Find Biggest Challenges that Every Nonprofit Faces When Fundraising

Posted on August 24, 2021

Fundraising is your organization’s lifeblood. It’s what allows you to achieve your mission, help others and keep bringing in more resources to fund those efforts further.

But coming by those funds? That’s not easy feat.

Nonprofits face many challenges when it comes to fundraising. As fundraising is one of the main sources of revenue for nonprofits, not getting sufficient funds can be a major cause of concern for nonprofits. The challenges of fundraising are many and at times unique to the organizations. But it is equally true that fundraising has increased during the pandemic.

Nonprofits are playing an active role in helping out marginalized communities throughout the world. Whether it is a grassroots organization or an international organization, all the help provided has been extremely overwhelming.

So if things are this good for nonprofits, then why is it hard to fundraise?

Shouldn’t all the good work speak for itself and the willingness of people to give will be more than enough?

It should be easy to motivate them to donate. Unfortunately, that isn’t the case. Many nonprofits are struggling to stay above the water level as the economy takes a huge hit.

While the challenges of fundraising are complex and intricate, we will discuss multiple factors responsible for it. It is crucial to recognize and acknowledge the problems before we jump to find solutions. Let’s look at some of the more common fundraising challenges charities face nowadays – and how to overcome them and attract those dollars.

Here are some of biggest challenges every nonprofit face while fundraising:

1. Finding the Correct Target Market

The biggest hurdle to cross is finding the right platform to host the fundraiser and the people to target. Just like a business, a nonprofit also has its target market. The target market here means those people who will be moved by your work and motivated to donate to your cause. This only happens when your messaging or cause touches them emotionally.

For example, if your cause is about employing marginalized women in Australia, then it is a waste of resources to ask for fundraising from a USA businessman. He may want to donate to a cause in his country and support a local organization. Instead, if you target a women-led business in Australia, they may be more than willing to donate to your cause. And who knows, maybe offer some jobs to the marginalized women.

2. Telling your Story

Just like correct targeting, giving a clear message is another challenge in fundraising. A nonprofit is focused on many issues at once, but you have to narrow it down in such a way that the audience can comprehend the work being done.

Online fundraising efforts that aren’t based on an engaging narrative aren’t as effective as those that are. The key to a successful campaign is to tell your organization’s narrative in a way that appeals to contributors’ emotions and demonstrates the effect they can have. When people read meaningful tales, they are naturally encouraged to be giving, and stories encourage them to become more involved in your cause over time. Give your supporters exactly what they desire – how their money will be used, visual presentations, and clear organizational goals.

3. Reduced Donor Retention

Someone may give once, but donate twice or more regularly? That may be rather challenging. The value you can give to contributors is the key to maintaining them. What do they get in exchange for their contribution? Donors want to feel like they’re a part of the narrative. They dislike giving since they have no idea where their money goes or how it is used.

The most successful nonprofits include their contributors in the narrative. This may be as easy as sending out regular updates via email or social media on the job they’re doing and the lives they’re touching. Or it might be encouraging volunteers to serve with you, collaborating hand in hand in the job you’re doing.

4. Maintaining Trust in Nonprofits

The public’s trust is one of the most important elements that influence nonprofit donating. Unfortunately, when there are problems in the nonprofit sector, the media is ready to exploit the issue.

They focus on the few failing firms, which usually focus on weak leadership. As a result, individuals are discouraged from donating to charity in general. Many individuals assume that if one institution fails, all organizations are untrustworthy.

Nonprofits are meant to be the good guys. They have a goal, a vision to make the world a better place, rather than just creating money for the sake of making money. However, when it comes to receiving public funding, organizations must stick to the rules.

All this involves being as frank and open to your procedures and activities as feasible, avoiding cutting corners, and understanding your donors’ perspectives. If you don’t, you risk losing your supporters’ and audience’s faith and trust, which is the kryptonite of all charities.

5. Reaching a Standstill

Even after you’ve launched your internet fundraising campaign and gathered cash for a set period, there’s always the possibility that it may come to a halt. It can be discouraging to reach a deadlock with your fundraiser, but there are ways to re-engage your donors and keep the momentum going.

People will be more interested if you post updates about your fundraising as frequently as possible. If you convey that you’re getting close to your target, including an impact statement may even motivate further donations. This may be accomplished by segmenting your donor database and tailoring your approach to them depending on their giving history and your connection.

6. Limited Resources

During fundraising, there’s a typical trend: contributors don’t know that running a charity requires money. The majority of your resources are most likely flowing toward your main goal. Although you have enlisted the aid of volunteers, you still have a mountain of expenses to pay. There are operational expenses, administrative charges, development expenditures, and a million other things to consider.
Unfortunately, your donors are unaware of this. Misaligned expectations result from an inaccurate knowledge of the expenses of running a nonprofit. They expect to get more done for less money.

Tackling the root cause of the issue can be of help. It is the unrealistic expectations of donors. While this is a difficult road to cross, being transparent about your costs is certainly of help. Just because you don’t have a lot of money doesn’t mean you can’t get your name out there. Join forces with other local groups to benefit from each other’s skills and resources.

Co-host events and see if you can get any local media attention using free resources like social media. It may need some imagination, but the increased exposure will be well worth the effort in the end.

7. Asking Money Online

One of the most difficult aspects of internet fundraising is explicitly asking for money. Making requests might feel weird or self-promotional, but asking is very necessary if you want to raise the cash you need to work toward your purpose. Your fundraising will suffer if you bury your requests in your content or if you are unclear about what you are asking donors to do.

There are several channels where you may advertise your charity and raise cash in today’s world where everyone is online. Despite this, many organizations are struggling to stay up with technological advancements.

Instant interactions on social media platforms like Twitter, Facebook, and Instagram allow you to instantly establish a personal connection with your audience and help disseminate your message in real-time. However, having an amazing Instagram feed isn’t the only benefit of digital fundraising.

It’s all well and good to be on Twitter, but if you’re still collecting cash donations in a contactless-dominated market, you’re missing out on a whole new form of fundraising on the ground. There are several ways for charities and nonprofits to generate donations without relying on loose change, ranging from contactless payment technology to the development of new donation applications.

8. Finding New Donors

People are careful about who they give their money to. They do thorough research, they ask friends and family, and they reach out to others with their same values and ideals. If your name doesn’t come up in that research, they might not know you exist.

Though it can be hard to focus on marketing when you have such world-changing goals in mind, investing just a little time in social media or community events can make a big difference. You want your charity visible when someone’s ready and willing to give!

To overcome this situation and it may be best to use multiple ideas to make your fundraising campaign successful, you should understand what your donors expect from you and where will you find your donors. You can use storytelling to emotionally attract your donor by using email campaigns, community events, video campaigns and to build and retain donor interest.

9. Donor Retention

Someone might donate once, but getting them to donate twice or even more regularly? That can be pretty difficult. The key to retaining donors lies in the value you’re able to provide them. What are they getting in return for their donation?

Make sure you send them a personalized thank you note and keep them apprised of what their dollars are doing. Include them and commend them. Empower them to carry your message and bring in others to donate as well.

10. Lack of Resources

Most of your resources are probably going toward your overarching mission – as they should. But tight cash flow doesn’t necessarily mean you can’t get your name out there. Partner up with other organizations in your area and feed off each other’s strengths and resources.

Co-host events utilize free tools like social media and see if you can secure any local media coverage. It might take some creativity, but the added exposure will be well worth it in the end.

Great Storytelling for Fundraising

It’s very difficult to find new donors if you don’t have enough money to spend in marketing activities for your charity programs. Today, donors perform a thorough research before coming to any conclusion. A nonprofit can use 3 tips to improve through great storytelling for fundraising for ideas on their activity. Create a concrete story and be specific, use multiple channels which is suitable to target your donor and create emotional appeal to connect with your programs.

Fundraising is a forever challenge for the nonprofit industry. But it is also the industry that has survived and brought immense change in society. As our world changes, we are now moving towards online fundraising. Online fundraising comes with its challenges and having a team of experts handle it is helpful. iConnectX has a great team to assist with online fundraising and makes the process painless.

Joining a platform like iConnectX can also help put your nonprofit or charity on the map. iConnectX lets you raise funds in an easy, hands-off and, most importantly, freeway. Sign up today and see what we’re all about.