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GuideStar Blog

6 Fundraising Tips for Nonprofits

Check out our new infographic below depicting the six steps nonprofits can take to more effectively fundraise. These tips are anchored by research, called Money for Good II, that we partnered on with Hope Consulting – check it out:

How Big Should Your Endowment Be?

No one has ever accused me of being a math whiz. In fact, numbers seem to roam around my brain, sometimes reconfiguring themselves in strange ways that have little to do with reality.

How Financial SCAN can help you

The following is a post by Lee Glenn, GuideStar’s senior vice president.

Dual-Channel Donors Give the Most and Earn the Most

The following is a guest post by Dennis McCarthy, VP of Strategy and Business Practice at Convio.

The New Standard for Assessing Nonprofit Financial Health


Quick—what's wrong with this statement?

"XYZ Charity is good to give to because it spends 90 cents of every dollar on programs. ABC Charity is bad to give to, because only 75 percent of its expenses are for programs; 25 percent goes to overhead."

If you're familiar with GuideStar's position on using financial ratios to evaluate nonprofits, you know that the answer is "A lot." For starters:

  • The statement doesn’t account for the tremendous variety in the nonprofit sector.
  • It doesn't speak to the effectiveness of the two charities' programs.
  • It relies on only one type of financial indicator, program ratio (total program spending divided by total expenses).
  • It doesn't address either nonprofit's financial health.
  • It doesn't account for change over time—organizations require different amounts of overhead during different stages of their lifecycles.

Want to Raise More Funds? Go Out and Tell Your Story—to Everyone!

In his effort to explain to me the problems his organization was facing raising funds and being recognized in the community for its decades of good work, the board member of a nonprofit housing organization said to me in obvious frustration, "My own 28-year-old son was recently in the market for a house. I suggested he go down the street to the organization I've been a board member of for the past 26 years. You know what my son said?"

Key Findings from the 2012 eNonprofits Benchmarking Study

View the infographic

Trends in Healthcare Philanthropy and the Use of Separate Foundations

Excerpted from "Trends in Healthcare Philanthropy and the Use of Separate Foundations"

Is “overhead” dead?

Lindsay Nichols

Introducing Financial SCAN: Nonprofit data analysis done right

The following is a cross-post from NFF’s Social Currency blog, written by Rebecca Thomas, vice president of Strategy & Innovation. You can find the original post here.

Introducing Financial SCAN

Today we are truly proud to launch a new online nonprofit financial analysis tool, which we created in partnership with Nonprofit Finance Fund (NFF), called Financial SCAN: Our senior product manager Pam Jowdy sat down with NFF’s vice president, Rebecca Thomas, and GuideStar’s senior vice president, Lee Glenn, to discuss this innovative new platform – the highlights are below. You can find the full video on YouTube here:

Trusting the Cloud

The following is a guest post by Shawn Kendrick, a researcher and blogger for VolunteerHub, a cloud-based volunteer management software application that offers online event registration, email and SMS (text) messaging, report generation, and much more. This is the second in our VolunteerCorner series – focusing on what you need to know about volunteering for nonprofits.

The term “cloud computing” is all over the place: in advertisements, in industry news, and just about anywhere related to technology. But what exactly does the term mean? What can the cloud do for non-profits… and can it be trusted?

What is the Cloud?

Cloud computing simply means that services are hosted on a remote server instead of on your own. Often you’ll see this expressed as Software as a Service (SaaS). Essentially, you pay for the use of the software, but you don’t have to download anything. Think about all the online services you can use from any computer that’s connected to the Internet. These are all SaaS products, better known today as cloud computing services.

What Can the Cloud Do for Your Organization?

Simply put, cloud computing can save your organization a lot of time and money. Because the onus of hosting is on the provider, your agency won’t have the hassles and costs of server maintenance, data storage, and software upgrades. Naturally, this lowers your IT costs significantly. From a purely business standpoint, you’ll also notice that most SaaS services are subscription-based, letting you spend your money as you go. Traditional software requires more upfront costs. At the speed technology advances, it may be wise to save your investment to remain flexible. In other words, why spend a bunch of money upfront when the product may be obsolete before you even see a return on your money?

Trusting the Cloud

Because a server and software disk aren’t on your premises when using cloud services, many decision makers have a hard time “letting go” and trusting cloud providers. However, you’ll find that cloud services are extremely reliable. The plain truth is that the best cloud providers have more resources than the average nonprofit organization to put toward system stability and security. Let’s take a look at VolunteerHub as an example. Using the most technologically-advanced firewall commercially available, VolunteerHub has servers that are under 24/7 monitoring, with numerous redundant Internet connections. All information is mirrored to a back-up disk in case of a hard drive crash. Then data is taken each day from VolunteerHub’s primary data center to an off-site location in case there is a catastrophe at the main location. When viewed from this perspective, data security and back-up from cloud-based applications tend to far exceed that of most nonprofits’ on-site strategies.

With this explanation of the cloud, it’s clear to see what all the fuss is about. Cloud computing is changing the way organizations manage IT infrastructure. Now a nonprofit can afford cutting-edge services with less investment, freeing up money and resources to help further its cause.

Shawn Kendrick holds an MBA from Ohio Dominican University and has over a decade of experience in the nonprofit and business sectors.

So You Need (to Improve) a Governance Committee?

 The Governance Committee (GC) is the most important committee of your nonprofit leadership. Its chief responsibilities are to determine the membership of your board and measure the quality of performance of the board as a whole and of your individual board members.

If your organization does not have a GC, or the GC is less than constructive, here are "Six S's" to a strong GC.

Fatal Fundraising Flaw: Don't Succumb

Excerpted from How to Raise $1 Million (or More!) in 10 Bite-Sized Steps

I recently worked on a project to raise $1 million to renovate a community market building that's home to many local businesses.

In an early planning meeting, George, one of the more powerful committee members, said he was convinced the best way to raise half of the money was to get 500 people to each give a thousand dollars.

"After all," George reasoned, "the market is the heart of the community and hundreds of thousands of people shop here every year. Why should a few people bear the brunt of this fundraising?" George suggested we sell 500 paving bricks at a thousand dollars each. "We'll raise half the money that way and be done by the end of the summer," he concluded.

Sounds deceptively easy and logical, except for one fatal flaw ...

People—and count yourself among them—aren't inclined to write checks of a thousand dollars without being carefully cultivated and solicited. George's idea was simply impractical. We had neither the staff nor the time nor the resources to identify, cultivate, and sell bricks to 500 people.

George's belief that raising money through lots of smaller gifts isn't uncommon. And certainly you'll want to invite as many people as possible to contribute what they can. But before you approach smaller donors you need enough large gifts to anchor the campaign. You ignore this part of the fundraising process at your own peril.

Take the temptation of direct mail, for instance. Blanketing your community with a general appeal is certainly easier than summoning the courage to ask selected people for sizable gifts. Just ask the library in a small town, where a wonderful group of people decided they were going to raise $2.2 million from private sources to help expand the library. They did in fact raise $900,000, leaving them $1.3 million short.

Approximately 34,000 people live in the town where the library is located, and their small trailer-like library was very popular. So the board figured they could send a letter to everyone asking for help to build a new facility. They wrote a great letter, developed a pledge form, and secured all of the town's names and addresses. They even put personal notes on many of the letters. With great anticipation, the letter was sent.

How much of the hoped-for $1.2 million came in from that mailing? To the board's surprise, just over $14,000. Not nearly enough to complete the campaign.

With some rare exceptions, the direct mail approach results in small gifts. To succeed in raising the remaining $1.2 million, the library needed additional big gifts. Who do you know would send $10,000, $25,000, and $50,000 via the post? (Ultimately, the library exceeded its fundraising goals.)

Raising large gifts requires effort, but it's a more strategic kind of effort, not the many hours of volunteer work required to get out a mailing. It takes time and thought and energy to build solid relationships with the right people, but once that's done, the asking part is easy.

Everyone's Fundraising Fantasy

Dave, the executive director of a youth services organization in New York City, established a charter school to expand and extend the services his agency provided for young people and their families in a notably poor neighborhood.

In the first year, the kindergarten and first grades were up and running in classrooms rented to them by a local public school. But wanting to expand, Dave set about planning to build a facility that would accommodate grades K-6.

What Dave wanted wasn't just a school, but a combination community center and school. He wanted a place where parents could get involved. A place that had theatre and music and sports along with child care and even a health clinic.

For the most part, the board was supportive, but some members had serious concerns. They wondered how Dave could maintain basic operations while devoting significant amounts of time and money to his new goal. And Dave knew that many board members weren't eager to commit their funds while the economy was so gloomy.

But Dave felt they couldn't sit back and wait. He already had waiting lists for the kindergarten class in the fall. The first graders would soon be ready for second grade, and next year he'd need classrooms for the third graders.

In meeting after meeting, Alex, one of the newer board members, sat quietly and attentively, listening and asking questions. He'd been involved as a volunteer for some years and knew firsthand the challenges young people in the community faced. His quiet and thoughtful ways had already earned him respect among the others at the table, but no one anticipated the way he would act on his commitment.

One day, after a particularly challenging meeting, Alex showed up unexpectedly at Dave's office. Fearing the worst, Dave asked his assistant to hold his calls.

Alex began the conversation in his characteristically understated way, telling Dave how important the organization was to him. He predicted dire financial times ahead but still felt they should move ahead with his plans for a new building.

"This isn't the time to stop growing," Alex said. "This downturn offers opportunities that'll disappear when conditions improve."

Then he added, "I know you'll have to invest to get the plans shovel-ready, so I've decided to cover these costs." With that, he handed Dave a check for $1 million!

Alex's extraordinary gift did much more than provide the planning funds. It created a sense of credibility and inevitability for the project. Board members who had been skeptical stopped their carping. They knew that when the project took clear form—with a site, a plan, and a budget—they'd be asked to give. And because Alex set the standard, they'd be more likely to stretch.

To be sure, Alex's gift was a surprise, but it didn't come out of nowhere. He had been intimately involved with the organization for many years. He had served as a volunteer in the programs, working with a group of young people from the time they were eight until they went to college. Alex had also attended early planning meetings for the project.

My point is, if you've involved people who are capable of making large gifts in the early steps of your fundraising, you'll be ready to ask them for their commitments without much fuss. One of the counter-intuitive aspects of well-executed fundraising is that the largest gifts are often the easiest to secure. You won't need fancy proposals or glossy brochures. But, unlike Dave, in most cases you will need to ask.

Andrea Kihlstedt
© 2010, Emerson & Church Publishers. Excerpted from How to Raise $1 Million (or More!) in 10 Bite-Sized Steps; excerpted with permission.

Andrea Kihlstedt is fascinated by what makes people tick. She has spent the last 28 years as a capital campaign consultant, working with organizations large and small, giving her ample opportunities to observe remarkable people who through their courage, commitment, and energies make our world a better place through fundraising. For more information, visit, a Web site designed to provide tools that inform, support, and motivate people to go out and ask for gifts.

GuideStar Membership Wants YOU!

The following is a post from Lauren Walinsky, Membership Director, GuideStar. You can email Lauren directly at

Getting out of Washington to learn what really matters

The news here – most of it political – is unrelentingly sour: no budgets, no agreements on deficit reduction, charges and counter charges about regulation, and an unwillingness to compromise on any issue of substance. The Republican presidential primaries are adding to the depression. To hear them talk, our country is near collapse and it’s all the fault of the president, misguided policies and over-regulation. TV is no place to escape either since we are constantly bombarded with special interest advertisements reminding us about how our government has put us on the road to ruin.