The challenge of nonprofit fundraising

When someone starts a business, they spend a bunch of time with a business plan, working to raise funds and get it off the ground. After that, though, the purpose of the business is completely aligned with the idea of not running out of money. We run a business to make money, not to spend it. If done well, there’s no more fundraising after a startup period.

On the other hand, nonprofits sign up to do at least two things.

They’re here to solve a problem, to address trauma, to enrich the culture, to do the difficult work that we’re not always able to do on our own.

And yet, at the same time, we require them to raise money. Not just for a little while, but all the time.

The more successful they become, the more money they need to raise.

Along the way, it’s not unusual for a nonprofit to spend 50% of the money they raise on the expense of raising more money. That’s not because they’re inefficient, it’s because we are.

We demand a gala, or an emergency, or artfully written fundraising letters. Donors want personal attention from the folks who are ostensibly doing the front line or strategic work of the nonprofit, and treat regular donations as an exception, not the standard.

When the internet arrived, it dramatically lowered the transactional costs in a wide variety of industries. You can buy an airline ticket yourself faster and with less intervention than through a travel agent. You can buy stocks for transaction fees that are a tiny fraction of what a broker used to charge. But creative and effective nonprofit fundraising has been stuck in a cycle of risk, galas and uncertainty.

GOODBIDS is making it easier for a nonprofit to create an event that might capture the attention of regular donors as well as new ones. It still requires some effort to secure the prizes, but our tool significantly leverages the work of the nonprofit and the fee we charge the nonprofit is a tiny fraction of what it usually costs to do fundraising.

Today’s new auctions are rare collectibles donated by special friends:

Her father baked a chandelier for Salvador Dali, and this is your chance to have a handmade work of art from the world’s most famous bakery.

Apple sponsored these luxurious jackets for the crew on the original movie. Guy signed his for you, making it doubly collectible.

I hope you’ll check out how positive auctions are working for charities you care about.

PS bonus tip: Each Goodbids auction has an end date and time, but the auction is automatically extended when someone bids near the end of the window. That means that there’s no benefit to waiting until the last minute, because there isn’t a last minute–the auction keeps running until the bidding is done.