For nonprofits, especially new ones, donations contribute to the organization’s lifeblood. With that in mind, it would make sense for nonprofit leaders to accept any donations that help them reach goals and continue to operate.
Nonprofit partnerships are widespread in the corporate world because they enable businesses and enterprises to join forces with a philanthropic outlet to improve their public profile and the community simultaneously. Workplace giving raises more than $5 billion annually, according to Nonprofits Source.
As an organization that runs on donations, it’s logical for a nonprofit to want a piece of that giving. That said, there are times when it’s essential to look more critically at a gift.
Avoid the “devil” in the details
Similar to Descartes’ “evil demon” argument, there’s the concept of “demon donors” in the nonprofit world. These are people who want to elevate their brand by donating money linked to practices that conflict with a nonprofit’s stated mission. Demon donors are in it for the positive publicity rather than the greater good.
Nonprofits have to make tough decisions regarding demon donors, and they can face public backlash if they partner with the wrong people. Donations are a vital measurement of a nonprofit’s success, but money shouldn’t outrank the desire — and need — to stay closely tied to your goals and mission statements.
It can be tough to discern the nature of every single donation, though. Sometimes, donors have motives and intentions unrelated to serving the greater good. As a nonprofit leader, it’s essential to evaluate each contribution to ensure it’s made in good faith and not with any strings attached.
Being a new nonprofit is exciting — and challenging
Established nonprofits may be comfortable turning down donations that don’t mesh with their values and mission, but that’s a more challenging task for newer organizations. These fledgling groups likely don’t have a deep donor pool, and a choice to reject one donation could have ripple effects for all operations across the board.
New nonprofits face unique issues that can make it more challenging to collect donations and build a roster of reliable donors. Those barriers include:
Miscalculating financial needs
Many new nonprofits find themselves underestimating how much capital is needed to complete a project and then discover that the donation won’t cover the initiative’s expenses. Poor implementation or project processing can lead to an organization not having the funds or volunteers necessary to see things through. This lack of funds can prevent nonprofits from getting more volunteers and widening their reach.
Collecting gifts from certain sources
Another area that less-established nonprofits should focus on is the methods of the contributions themselves. These organizations are generally better at reserving and spending donations to meet their goals when they have a balance.
It can be tough to determine the right mix of donation streams, but focusing your organization’s efforts on not underdoing or overdoing donation sources can help ensure that you have the funds to reach your goals.
Lacking the necessary credibility
While most people are inclined to support a cause they believe in, they’re careful about where they choose to donate. Hardly anyone will give their hard-earned money to an organization without conducting thorough research or consulting peers. If your nonprofit doesn’t come up in potential donors’ research or conversations, you aren’t likely to see their money hit your organization’s bank account.
Additionally, building a strong foundation comes from encouraging donors to give repeatedly rather than just once. That comes from providing your donors with a return on their investments.
In other words, your nonprofit needs to provide donors with some value in exchange for their continued support.
Deciding on donations
Not every gift is what it appears to be on the surface, so it’s essential to ensure that the ones you take are in lockstep with your nonprofit’s big-picture values and objectives.
Here are four ways nonprofit leaders can ensure the donations they accept are on the up and up:
1. Stay laser-focused on your mission statement
The world changes around us pretty rapidly. It’s easy for the need that your nonprofit addresses to evolve into something different, meaning that you have to make difficult decisions about which goals to retain and which ones to set aside.
Organizations with this level of focus decline opportunities that don’t align with their goals, choosing instead to take on challenges that can move their nonprofits forward. This is easier said than done when it comes to runway cash, but successful nonprofits are used to making difficult decisions.
2. Consider instituting ‘know your donor’ obligations
This approach can help your potential donors understand your mission and values. It will also allow your organization to accept donations only from those that are in alignment with your nonprofit.
While you can’t ensure that gifts from misaligned donors are never accepted, your organization can still make a difference by educating donors and helping them change their behaviors. In the future, you’ll set a standard that all potential donors must hit.
3. Find a nonprofit to model your organization after
Similar organizations can provide an example for your group to follow and open the door for collaboration. Look to those outfits to help build the blueprint for your donation process.
To go a step further, networking with the leaders of these organizations might provide you with better processes and guidelines for auditing donations. To bring your approach into focus, find ways to pick the brains of other organizations — directly and indirectly.
4. Figure out whether donors view you as a vendor or a partner
While your donors likely have some valuable insights that can help your organization grow on a larger scale, some donors have other goals in mind. Occasionally, donors are searching for help completing a particular project and accomplishing their intentions rather than looking for a partner organization.
These “pay to play” donors can be tempting, but they might take you away from working toward your nonprofit’s vision. It can be difficult to grow these relationships because the “partner” for your nonprofit isn’t invested in your organization’s mission and goals — and isn’t likely to be a repeat donor.
Many nonprofits have adopted an approach that allows donors to decide how the funds they provide are used. While your organization may be reliant on gifts, you have the power to ensure that those donations contribute to your nonprofit’s mission — not anyone else’s.
Find success with donors that align with your mission
Nonprofits are built with a vision and value in mind. Neither should be compromised for the sake of a sizable donation. Making an early commitment to only seeking out gifts from ethical donors establishes those standards early and helps build the blueprint needed for nonprofits to achieve long-term success.