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Nonprofit organizations of all sizes face capacity challenges when it comes to finding new donors and developing new, creative campaigns. This is why it’s important to create the right mix of funding sources to sustain your nonprofit’s purpose.
In this guide, we’ll explore why individual giving matters and how you can leverage this funding source to your advantage.
What is individual fundraising?
Individual fundraising is what most of us think of when we think of fundraising at all—it is individuals making monetary gifts to a nonprofit organization. This can be as simple as a person going to your website and making a donation or it can be as involved as a peer-to-peer fundraising campaign. The key point of this type of fundraising is that it focuses on individual giving.
How much of my fundraising revenue should be individual giving?
In general, each funding source should account for no more than a third of your nonprofit’s operating budget. The idea is that should a nonprofit lose a third of its funding, it can restructure, recover, and move forward. A sustainable funding mix could look something like this:
- One-third from grants
- One-third from fees-for-service, in-kind donations, and/or corporate sponsorships
- One-third from individual giving and events
Although some organizations don’t consider nonprofit individual fundraising a priority due to being well-funded through grants and fees-for-service, individual giving is actually essential for nonprofit organizations. Grant renewal is not guaranteed, so having a base of individual donors provides much-needed security in the event that other funding sources become restricted.
Why is individual giving important?
In 2021, individuals represented 67% of total giving and were the largest source of giving that year. That’s why it’s important to focus on nonprofit individual giving—appealing to individual donors will help you greatly increase your funding revenue.
Here are three more reasons why your nonprofit should prioritize individual giving:
- Increased awareness for your nonprofit’s purpose. Having a large number of individual donors means that a large number of people know about your nonprofit. This will lead to greater awareness for your nonprofit, as your donors will inevitably mention your nonprofit, leading to greater outreach.
- Deeper community involvement and support. Aside from simply making financial gifts to your nonprofit, donors are likely to also serve as volunteers or supporters in other aspects. This improves involvement in your organization’s events and increases support.
- Financial diversification and future-proofing. As mentioned previously, having a sustainable mix of funding sources is important. Having many individual donors helps you diversify your funding, and depending on your donor stewardship, will guarantee you revenue in the future as well.
With a steady stream of individual gifts, your nonprofit will be well-equipped to fund campaigns, develop programs, and pursue your purpose.
Individual giving considerations
You should be using different techniques for encouraging nonprofit individual giving versus creating corporate partnerships or applying for grants. Whether you’re new to individual giving or need a refresher, there are a few key considerations to keep in mind:
- Implement donor segmentation. Individual donors will be drawn to your nonprofit for different reasons. Make sure to segment your donors based on why they choose to give to your organization so that you have a good understanding of how to appeal to your individual donors.
- Use fundraising tools and software. There are many tools that make fundraising easy for nonprofits in regard to individual giving. Use fundraising or donor management software to create personalized appeals to individual donors and help automate your process.
- Donors want to connect with your nonprofit’s purpose. If they do have this connection, they are more likely to make gifts to your nonprofit. You can create this connection through storytelling—make your nonprofit’s purpose relatable to your donors and show them the impact their individual gifts will have.
The important idea to keep in mind is that individual donors want to feel valued by your nonprofit. In order to increase individual giving, you’ll need to make personalized appeals and freely show your gratitude.
Individual giving makes a difference
Leverage the power of nonprofit individual giving when you consider your fundraising efforts. While it’s important to appeal to corporations for partnerships and foundations for grants, ensure that you properly center individuals in your fundraising strategy. They can make a huge difference for your nonprofit!