Whether a 501(c)(4) social welfare organization is set up to pursue a narrow purpose, like advocating for a particular piece of legislation, or has broad goals, it typically will need to raise funds to support its work. For every nonprofit, having a well-defined approach to communicating with donors is essential for the organization’s credibility and long-term fundraising success. There are several important ways a social welfare organization can manage its donor’s expectations:
- Clearly and carefully describe how donations will be used. A social welfare organization doesn’t necessarily need to provide donors with a line-by-line accounting of how their dollars are spent, although major donors may insist on that. Smaller donors often still like to know that their funds will be put toward specific things, like operating expenses or lobbying costs. At the same time, when making promises about how money will be spent it’s important to not tie the organization’s hands with plans that are too narrowly described.
- Plan for gift restrictions. A nonprofit that solicits donations needs to be prepared for donors to wish to place restrictions on how their gifts are used. People who are fundraising should not be asked to improvise when it comes to restrictions. Instead, organizations should adopt policies that address when and how restrictions will be accepted. In some cases an organization is better off refusing a gift that comes with unmanageable strings attached.
- Have realistic descriptions of the organization’s goals. It’s important for a social welfare organization to have a clear explanation of its goals available for donors. Among other things, this means allowing for the possibility that those goals might not be achieved. An organization doesn’t necessarily need to dwell on the possibility of failure, but it shouldn’t make promises that it can’t keep. The more short-term or narrowly defined the organization’s mission is, the more important it will be to have a plan in place for what comes after the mission ends. For example, this can happen with organizations created for a particular election cycle.
Social welfare organizations should adopt fundraising policies to guide their staff on how to these and other matters. The Church Law Center of California advises secular and religious nonprofits on all matters of governance, compliance, and fundraising. We have extensive experience supporting the work of social welfare organizations in California. Call us at (949) 689-0437 or reach out to us through our contact page.