At ATE Chandra Basis, we’ve been carefully learning and investing in capability constructing within the social sector. In recent times, our work has proven us that nonprofits are always grappling with fluctuating budgets, whether or not because of FCRA-related uncertainties, the priorities of a basis, or CSR budgets being tied to company efficiency. Donors are additionally beginning to demand rigorous due diligence and extra measurable outcomes, apart from wanting into long-term principle of change and sustainability. 

On this context, we consider that nonprofit management and boards can not afford to be passive recipients of grants. They have to grow to be much more strategic of their actions, equipping themselves with the capabilities to scout, onboard, and retain donors whereas additionally fostering long-term engagement. Fundraising should now remodel right into a staff perform, supported by the board, led by devoted professionals, and powered by sturdy inside techniques.  

Shortage and its prices 

Our efforts in the direction of capability constructing and observing the sector over the previous decade have revealed a persistent sample: organisations usually acknowledge the necessity for fundraising help however not often prioritise it. Even boards and CEOs are sometimes reluctant to allocate assets to something deemed ‘non-programmatic’. Funders overwhelmingly encourage channelling as a lot of each rupee into programme supply as attainable, overlooking a easy fact—a practice doesn’t go far with no well-oiled engine. 

That is what we now recognise as a shortage mindset, the place the concern of useful resource limitations perpetuates underinvestment within the very techniques that would unlock development. To problem this mindset, we started experimenting with a unique method greater than 10 years in the past: as an alternative of programmatic funding, we offered grants particularly for constructing core capabilities resembling fundraising, communications, HR, and monitoring and analysis (M&E). 

In 2024, we performed an influence research on 11 of our nonprofit companions whom we had supported with multi-year grants over the span of a decade. This helped us perceive the long-term results of investments in fundraising. 

What the info tells us 

In the beginning of our engagement, the cohort was made up of not start-ups however mature and credible organisations—17 years previous on common—working throughout service supply, advocacy, and analysis. These nonprofits had a median annual price range of INR 4.2 crore, and our help at an annual median grant of INR 9 lakh was modest in that context. Nevertheless, this was a major quantity when thought of as a share of their complete overhead price. The grant was centered on fundraising and usually lasted between 4 and eight years. 

On evaluating baseline knowledge from FY 2013 to knowledge from FY 2024, right here’s what we discovered: 

• The nonprofits noticed a median development of 23 p.c of their annual price range. 

• Their donor base grew by 2.5x, with retention charges bettering from 50 p.c to 70 p.c. The typical grant measurement elevated by 66 p.c. 

• The nonprofits recovered the prices related to hiring fundraising workers in only one to 4 months, with tech-enabled fundraising yielding quicker returns.  

What works: Classes from the sphere 

Past the metrics, we unearthed beneficial insights about what allows profitable fundraising transformation. Capability constructing, we discovered, isn’t linear; it calls for experimentation, occasional failure, and fixed adaptation. Sure greatest practices have persistently helped in transferring the needle: 

1. Strategic fundraising plans 

Nonprofits that embedded fundraising into their core operations—by defining goal donor profiles, grant sizes, and retention methods—shifted from reactive efforts to a proactive engine for development. It helped organisations to have clearly outlined goals for fundraising, align the management staff on their position, and leverage their community of supporters and well-wishers extra successfully.   

2. Devoted fundraising professionals 

When a nonprofit’s price range crosses INR 1 crore, which is normally once they have established proof of idea and have at the very least one examined flagship programme with the potential to scale, it’s time to herald extra professionals. These people don’t substitute the founder—they amplify their efforts. Within the preliminary years, this results in a rise in fundraising prices, pushing them to as excessive as 4–5 p.c of the full price range. Nevertheless, as operations scale and nonprofits grow to be extra environment friendly, this usually drops to roughly 2–3 p.c. 

3. Leveraging know-how 

Donor CRMs and automation instruments have remodeled how nonprofits interact stakeholders. One organisation within the research was in a position to make use of a CRM platform to streamline scholarships, alumni engagement, and coaching. With higher knowledge and personalised outreach, lots of their alumni grew to become lively donors. Their contributions grew from INR 21 lakh in FY 2011 from 195 alumni to INR 4.2 crore in FY 2022 from greater than 1,500 alumni, showcasing the ability of tech-enabled engagement. 

4. Efficient communication 

Fundraising is about each asking and storytelling. Excessive-performing nonprofits saved donors knowledgeable, engaged, and linked to the trigger. They constructed relationships not solely with main contacts but additionally throughout ranges inside donor organisations, strengthening belief and transparency. 

5. Steady evaluation and adaptation 

No fundraising technique stays efficient without end. Nonprofits that frequently revisit their plans and align assets with evolving targets are much more prone to maintain momentum. One organisation in our research skilled this firsthand when it confronted the danger of shutting down throughout COVID-19 after a significant donor withdrew help. In response, they diversified their donor base whereas additionally prioritising retail fundraising. With a focused method, they elevated their particular person donor base from simply 10 in FY 2019 to greater than 500 in FY 2021—a 50-fold enhance. 

This instance displays a broader pattern. A decade in the past, many nonprofits dismissed CSR as irrelevant, whereas others relied on just a few reputed international donors. Earlier than the COVID-19 pandemic, the thought of constructing even a small corpus was usually ignored. Right now, the necessity to put money into retail fundraising nonetheless goes largely unacknowledged. But, the sector continues to show that the fundraising panorama is continually altering. Those that fail to adapt threat being left behind. 

Challenges that hindered development 

Whereas the aforementioned methods labored, the journey isn’t all the time easy crusing. The research discovered that quite a lot of challenges inhibit nonprofits from maximising their fundraising efforts. These embody: 

1. Restricted advocacy for corpus funding 

Donors usually understand corpus contributions as administrative or missing in influence, making them hesitant to help long-term monetary resilience. They as an alternative prioritise programmatic funding with seen, short-term outcomes. Concurrently, nonprofits not often make a compelling case for corpus funding. When centered on instant programme wants, they fail to speak how a corpus allows operational continuity and sustainability. This limits nonprofits’ means to lift any vital corpus funds. 

2. The battle to interact senior fundraisers

A number of nonprofits within the cohort struggled with deciding whether or not to rent senior fundraising professionals. For organisations implementing advanced interventions or needing to construct deep relationships with donors, hiring a senior skilled alone didn’t sufficiently meet their core necessities. These organisations usually wanted structured, process-oriented help—resembling conducting in-depth donor analysis, sustaining donor pipelines, and dealing with common reporting—which might usually be extra effectively managed by junior personnel. In such eventualities, founders or senior leaders nonetheless needed to dedicate appreciable time to fundraising efforts, as their direct involvement remained vital for securing funds.  

3. Underinvestment in retail fundraising

Most nonprofits deprioritised retail fundraising, with just one organisation within the research actively investing in and implementing a retail fundraising technique. The bulk centered their efforts on establishment constructing, usually neglecting retail giving due to the excessive perceived price of creating and sustaining such initiatives and their restricted capability to take action. Nevertheless, retail donations supply versatile, untied funding and assist construct a broader help base. It’s subsequently essential for nonprofits to think about this largely untapped alternative and discover artistic approaches to interact on a regular basis donors in contributing to social influence. 

Fundraising as a shared accountability 

The way forward for fundraising shouldn’t be the accountability of nonprofits alone. Donors should additionally rethink how they help the sector. It’s time for us to cease asking nonprofits to always show their value whereas denying them the means to take action. If we wish stronger, extra resilient organisations, we should help them in constructing the foundations that enable them to thrive. 

We urge nonprofits to construct their roadmaps, rent extra individuals in fundraising and different facets of organisational capability, and put money into their very own resilience. Equally, we encourage our fellow funders to ask not simply what their funding delivers, however what it unlocks. 

Relating to organisational capability, it’s time for us to shift from shortage to abundance. 

Disclaimer: IDR is funded by ATE Chandra Basis

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Know extra 

• Learn ATECF’s research on the influence of strategic investments on fundraising success.  
• Be taught extra about what two nonprofits did to construct their fundraising muscle.