2023 Online Fundraising Tips for Nonprofits

by: Nicole Davis
Verified by: CPA

May 16, 2023

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Recent years have seen the importance of online fundraising grow for nonprofit organizations –particularly those in the arts and culture space. During the pandemic, online fundraising represented a lifeline to many organizations. Many nonprofits with a well-established online presence were able to use online campaigns to attract vital donor dollars that sustained them when their facilities were closed for months on end. 

Since then, many nonprofits have made it a strategic priority to strengthen their online fundraising capabilities. It’s a strategy that comes with minimal downside risk and many benefits, from expanding an organization’s donor base to improving the ease with which donors can give. 

Achieving these benefits is only possible when nonprofit leaders follow the established best practices for online fundraising. This is a competitive space and it’s vital to build an online fundraising strategy that communicates your nonprofit’s mission and impacts it in a highly effective way. 

Smith + Howard is a full-service accounting and advisory firm that serves established nonprofits around the nation. Our highly-specialized nonprofit accounting team is available to advise nonprofit leaders on a variety of issues. Contact an advisor today to learn more. 

Six Online Fundraising Tips for Nonprofits

Nonprofit executives can improve the efficiency of their online fundraising campaigns by adopting the six tips provided below. 

1. Make It Easy for Donors

One of the primary drivers of effective online fundraising campaigns is convenience. Many nonprofits have embraced online fundraising platforms to provide donors with a simplified, streamlined experience that makes donations easy.

This donor-centric approach eliminates barriers to online giving, ensuring donors can contribute in just a couple of minutes with a few clicks. Generally, if the process is too complicated, donors are less likely to give, so the goal is to make donating as seamless as possible for your audience. Popular fundraising platforms include Blackbaud, Blooomerang, and DonorDrive. 

2. An Experience Built on Strategy

Any online fundraising campaign should begin with a comprehensive marketing strategy. Determining the target audience and how to reach them is a key consideration in that strategy. That is followed by ensuring that your audience has an exceptional experience when they arrive at your web site. 

Online fundraising requires effective storytelling. Take the time to craft a strong narrative around the mission and impact of your nonprofit, use high-quality photography that brings your story to life, and make campaigns sharable to expand their reach. 

3. Maintain a Donor Database

A donor database is a vital asset to any fundraising campaign: online or offline. It enables nonprofits to reach out to previous donors with targeted messaging about new campaigns. Consider using a Customer Relationship Management (CRM) tool specifically designed for this purpose to automate this process. Popular tools include Neon CRM, DonorSnap, and DonorPerfect. 

Nonprofits must remain cognizant of the information security requirements that come with managing sensitive donor information. Donor information must be kept completely confidential – after all, a data breach could have significant consequences. Storing donor information in an established software platform, such as the CRM tools mentioned above, may offer higher levels of security than managing this data internally, say, in an Excel spreadsheet. 

4. Offer Donors Options

In many nonprofits, donors are an economically diverse group. While some donors might be comfortable donating thousands of dollars, others prefer to donate $100 or less. For that reason alone, nonprofits should not take a one-size-fits-all approach to online fundraising. 

Instead, offer donors a variety of options. One example: offer tiers of membership, with the more expensive tiers offering additional benefits. Nonprofits should also experiment with different suggested donation amounts: studies have found that donors tend to donate higher amounts when the suggested donations are even numbers, rather than odd numbers. 

5. Include an Online Component for In-Person Events

Today, it’s best practice for nonprofits to embrace hybrid fundraising events: in-person events that include an online component. An example of this would be a fundraising auction at an event that accepts bids online as well as in-person. The costs involved with adding this component are often minimal and tend to be outweighed by the additional exposure gained for the event.  Furthermore, these digital components can extend bidding to multiple days instead of being limited to a single night.  

6. Ensure Compliance with Reporting Requirements

Online fundraising campaigns, much like any other fundraising campaign, trigger certain reporting requirements that nonprofits must comply with. Two of the most important include:

  • Donor Acknowledgement Letters: donors must be sent a formal letter acknowledging their charitable contribution no later than January 31 of the following year, allowing donors to claim these charitable contributions on their individual tax returns. 
  • Tracking Benefit Received vs. Contribution Amount: Depending on the fundraising event, donors may receive something of tangible value in return for their donation, such as an item in auction.  Nonprofits must clarify the fair market value of this benefit since this is not tax-deductible for donors.

By investing in creating a robust nonprofit accounting infrastructure, leaders can ensure they remain in compliance with these requirements and maintain positive relationships with donors on an ongoing basis.

Smith + Howard: Nonprofit Accounting Specialists

In today’s digital economy, all nonprofit organizations should be investing in building effective online fundraising campaigns. Following the tips outlined in this guide is a great place to start, but every nonprofit is unique and demands a bespoke approach. 

At Smith + Howard, we’re passionate supporters of the nonprofit sector. We sponsor, attend, and support the fundraising events of many of our nonprofit accounting clients, and work diligently to ensure nonprofits are fulfilling their financial commitments. Our specialized nonprofit accounting team provides a wide range of services to nonprofit clients, including audit, tax, cyber risk assessments, and more. 

Interested in learning more about how Smith + Howard can support your nonprofit accounting needs? Contact an advisor today.

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If you have any questions and would like to connect with a team member please call 404-874-6244 or contact an advisor below.