Fundraising Tips for Very Small Nonprofits with Erik Hanberg

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There are more than 1.5 million tax-exempt organizations in the United States (National Center for Charitable Statistics), and recent estimates indicate that about 12.3 million people work in the nonprofit sector. It is estimated that three-quarters of American nonprofits have budgets under $1 million but there are many that are even smaller.

In this episode, I sit down with Erik Hanberg, author of four books for very small nonprofits, to find out how small nonprofits can fundraise, where they should focus their limited time and resources, and how to get it all done with a tiny staff (maybe of 1 person). 

Erik Hanberg has spent 20 years working with nonprofits. In addition to serving as the director of two nonprofits, he has served as an Interim ED twice and worked for nonprofits in marketing and fundraising. He has also served on boards and committees for more than a dozen organizations, often in leadership roles, and several times during a capital campaign.

He is the author of four books for nonprofits, focusing on nonprofit management, fundraising, social media, and board governance, which have collectively sold tens of thousands of copies. They’ve been praised as essential reads for nonprofits by Forbes.com, LinkedIn for Nonprofits, Kirkus Reviews, and thousands of executive directors and board members.

Connect with Erik:

• Twitter:  https://twitter.com/erikhanberg
• LinkedIn:   https://www.linkedin.com/in/erikhanberg/
• Instagram:   https://www.instagram.com/erikhanberg/

About Julia Campbell, the host of the Nonprofit Nation podcast:

Named as a top thought leader by Forbes and BizTech Magazine, Julia Campbell (she/hers) is an author, coach, and speaker on a mission to make the digital world a better place.

She wrote her book, Storytelling in the Digital Age: A Guide for Nonprofits, as a roadmap for social change agents who want to build movements using engaging digital storytelling techniques. Her second book, How to Build and Mobilize a Social Media Community for Your Nonprofit, was published in 2020 as a call-to-arms for mission-driven organizations to use the power of social media to build movements.

Julia’s online courses, webinars, and keynote talks have helped hundreds of nonprofits make the shift to digital thinking and how to do effective marketing in the digital age.

Take Julia’s free nonprofit masterclass,  3 Must-Have Elements of Social Media That Converts

Take my free masterclass: 3 Must-Have Elements of Social Media Content that Converts

Transcript

Julia Campbell  0:02  
Hello, and welcome to nonprofit Nation. I'm your host, Julia Campbell. And I'm going to sit down with nonprofit industry experts, fundraisers, marketers, and everyone in between to get real and discuss what it takes to build that movement that you've been dreaming of. I created the nonprofit nation podcast to share practical wisdom and strategies to help you confidently Find Your Voice. Definitively grow your audience and effectively build your movement. If you're a nonprofit newbie, or an experienced professional, who's looking to get more visibility, reach more people and create even more impact than you're in the right place. Let's get started.

Julia Campbell  0:45  
All right. Hi, everyone. Welcome back to nonprofit nation. Another episode, thrilled to be here with you today. Thanks so much for listening. By the way, I really appreciate you taking some time out of your day to listen to this show. Today we're going to talk about something I'm passionate about. And you know, me, small nonprofits, so nonprofits with small and very small budgets, a few $100,000 a year down to the very smallest budgets. And we're going to talk about fundraising and all sorts of things, social media Board Governance. I have an expert here and author, Erik Hanberg, he spent 20 years working with nonprofits. In addition to serving as the Director of two nonprofits. He served as an interim Ed twice and worked for nonprofits in marketing and fundraising. He's also served on boards and committees for more than a dozen organizations, often in leadership roles, and several times during a capital campaign. He's the author of four books for nonprofits, focusing on the very very, very small nonprofits, which I love around nonprofit management, fundraising, social media, and board governance, which have collectively sold 10s of 1000s of copies. And now he is the director of marketing. Did I get that right? At k and k x Public Radio, in Seattle, and Tacoma. Welcome, Eric,

Erik Hanberg  2:18  
thank you so much for having me. I'm really excited to be here.

Julia Campbell  2:21  
So how did you get into this work and tell me about your current job in Public Radio, I'm a huge fan of Public Radio.

Erik Hanberg  2:28  
I'm a huge fan of public radio to and working in, it turns out to be something of a dream job for me, I fell into this work, because of a real love for my hometown of Tacoma, Washington, I just really wanted to help it out. And we've kind of had to been the underdog to Seattle. And so I started working in an economic development nonprofit helping with that, and the stars align, and I got a job running a small nonprofit movie theater. And I'm a huge film buff. So now I was, you know, supporting Tacoma in my head and also getting to work in the movies. And that was amazing. We hadn't really done any fundraising before that as a nonprofit. And so I got to, I got to start that I got to try everything basically. And lots of fits and starts lots of things were later I was like, Man, that did not work. So that was kind of my introduction. And then another job later was working in fundraising at my Catholic High School. And if you ever want to know what a fundraising machine looks like, a Catholic High School is a pretty good example of that. And they trained me and they taught me like, here's how you go about making an ask of, you know, $4,000 $10,000, whatever it is, and I watched how this like, truly professional organization did it. And I realized, like, when I was at that, at the Grand this small nonprofit movie theater, I was copying like all the wrong things, like the Catholic High School had this giant auction. And I was like, well, that's how you fundraise is with this giant auction. And when I tried to do it, it barely broke even, I realized there was way more efficient way more effective things that I could have been doing. And that got me started in the work, and really started me writing the books. And we'll touch on came kx. Can Kx is a public radio station and jazz, blues and NPR news. And I love the media I love especially these days, nonpartisan nonprofit news and the arts. So it's a really great fit, and I still get to keep working in my hometown.

Julia Campbell  4:30  
Oh, that's so great. I do love public radio, as well. So your focus with your books, has really been nonprofits with the small and very small budgets. So probably people with maybe one employee, maybe a few or maybe all volunteer organizations. So how did this start? How did this come about?

Erik Hanberg  4:52  
I think it's been my focus because, you know, let's be real who needs to help? It's not the big guys. They don't need My books, it's the small nonprofits. And I, in many ways I'm writing to my younger self, I followed a passion into this without knowing how fundraising worked without knowing what it meant to run a nonprofit to serve a board. And none of its necessarily intuitive. And so when I wrote these books, like, here's what I wish someone had given me a roadmap, you know, here's a way to start, a lot of the books that I have checked that get really wonky, they get really jargony. And I try to avoid that. And then just like, here is some simple steps. Here's some principles that you can apply. And some practical tips for hopefully, some quick wins.

Julia Campbell  5:44  
So I love that you're writing to your younger self, it's what you wish you'd known when you started out. I think that's a great way, first of all, to write a book. So I want to talk about the little book of gold, which is your fundraising book, it's been recognized by Forbes as one of the top 12 Must Read books for nonprofit employees, and by LinkedIn for nonprofits, as one of nine books for your nonprofit reading list. And also a little green light created a companion guide, and I love that they provide it free of charge to their customers, I think there's great synergy there a little green light little book of gold. So what do you teach in the little book of gold?

Erik Hanberg  6:26  
As I said, I really tried to have a lot of practical tips. But I would say as a rule, it is a how to on asking individuals for money, asking in person asking in a letter, asking in an event, pretty much as are the main focuses of that book. And I'm framing it that way in my conversation with you now because in my experience, so many nonprofits, Spot small nonprofits, try to avoid asking the fundraising strategies that they choose, are raffles restaurant takeovers, trend raisers where they're trying to get friends, but not ask them for money, all of these different things, because they're really scared of asking for money when it really comes down to it, because no one's told them how it should work, no one's given them a strategy for how to do it. And we are all a little scared of money, when it really comes down to it, we've been taught from a young age not to talk about it. And asking requires that you talk about it, you know, when I asked someone for $4,000, or $10,000, that's more than I'm going to give to that nonprofit, that's more than my budget could manage. That's an awkward situation for some people, and you need to be coached through it. And so I talked about that those in person, things I talk about in how to really make a great annual appeal letter. Sometimes people can hope well, you know, maybe I'll just send some emails, and that'll replace it when emails have such low return, you know, returns for gifts, although they can work. And then the other part of it is events. And my chapter in that is called events will kill you, after it's called events will kill you. Events will kill you. Yes, I decided to really go for it. Because, in my experience, so many people really do think of events as like, the way to fundraise. And I have worked those giant galas that raise hundreds of 1000s of dollars. And my high school, Catholic high school, I have, you know, tried to implement them as a small nonprofit, I don't think people if you haven't done it, understand how much work has gone into that event. Months and months in advance. Sometimes with like a full time person coordinating it, it just especially at a small nonprofit, they might not kill you, you know, give me a little hyperbole there, but it is going to suck the air out of out of the room for anything else they want to get done. And so even though I say events will kill you, I also give a template for something that I think is manageable. For a small nonprofit, the recommendation that I have is to really consider a a breakfast fundraiser. I like breakfast because it's the cheaper meal, you don't have the alcohol which if you've ever thrown a gala, an auction or whatever it is, figuring out the alcohol is one of those huge, huge, huge issues like either people are, you know, you're paying for it. So the ticket prices jacked up, or, and then all of your money goes to the alcohol, or they're paying for it, which means they're paying out this big event is supposed to be for you. They're paying the bar. And so you avoid that you can get people in and out relatively quickly, you know, 90 minutes maybe,

Julia Campbell  9:32  
right? They've gotta go to work. Love it.

Erik Hanberg  9:35  
They've gotta go to work. You get about the same you know, with a lunch but breakfast I think is a little bit again, a little bit cheaper. Maybe in that regard, eggs are cheap. And then if you can activate the board, especially for like a first time for this to fill tables. You know, you have six or seven board members, that's probably good for 60 to 70 people in addition to the people who are already in your donor database, so you're getting them to give again, if you can do that, well you You have a relatively cheap event with hopefully some board support. And then the key part of it is after you make the ask because you have to make the ask at the event, getting people into your systems, remembering to get them onto your newsletter remembering to ask them again at the annual appeal, using this as like the top of the funnel, so that you can get people on to all of your material and start looking for some major donors who might come out of this in the year two, it's a really profitable way to do it, I shouldn't use profit, I shouldn't say like efficient or something like that. But it works. It is a it is if you're going to do an event. It's the one that I think really makes a lot of sense for small nonprofits.

Julia Campbell  10:39  
So for a small nonprofit, first of all, if you don't have a board, how would you go about even starting? And then also, how do you get your board involved in asking for money?

Erik Hanberg  10:52  
I'll start with that second part about getting on board involved in asking for money. I think most nonprofits would benefit from just kind of a baseline. Here's what we ask of every board member and the board should agree to that. So it doesn't necessarily matter to me what those things are. But I think Director could go to their board president and say, We need consensus that can be formalized with something that I call a memorandum of understanding. And every time either at the director on a board, I tried to get this to happen, where it's just a one page thing, it's got like 10, to 12 things on it. These are the things we will do. This is what it means to be a board member, most of it's pretty simple. You know, I will attend at least 80% of the meetings and I will advocate on behalf of the nonprofit, and things like that fundraising as part of that I will be a donor to the nonprofit, I think that's getting your board involved, you should strive for 100% donations, sometimes foundations asked for that. So it's it really is I think, assumed and expected that you have 100% donors on your board. That is getting the board involved in fundraising. I like to say something like, I will participate in one to two fundraising events throughout the year, or fundraising activities. Let me revise that. So that might mean envelope stuffing, that might mean calling donors and thanking them. Those are very benign activities that any board member should be willing to do. They're not scary. I think that those are pretty uncontroversial. And then there should be something like if there's an annual event, I will fill a table, which means them activating their network, their college friends, their co workers, possibly, and trying to get 810 people to join them at a breakfast like this, will everyone do it? Some people might fall off a little bit. But if you put that expectation out there, you're gonna get I think, and have that conversation as a board. In my experience, people rise to the occasion, they at least tried to do these things. And that's the basis for an event.

Julia Campbell  12:58  
How did you see these kinds of events change in the last two years? Are they coming back? Did more events shift to digital? Do they just kind of go go on hiatus? 

Unknown Speaker  13:08  
Oh, that's such a good question. I've seen a lot of digital events with, you know, very mixed success, they started to get more and more highly produced as people figured out the technology. The board that I serve on right now we did two of these, and we didn't have a lot of success with either one. I really think in our case, we use it as just kind of like a kickoff to the end of the year campaign. And I think that when it is digital, it's worth thinking about it not just as that one day thing, but it's like part of a bigger fundraising mix. I am excited to go back into person because it is a more effective way to fundraise. But if this is where we are, then I think that that would be my recommendation is don't just treat it as like we're trying to get all these donations on this one day. We are trying to get people's attention for other ways of giving throughout this this like fundraising season, you know, because it's you're going to be getting gifts early on, you're going to be getting gifts after the event. Don't just try to pin it all on this one day.

Julia Campbell  14:13  
So where can small nonprofits find donors, especially if they're just starting out? This is a question that I get pretty frequently.

Erik Hanberg  14:21  
I really think the event is a really good place to do it because you're bringing in board members really tapping your social by which I will also include things like email and things like that. I think about concentric circles around your nonprofit like in that closest circle you have your major donors, you have your volunteers, people who really know and love you and the circle outside of it. You have just regular donors outside of that are the people on your Facebook pages, your subscribers on your newsletter outside that your people who like like you, but don't subscribe to anything. And I'd said that you have like people who would like you, if they just knew about you. And I'd said that as the general public. And so often people are like focused on the general public. And they're like, how do we get that person to give us money? And as I think you know this well enough, like what I just painted a picture of like how fundraising blends into marketing. And everyone's always focused on both marketing and fundraising on those the general public. My recommendation for for fundraising for marketing as well just try to get a visual that I hopefully just put into your head, try to get everyone one step closer, like, what is your strategy for getting the people who liked you on to your, you know, to subscribe to something? How do you get your subscribers to give for the first time? How do you give those donors to become monthly donors or major donors? It's a lot of smaller problems, as opposed to the one big problem, how do we get more donors? So that's my framework when I think about these things. And then the other thing that I would say is, don't be afraid to ask your current donors for more money, the small nonprofits, this is one of those things where a small nonprofit often really doesn't want to do this step. But it's actually where a lot of the benefits of fundraising come is building up those major donors. So you have a lot of people who give you $100 a year, that's great. How do you get some of those people to give 250, maybe you try to get a bunch of people at monthly donors at $20 a month, that'll get you to 40. And then find those people who can give 500 or 1000. So a director might take some time to choose the top five or 10, people who you know, they think are going to be their best donors, get to know him over coffee phone calls, visit them at their house, and then make that ask in person for those those things. Those people who have the potential you think, to give a little bit more, you're filling out what's called the top of the donor pyramid, where you are getting a lot of money from a fewer group of people. And it's really where the relationships pay off after usually like a couple of years. And if you have that strategy, you're getting a lot more money from even a small donor donor pool, because you're willing to make that effort you're willing to have that risk of like maybe they'll say no, like that's a an emotional risk. But if you're willing to overcome that, that's where the real power of fundraising is, and filling out that talk to you.

Julia Campbell  17:25  
I think a lot of smaller nonprofits, especially, they're trying to focus on things like you said, events, but also things like grants, or finding a rich person in the community to give them money or finding that local foundation, or that corporate sponsor. So what would you say was your advice on sort of diversifying revenue, and really, almost getting comfortable with asking individuals for money?

Erik Hanberg  17:56  
Every nonprofit has a different, what's the word I want to say? Like a different natural funding base? Some nonprofits really lend themselves to individual donations, some nonprofits really lend themselves to grants. And whichever one you are, you're probably you probably could tell Oh, yeah, we mostly get grants. Oh, yeah, we're mostly individuals, you know, the community theater probably gets a lot of individual donations, both the earned revenue from their patrons, and then their patrons, also giving them money, something you know that a shelter, let's say probably has a lot more grants, city support, state support, maybe federal support, and they probably also have individual donations, but I would guess that they're primarily reliant on some sort of grant base. So when I think about diversifying revenue when you have whichever side you're on, I really like to encourage an executive director to say, you know, what's my second or my third, smallest pieces of revenue? Like, let's say, you're 70%, reliant on grants. And so you have this remaining 30%? That's individual donations and things. Could you double that? Could you take that and double it, or let me put it a different way, this is actually even more common. I'm 90% reliant on grants, and I have this just tiny little bit of donations, that's probably a little bit more easier to double. That's how I think about diversifying is take your smaller things, those things that are the parts that like you wish you could build up, and see if you can double it over two or three years. You're probably also growing your other base, so that's good, too. But this is something that I've seen is like, I remember, I worked with this nonprofit. They had a $20 million budget, so they were definitely not a small nonprofit. But they had never asked individuals for money. It was entirely state and federal grants. And so they really were starting from scratch and the ways that many small nonprofits do and that was that was my recommendation. I was like, let's go from 1% to 2%. You know what I mean, like of your budget, like, how can you start basically from scratch and they did the same thing that I'm talking about. They started with a big event to try to get broad community support that turned those into annual appeals. And then and then major gifts eventually,

Julia Campbell  20:09  
wow, no, those are really some really great tips. So I encourage everyone, check out the little book of gold, I want to shift now, quickly to another book that you wrote The Little Book of likes. Now, this is something that my audience loves. They come to me for social media advice, digital marketing advice. So I want to ask you a question that I get every single day. I think I just got it five times today, when you're a one person shop, wearing all the hats, how can you shoehorn social media management into the work? What is your piece of advice?

Erik Hanberg  20:45  
I think a plan is definitely the best place to start. fundraising and marketing are two of the things where there's always something more you could do, you could spend your entire career doing those two things, and you'd still have more ideas and things to try. So try to come up with an advanced plan that seems reasonable, I will update my facebook page twice a week, once a week, twice a month, whatever it is, try to come up with a plan that you think you can manage. And then I also am a huge fan of batching that work if you can in advance. If blogging makes sense to you, let's say that makes sense to your nonprofit where you post inspirational stories, you're going to do that twice a month, once a month, whatever it is, keeping those things active, and then take a couple hours and see if you can write three or four months, get ahead a little bit. So those are some of the things that I tend to think about. For the very busy one person shop, I also would recommend, you know, it's worth putting a little bit of money towards some of these things, when especially when it comes to Facebook, I think it's worth putting $5 $10 towards some sort of boosting just to try to make sure it's getting out to the people who like your page, I also recommend really thinking about what the next step is. So it's great that you have an active Facebook page, Instagram, Twitter, whatever it is, what's your mechanism for getting those people on to email? What's your mechanism for getting those people off of those social media platforms, what you don't own and on to your the things that you can control a lot more. And then that it's easier to ask for money, it's easy to do those things that might be in person, you know, you might say come to this, you know, we're having a free, whatever it is. But getting them off of those things. And trying to get those relationships solidified either in real life or via email, I think is really important. Because not just you know, you don't own them. But the algorithms, all of that stuff, you just have no control over it is actually one reason why. And this is true from that I've been feeling from my time at pancakes, Public Radio, podcasting is a really interesting idea. For a small nonprofit, if you have the interest, if you have things to talk about. Again, don't just jump into it, because I said that, like really think about whether this fits for you, you can evade a lot of the algorithms, if you do half our podcast, you know, twice a month, by the end of the year, that is several hours that the listener has had you in their ear, they really feel like they know you. And when you ask for money, you know, on those two December podcasts, let's say like, you might really be surprised by what you get. This is something that I've taken from Ken tax is just the power of being in people's ears when the host asked for money during the fun drive people give. So it's something that a small nonprofit might consider, again, you know, lots of time with it. But for some people who have the interest, and who think that they would enjoy it, and who have the stories or the thoughts or the insights to share. It's a really interesting way to approach this as well. And then you have something to share to Facebook and Twitter and all of those things. Exactly. 

Julia Campbell  24:01  
It's a piece of content that you own. And you can distribute it where you want to distribute it. But your point about audio being so powerful. So that's why video is very powerful when people can see things. And they can envision them and they can connect with them. Audio is similar in that way that people are hearing a voice constantly. And if you think about how people listen to podcasts, it's much it's almost more intimate than social media. Like I check social media when I'm watching TV when I'm doing other things almost. But podcasts a lot of the time I'm in my car, I'm going for a walk, I'm folding laundry, but I'm still listening. I wish that more nonprofits would take their content that they put on social media or in their blog, or their email newsletter and make an audio file of it or make a you know create a podcast around it. I think that's A great point, we should always be looking for these ways to connect with our donors, you know, in kind of different ways, but I think that's great. So you have four books, one on nonprofit management, one on board development, the little book of legs, we talked about social media, and the little book of gold is fundraising, you said, you have a bundle of all of the books offered on your website, and I know that you offer savings over Amazon. So that's always good. Where can people get those books,

Erik Hanberg  25:34  
I would point people to my website, which is forsmallnonprofits.com, that's f o r forsmallnonprofits.com. And what I figured out is a way to save over Amazon, which is a bundle of five of the little book, five or more of the little book of boards. And that's a way to, you know, however many of your board is, you know, get one for each of them, you'll save 30% off of the cover price on that. And if you do that, the three books that are primarily for like the executive director, I will throw those in for free. So 30% off of the board books. And then for the executive director, those three books are free. And because we're cutting out the middleman with Amazon, I'm able to do that. So it's a savings for the nonprofit, the executive director who, you know, perhaps really wants their board to read the board book, because you know, they really need some board help, but they don't want to say it. Maybe they say, Hey, this is how I could get these three books for free. So you might be able to sneak in some learning for them while you also get three free for yourself. That's my bundle. And I think it's a it's a pretty compelling offer over Amazon.

Julia Campbell  26:44  
I love that for small for small nonprofits.com. If you are in the Seattle Tacoma area, make sure you listen to K and KX public radio support public radio really important. I totally believe in it. And I support my local station here in Boston. So if you are in the area, make sure you take a listen. Go check out Eric's books. And Eric, thanks so much for being here today and sharing your wealth of expertise.

Erik Hanberg  27:12  
Thank you for having me. It was such a great conversation.

Julia Campbell  27:21  
Well, hey there, I wanted to say thank you for tuning into my show, and for listening all the way to the end. If you really enjoyed today's conversation, make sure to subscribe to the show and your favorite podcast app, and you'll get new episodes downloaded as soon as they come out. I would love if you left me a rating or review because this tells other people that my podcast is worth listening to. And then me and my guests can reach even more earbuds and create even more impact. So that's pretty much it. I'll be back soon with a brand new episode. But until then, you can find me on Instagram at Julia Campbell seven seven. Keep changing the world. Nonprofit unicorn

Transcribed by https://otter.ai