Why does it cost nonprofits $20 to raise $100, when it only costs companies $4?

The answer is that we may be raising money from the wrong people.  Most nonprofits today are focused on ”psychic” donors – those who have no direct stake in our work and derive no direct benefits, other than the “warm glow” of philanthropy.  The problem is that we have no leverage.  As a result, it is very hard to raise money.  If donors feel like supporting us, they will.  If they don’t, they won’t.  For nonprofits, it’s a tough way to live…

But today, we have a choice.  We live in a new economic era - an era where consumers, businesses, investors, employees and service providers attach real economic value to social outcomes.  An era where yesterday’s “feel good” issues – education, the environment, healthcare, global development, even the arts and animal rights  – now have direct economic consequences and opportunities. We now have leverage.  To use this leverage, nonprofits must learn how to “sell” their impact to a new set of stakeholders.  

The End of Fundraising is now available at Amazon.com.