schools to rethink the phonathon model to build meaningful engagement and lifetime donor loyalty.

Perry Willett, founder of Principal Volanthropy, says phonathons are often solely focused on dollar goals and housed within annual giving departments. But they could serve a much broader purpose. “Donors have been saying for decades, ‘I only hear from you when you want my money.’ They want to help in other ways. We have ignored them and not created systems to allow them to do that,” Willett says.

If schools repositioned phonathons to focus not just on giving but on volunteerism, events, mentoring and more, they could tap into donors’ full potential to contribute. This could strengthen the institution-donor relationship and open up more impactful opportunities for donors to get involved.

Dr. Sholanda Martin agrees that schools need to take a wider engagement perspective. “We’re partnering much more intensely with other campus partners because we can see the interrelation between all of the functions that we do. And what we do doesn’t just financially support what other people do, but it also reputationally does too,” she says.

By integrating phonathons into a broader engagement strategy, schools can build a pipeline for deeper donor participation over a lifetime. They can also make the experience more meaningful and equitable for diverse groups of alumni. The key is having resources and institutional support to make this shift.

While fundraising metrics and dollars raised still matter, donors matter more. Repositioning the phonathon around engagement and participation instead of strictly dollars can help schools develop lifelong advocates and build a culture of philanthropy to support them for generations to come. The time for this broader, more strategic approach to fundraising is now.

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A recent survey by the Donor Participation Project found that advancement leaders need help demonstrating the return on investment of donor participation efforts to higher administration. How can fundraisers build a compelling case for these broad-based fundraising programs?

Start by quantifying the long-term value of today’s donors. For example, compare the number of recent graduates who make a gift within five years of graduating to the number who become high-level donors in 10-15 years. Use predictive modeling to estimate the lifetime value of these entry-level donors and the potential major gifts in the pipeline. While the ROI of donor participation efforts may be harder to prove than major gifts, show how they build the foundation for future fundraising success.  

Focus on engaging new donors, not just chasing participation rates. Measure success through metrics like donor retention and upgrading over time instead of focusing narrowly on the number of gifts each year. Demonstrate how enhanced engagement—through digital campaigns, customized communications, and in-person events—leads to higher lifetime value and major gift potential.  

Educate leadership about modern fundraising strategies. Explain how tactics like social media marketing, online giving days, and data-driven appeals are necessary to reach today’s donors. Discuss how other departments on campus, like admissions or student affairs, have adapted to engage their audiences, and how advancement needs to keep up. Ask for the resources and organizational support required to build a robust digital and analytics program.

Make the case that a long-term, campus-wide fundraising strategy requires investment in both infrastructure and innovation. While donor participation efforts may be less glamorous than principal gifts, they establish the foundation for a healthy, sustainable development program. With the right data, messaging, and vision, fundraisers can convince their leadership of the vital role that broad-based fundraising plays in the overall success and financial health of the institution. Overall, taking the time to articulate their vision, strategies, and needs can help fundraisers gain the support required to grow donor participation and build the pipeline of the future.

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Nonprofit organizations often struggle with the challenge of attracting and retaining qualified fundraising staff. As discussed by experts in a recent podcast, the nonprofit sector needs to strengthen its “talent pipeline” by investing in training programs and career pathways for development professionals.

With demand far outpacing supply, nonprofits must compete for experienced fundraisers. At the same time, they need to bring on junior staff and help them develop expertise. This requires offering competitive pay and benefits, as well as opportunities for mentorship and professional growth. 

Mid-level staff, in particular, need support to progress in their careers. Nonprofits should create clear job tracks with titles and salary bands that allow fundraisers to advance from manager to senior manager to director and beyond. They must also budget for ongoing learning and skills development. This could include programs for obtaining CFRE certification, as well as memberships to industry organizations.

For new college graduates and career-changers, nonprofit internship and fellowship programs are key. Organizations should collaborate with universities to provide field experience for students and new professionals. While interns require supervision, they also bring enthusiasm and help build the talent pipeline.

To improve the fundraising profession overall, nonprofits must advocate for more formal training programs. A master’s degree in nonprofit management, for example, should include coursework in development and donor relations. Continuing education programs are also needed for mid-career professionals. 

By investing in people, nonprofits can equip themselves with the talent and skills required to boost donor participation rates over the long run. With a coordinated effort across organizations, the nonprofit sector can strengthen its professional pipeline and better achieve its mission. Overall, nonprofit fundraising success starts with the education, experience, and expertise of development staff.

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Artificial intelligence and chatbots are transforming how nonprofits engage with donors and supporters. While the technology seems complex, nonprofit fundraisers can easily build their own AI chatbots to boost donor participation and fundraising.

One way to build a chatbot is by using an automation platform like Zapier and its “Create a Chatbot” feature. You first determine the purpose of your chatbot, such as acting as a fundraising coach. Then you create an introductory greeting for donors and the first prompt to get the conversation started. 

The key step is providing directives to guide the chatbot’s knowledge and responses.

For a fundraising coach chatbot, directives would include advice and principles around donor engagement and participation. For example, “Engagement leads to philanthropy, not the other way around. Make donors feel valued and seen because that improves their retention and investment.” With these types of directives, the chatbot can have insightful conversations about challenges like reactivating lapsed donors or overcoming board resistance to sharing prospects.

To improve the chatbot, continue adding more specific directives and examples relevant to your nonprofit’s mission and donors. You can also “train” the chatbot by providing examples of real conversations to help it learn proper responses.  Include an “Easter egg” in the directives, mentioning your organization or programs. This helps to promote your cause even through an automated chat.

While chatbots cannot replicate human relationships, they can start meaningful conversations with donors and provide on-demand support for fundraisers. Building your own customized chatbot is a creative way to demonstrate how your nonprofit is using technology and innovation to better achieve its mission. With some experimentation, nonprofits can develop useful and personalized chatbots to assist with fundraising.

In summary, chatbots and AI are more accessible than you may think. Nonprofits can easily build their own tools to supplement fundraising and donor engagement. All you need is an understanding of your donors, some automation, and a willingness to experiment. The technology may be advanced but deploying it for good is within your reach.

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