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Online Fundraising: It’s Not About the Money! (Part 2 – New Donor Acquisition)

Back in July I wrote my 1st part to this series, where I talked about how there are many reasons a nonprofit should be fundraising and that money should be the least important reason why your organization jumps into the online fundraising game. This is the second part of a 4 part blog series on why your organization should be doing online fundraising.

At GiveGab, we’ve had the opportunity to talk with lots of nonprofits over the past year about online fundraising – how often they do it, what types of fundraising they do, is it team or peer-to-peer based, etc.  More often than not, the simple answer we hear is, “No, we haven’t done it. But we need to.”  But doesn’t everyone run online fundraising campaigns, you may ask?  No they don’t. Most nonprofits simply don’t.  And if you ask them why they think they need to, many respond that they see it as a trend and need to do it because others are doing it.


It’s critical that nonprofits recognize that times are “a-changin” for the better.  Online fundraising is no longer the hot trend, but rather it needs to be seen as a critical aspect in the overall annual development budget planning exercise, and here’s why (in descending priority):

  1. Engagement

  2. New Donor Acquisition

  3. Generational Pre-Requisite

  4. Money

In this blog post, I’m going to focus in on reason #2 – New Donor Acquisition.  To understand this, let’s talk about how nonprofits build their pipeline of major donors through long-term relationship building.

It’s simple… you have to start somewhere.  Nonprofits need to discover and cultivate donors and there are a lot of ways to do that.  You can hold galas, you can prepare cases and work one on one with major gift prospects, you can hold events, you can create membership programs, you can work referrals — there are a lot of ways to fill the pipeline, but many of those ways come at significant costs to your organization.  In the startup world, we call those acquisition costs or CAC (cost of acquisition of a customer).


Not every donor turns into a major gift, but just like any business, lead generation and in-turn qualified leads is a bit of a numbers game.  So how can you acquire supporters that you know care about your organization, at low costs?  Well, online fundraising, and in particular, small crowdfunding campaigns, are great at this.  If you have a small project that aligns with your cause and mission and you leverage your existing supporters’ networks through peer-to-peer efforts, you are bound to find new supporters.  If someone is willing to give you money to support what you do, you just acquired a person who cares enough about your efforts or their connection’s relation to your organization, that they are engaged enough to back you as well.  Other than your time, and any costs associated with the product you choose, you just acquired a user for a negative CAC!!!  Wow, I don’t know of many businesses that can accomplish that!

Okay, so now you’ve acquired a new supporter that may or may not become your next super giver… so what do you do to move them down the pipeline and build a long-term relationship?  Well, let’s take another chapter from startup marketing and growth and look at something called the Lean Marketing Funnel.  The Lean Marketing Funnel  proposes a 5 step framework to think about how a business moves customers through a process of attracting them to their product or service, gaining their attention, keeping them coming back, getting them to give you money, and finally referring others because they love what you do.  If you step back, this is nearly the same process that nonprofits want to achieve with their supporters.  You can see this illustrated below.


As you can see, it’s crucial that you fill the top of the funnel so that you can move your supporters down through the funnel and improve your chances for higher numbers to reach the bottom.  Along the way, you should strategize about different methods and techniques that will help bolster your conversion rates from step to step, hopefully turning your funnel into a rectangle.  Can you increase stewardship to boost your retention?  What other specifics can you think of?

We’d love to hear your opinion on this!  Have you been following this process already or a different version of it?  What has or hasn’t worked for you?