How can small to mid-sized nonprofits compete with larger ones for donations?

Every nonprofit works diligently to generate support and donations from the public, but small and mid-sized nonprofits face an additional challenge. Not only must they convince the public that their cause is worthy, they also have to compete with larger, better-known organizations for funds.

What many smaller nonprofits don’t realize, though, is that their size gives them a key competitive advantage. With much less overhead and more personal supporter relationships, they have the potential to deliver a superior donor experience.

Here, we’ll look at the unique advantages that can help small to mid-sized organizations succeed:

Restricted funds

There are a lot of pros and cons to restricted funds, where contributors specify the exact project or area their gift supports. We do know that donors typically love them, while a lot of nonprofits (especially the larger ones) don’t.

Bigger nonprofits often find restricted funds challenging to execute and detrimental to their operations. With significant amounts of overhead, it can be very difficult to track the flow of individual funds. For them, it is simpler to keep contributions general, and then to provide an overall breakdown of where they go.

This creates an opportunity for smaller nonprofits to step in and offer restricted fund options. With less overhead, administration and general expenses, it is easier to track specific funds and their directions. By promoting the opportunity to impact the exact area they wish, these nonprofits can also win over some donors that would otherwise choose to give to larger organizations.

For a smooth process, make sure that your donor management system enables simple management of restricted (and unrestricted) funds.

Tangible results

Because they can track restricted funds and the work that arises after a campaign, small to mid-sized nonprofits gain another advantage. They can showcase the tangible results that donors achieve with each gift.

It’s widely known that potential impact is one of the top priorities for most donors. Smaller organizations can demonstrate this to supporters much easier than larger ones can. Not only will this help secure initial donations, but it can help retain donors and convert them to recurring support.

For example, small to mid-sized nonprofits can give stories of specific individuals that have been helped by the funds given by a set of donors. This helps supporters feel proud, appreciated, and engaged with ongoing work.

Progress updates

Small to mid-sized nonprofits, by nature, take on fewer projects than larger ones. The increased simplicity creates one more advantage: it is easier to share updates on the initiatives donors support.

This can be effective for stewarding both previous donors and those who haven’t given before. When a project is underway, the organization can share progress with those who have contributed. Not only will this please the donor, but it also gives a chance to ask for one more donation to help finish the work.

For those who have not yet given, seeing the results in progress can help convince them to do so. Seeing these updates can help make a project more realistic and tangible, and sway some potential donors who had initially had concerns.

While this could be too difficult for larger organizations, small to mid-sized nonprofits, should find it very manageable to offer timely updates for each of their projects.


Download our free guide to Major Gift Fundraising how to track, manage, and grow impactful contributions to your cause.