Whether you’re trying to engage with potential donors or you’re in charge of donor relations at your nonprofit, it’s important to know what they want to see and hear. These are the basics: how your organization serves the community, how your donors’ money is used, and how you plan to achieve your mission. By engaging with potential donors, you can increase your chances of success.
The first thing a potential donor wants to know is how their money is being spent. To that end, nonprofits should have detailed financial statements available. In addition, they should be sure to have records, such as a credit card receipt, for cash contributions. These documents can help donors feel confident in their donation.
Donors also want to know how much of their donation goes to mission and overhead expenses, and how much goes to programs and other operations. This information is particularly important for larger or longer-term donations. They also want to know how the nonprofit will keep their money safe. By having a proper safeguarding process in place, you can minimize the likelihood of litigation.
Donors also want to know about the nonprofit’s best practices. For example, an employee giving program lets staff donate a portion of their paychecks to a nonprofit. This is a great way for them to give regularly. However, nonprofits should also be sure to remind them that there are other ways they can stay involved. The following tips can help you with this.
A donor should be familiar with the financial accounting standards established by the Financial Accounting Standards Board (FASB). The FASB has created Accounting Statement Update 2016-14. This new form is a major update that changed the way nonprofits report liquidity and assets.
Aside from a well-maintained financial statement, a nonprofit should also know the best practices for operational management. These include: identifying the best and most efficient ways to engage with donors; researching new organizations and communities to determine whether or not they are a good fit for your nonprofit; and leveraging your professional network.
Finally, you should have a well-written strategic plan in place. It may be worth your while to hire an expert in the field to help with the major legwork. While this may be costly, it can be worth the expense for a nonprofit looking to maximize its effectiveness.
The best way to find major donors is to use business affiliations, such as professional associations. These networks are a great place to find potential donors because they often include people who are involved with nonprofits. They can also help you estimate the wealth of potential donors.
A well-written strategic plan can also demonstrate to potential donors how you will use their money. For example, the strategic plan can show how your organization’s resources will help solve pressing challenges in the community. By demonstrating how your organization’s resources will be used to solve a problem, you can motivate repeat donors.
Finally, nonprofits should remember that they have a fiduciary duty to their donors. If you don’t follow best practices in your nonprofit’s operational management, you could find yourself in legal hot water. Litigation can harm your reputation and take away resources that you intend to use for your nonprofit’s mission.