Show Me the Money: Fundraising Capacity of Rural Nonprofits

Background: Rural nonprofits in the U.S. strive to maintain and improve quality of life in rural communities, but in many cases are lacking resources to be effective. Rural nonprofits often have larger services areas while operating with less funding. Little is known about rural nonprofit fundraising and grant writing capacity because previous research has focused on nonprofits in general or urban nonprofits. With differences in organization size, community demographics, and geographical contextual issues, rural nonprofits may need to use different strategies to achieve financial health and stability. The current study seeks to explore fundraising and grant writing capacity and effectiveness of rural nonprofits.

Methods: Out of 57,700 rural nonprofits that filed 990s in 2016, a random sample of 800 (200 from four U.S. census regions) were emailed or mailed a survey. The analytic sample included executive directors, board presidents, or fundraising staff (N = 139) who answered questions about their organizations. Ordered logit regression models were used to examine factors related to fundraising capacity of rural nonprofits across several domains, including fundraising strategies, grant writing. technology, and staff or board involvement in fundraising.

Results: The organizational size for rural nonprofits ranged from 0 to 139 staff, with a mean of 8.2 employees (Med = 3, SD = 17.5). Board sizes ranged from 0 to 45, with a mean of 10 (Med = 9, SD = 5.6). The average tenure for executive directors was 8.6 years (Med = 7, SD = 7.7). In fundraising capacity, rural nonprofits scored highest in grant writing, with 58.3% in the upper-third quartile. Increased grant writing capacity was positively associated with paying outside consultants to assist with fundraising (p < .005), while having fundraisers on staff were not. Organizations scored lowest in use of fundraising technology, with zero organizations in the upper-third quartile and 54% in the middle-third. However, organizations that embraced technology like donor tracking, prospect software, or grant subscriptions were significantly more likely to have diversified fundraising streams (p < .001). Additionally, organizations with diverse fundraising streams also had boards (p < .001) and staff (p < .005) who were significantly more involved in fundraising efforts.

Conclusions: These findings guide rural nonprofits in efforts to build internal capacity to accomplish their missions. Further, this study is valuable for funders, policymakers, and capacity builders who invest in rural nonprofits to support rural livelihood. There are several takeaways. Compared to national averages, rural nonprofits have 40% fewer board members, which could be an obstacle to fundraising. Also, rural organizations that hired external fundraising consultants had higher grant writing capacity than those who had dedicated fundraising staff. It is possible that due to limited pools of applicants, nonprofits are hiring individuals with minimal grant experience, which may lead to fewer awards. Finally, rural nonprofits are effective at applying for grants, but diversified revenue streams could help mitigate financial stress during economic downturns by creating more financial stability. Our research suggests that embracing technology and involving boards and staff in fundraising could help diversify strategies and strengthen stability.