Relationship Fundraising Matters Now More Than Ever

By Ruston Pierce
Fundraising & Capital Campaign Manager | Fortify Foundation

When you are asked how to evaluate the success of a fundraiser, an underrated metric is depth and number of relationships. Forming deep connections with donors has typically been the sole course of action for securing major gifts. But as event-driven and online giving continue to grow, does relationship fundraising still matter?

In the world of fundraising, a lot has changed. Amid the rise of digital and text-based campaigns and set-and-forget subscription models, we’re again asking the same question: Is relationship fundraising still important?  I would argue it’s more important now than ever.

What do we mean by “relationship fundraising”? 

Relationship fundraising is an approach that prioritizes donor relationships over any single donation. It is defined by:

• A longer-term focus on donors, with a belief that they should not be exploited for short-term gain.  
• A two-way flow of information to ensure that both the organization and the donor are mutually engaged in and benefiting from the relationship. 

This differs from transactional fundraising, which primarily focuses on soliciting donations and is more of a short-term strategy. Organizations often use transactional fundraising techniques to get a quick influx of cash. One-night events, one day text campaigns, and short term, low amount campaigns have become the easy way to fundraise.  

Many nonprofits see great success with transactional fundraising. The problem arises when a drive for quick and easy donations is the only tool in your toolbox. With no relationship to fall back on, donors will have little reason to stick around.  People who have capacity want to feel connected to the mission they support.  If the relationship isn’t thriving, the donor will find another mission to support.  

The Stakes are Getting Higher 

Most donors with capacity are overwhelmed with multiple giving requests every day. The number of donors nationally is shrinking, but ironically, the giving is going up.  That means keeping current donors is crucial because it is very difficult to cultivate new donors.  With so many hands out, donors will often choose one or two organizations that best reflect their values. If they’ve only ever transacted with your organization, you likely won’t be on their list.

Increased competition for donor dollars signals a critical need to move away from a reliance on transactional fundraising and focus on building genuine relationships instead. This approach fosters long-term trust and loyalty which are key components that will retain donors and further your mission.

Covid is Still Impacting Us

It’s hard to overstate the impact of the COVID-19 pandemic on the nonprofit sector. This challenging time introduced significant shifts in both donor behavior and organizational action.

While some organizations may have been on the fence about “digital transformation” before, the early days of the pandemic forced fundraising efforts online. The need to adapt away from in-person events brought many fundraisers into the virtual world. They adopted new technologies, digital solutions, and tools quickly.  However, once we were able to get together in person again, many organizations forgot to reconnect with their donors.  The convenience of digital fundraising programs became very attractive.

Another issue from the pandemic was loss of employees or revenue-related cuts.  Many fundraisers lost their jobs due to an inability to meet in person.  Revenue dropped and there was no way to replace it once government assistance stopped.  Many organizations were fearful to rehire those individuals without assurance the former giving would return.  Wise organizations should prioritize bringing back their relationships in fundraising because there will be times when significant gifts are needed that an event cannot possibly raise.

Economic Uncertainty

Local economy can be different across the country. In many areas of the country, the gap between the “haves and have nots” is very profound. If your organization is in one of these areas, it is very important that you are focused on relationship building with these individuals who can make transformational gifts.  The general population in your areas cannot support your events or online campaigns because they are concerned for their own budgets.

If you aren’t sure if you live in one of these areas, you could monitor a few things.  How does the price of everyday living expenses affect the size of donations? How do national and/or geo-political issues impact your local economy?  If you believe your constituency is negatively impacted by these questions, then it is very important you are leaning on your relationships with high-capacity individuals.

Nonprofit organizations have the enviable position of giving people the opportunity to feel a unique sense of meaning and purpose when they donate. This is even more important in an inconsistent economy. The personal, long-term approach of relationship fundraising offers more potential to deliver connection, helping your donors to feel like they are a valued partner in your mission.

Giving to Advancement

If you are a school leader, you have watched fundraising change over the years.  We have a bad habit of chasing the shiny thing rather than focusing on developing strong, long-term relationships with individuals who can make transformational gifts.  With proactive planning in our revenue, and reduced dependence on fundraising to make budget, we can show our donors that their gift is truly advancing our mission.  Donors want to know their gift is moving the needle.  Transactional fundraising through events and online campaigns are helpful, but they are typically tied to meeting a short-term need.  Those gifts do not move the needle and turn off major donors.  Having a clear understanding of how to point donors to your mission is crucial to the long-term sustainability of your organization.

Moving from transactional to relational fundraising doesn’t happen overnight. As any matured development department will tell you, there must be a plan in place to ensure no opportunity is missed and there is a steady rhythm of touchpoints throughout the year. 

What does this look like for your school? Are you intentional in building one on one relationships with your donors? Do you have a written plan that helps to keep you on track? These are the key questions to changing course and building a proper advancement program.