Top 3 Risks Affecting Nonprofit Fundraisers

How to manage common fundraising risks.

Many nonprofits rely on fundraisers to continue their important operations. What many don’t realize is that fundraising can be an inherently risky process. This is because two different departments handle risk management and fundraising. When these two teams operate without consulting one another, it creates unique risks for the nonprofit. Any organization that relies on fundraising should familiarize themselves with these top fundraising risks and how to manage them.

#1: Falling short of fundraising goals

Missing fundraising goals by a few hundred dollars does not mean the end of a nonprofit. However, missing the mark by thousands can hinder operations. There are several reasons why fundraisers fail, from setting unrealistic goals to taking long-term donor for granted. To prevent this issue, the fundraising organizers should set up a realistic goal, tune into unique selling points, and keep donors involved.

#2: Confusing compliance with transparency

More than ever, donors want to know how their donation helps the nonprofit, who leads the organization, and how effective the charity is in carrying out its mission. Additionally, the government requires nonprofits to disclose certain pieces of information. Transparency is a conscious decision to disclose information their donors want to know. If a nonprofit refuses to answer a donor’s question about where their donations go, the donor will assume that the organization has something to hide.

#3: Ignoring donor requests

Ignoring a donor’s request for how to use his or her donation can have devastating results. Donors who make significant contributions often include instructions on how they would prefer the nonprofit use their funds. If the nonprofit ignores these directives, they may lose the donor or find themselves in court.

Make sure that your nonprofit is properly covered. Contact the experts at Colorado Nonprofit Insurance Agency, part of HUB International in Denver, Colorado at 303-894-0298. We will work with you to ensure you are getting the most out of your coverage.