According to research from Charitable Impact, 56% of charities have annual revenues of less than $200,000. Within this group of small charities, most (35%) reported annual operating revenue between $10,000 and $49,999. That’s one in five charities in Canada. Twenty-one percent had revenues between $50,000 and $99,999, and twenty-two percent had revenues between $100,000 and $200,000.

This means that just over half of registered charities in Canada function on a much smaller scale or budget, which has important implications for how you operate and what you can realistically achieve. The challenge for small shops (and what makes them unique) is threefold: They have limited time, limited resources (financial and human), and a need for strategic fundraising knowledge and capacity.

Time

Effective time management is crucial for small shops, especially given the significant time demands of paperwork and reports. Since it's impossible to do everything, prioritize fundraising strategies and initiatives that offer the highest return on investment, given your available resources. Carefully plan your fundraising calendar to avoid overloading your schedule (e.g. avoid scheduling an event when the annual report is due).

Make time to thank donors. It’s easier to hang onto your existing donors than find new ones. People underestimate the importance of thanking people for their gifts. There is ample evidence suggesting that first-time donors who do not feel adequately thanked are less likely to make a second gift. If you are supported by grants, one of the stipulations often is how you plan to thank them.

Resources – Financial and human capital

Finding adequate resources to achieve their mission is probably the biggest challenge for small nonprofits. Many will turn to grants in this situation, but honestly, that might not be their best bet. If you're in the U.S. right now, it certainly isn't and Canada may not be far behind.

Events may be your second choice, and this is actually a good strategy for smaller nonprofits. First, they require volunteers who could (ideally) become financial supporters. More importantly, events also help raise awareness. Depending on the event, you likely won't make a lot of money, especially if this is your first event and you are running it yourself. However, for a smaller nonprofit, hosting an event can be beneficial if you can build awareness and raise some funds. This means you need to know how to recruit volunteers—which could present another challenge.

I always recommend building relationships with your donors and actively seeking major donors who can provide financial support. However, it can be challenging to get started without a donor list. Events are an excellent way to build that list. You know attendees are interested in your cause and you use data from the event to develop a direct mail program.

Strategic fundraising knowledge

Small nonprofits tend to face significant challenges in knowing how to execute some of the strategies I’ve just discussed. How do we run an event? How do we recruit volunteers? What do I even say to a major donor? I hate to say it, but this is often why an organization applies for grants: they lack the capacity to do much else.

One option is to outsource some of this work to expert professionals on a part-time basis. The industry is evolving and part-time, fractional, or contract fundraisers—we haven’t settled on a name yet and the definitions are still fluid—are becoming more abundant in our workforce. (Read more on this in my previous articles, “What Happens When Fundraisers Leave,” and “Is it Really About The Money”.) These fundraisers are accessible to you at a fraction of what you would pay to hire them full-time, and you will likely get similar results. This approach can also be used for events, direct response, communications, and even grant writing. They come at varying levels of cost, and some initiatives could also be accomplished with the right volunteers if you are skilled at recruiting and managing volunteers.

I would not outsource major gifts or building relationships with your most supportive donors. You should know who your top donors are and be able to talk with them on the phone. If you don’t have anyone to call, other than your grant funders, you have some work to do building a donor base and capacity-building in fundraising for yourself, your staff, or volunteers. Numerous options are available: seminars and webinars, conferences and one-on-one coaching. Each can be a good choice, depending on your budget and desired outcomes. If you envision a career in the nonprofit sector, investing in your own fundraising knowledge is always a wise choice.

Conclusion

Sometimes, organizations are not focused on fundraising and building relationships with donors; they simply want money. I don’t believe this is a deliberate choice; rather, they become overwhelmed by the need to meet a budget. I assure you that your top supporters share your passion and are eager to help you fulfill your mission. Therefore, take the time to include them and be honest about your needs. You might be surprised by how they respond.

Michelle has over 20 years of experience in fundraising and non-profit development both as a consultant and as part of an executive team. With a Master of Arts degree in Philanthropy & Development from Saint Mary’s University in Minnesota, Michelle has both theoretical and practical experience in fundraising. As an author, consultant and public speaker, with a specialty in small shop and faith-based fundraising, Michelle is driven by a passion to help organizations like yours achieve their fundraising and strategic goals.