Why donors are better than grants

Tom Iselin
May 30, 2021
4 min read

Updated: 2 days ago

This blog and is a reminder that grants and galas are effective but donors provide much more long-term value.

https://youtu.be/yOsLRU6TxSQ

Why donors are better than grants

Why You Should Care About Adding More Donors (It’s Not Just About Money)

If your nonprofit raises money from donors, it seems obvious that you’d want more of them. More donors = more revenue… right? Sure. But the real value of donors goes far deeper than dollars, and understanding this is a game-changer for any organization that wants to grow, scale, and create meaningful impact.

Let’s unpack why adding donors — from the $25 givers to the $25,000 givers — is one of the smartest long-term strategies your nonprofit can pursue.

Why Grants Aren’t Enough

Grants can be great. They can also be a massive pain. You already know the drill:

Most grants last only 1–2 years
They take a huge amount of time to write, track, and manage
You can pour weeks into a grant only for it to be rejected
They almost never come with long-term loyalty

Grants provide money, but they don’t provide connection.

You spend hours giving the granting agency everything they require — metrics, reports, evidence, narratives — and after that year?You’re back in line with thousands of other nonprofits asking for money again.

That’s the weakness of a grant-heavy funding model:It’s transactional, not relational.

Donors Give More Than Money

This is where donors shine. Donors — real, engaged, passionate donors — offer far more than financial contributions. They can:

Volunteer
Share expertise
Provide professional skills
Connect you to community leaders
Introduce you to new prospects
Serve as enthusiastic ambassadors for your mission
Spark passion in others just by talking about your work

A grant will never drop by your office to help.A donor will.A grant will never introduce you to the owner of a major local company.A donor will.A grant will never cheer on your mission at a dinner party.A donor will.

And best of all:

Donors stay with you for years — sometimes decades.

Some donors will:

Give for 10–20+ years
Become monthly givers
Increase their gifts over time
Include your nonprofit in their estate plans
Provide support long after staff or board members retire

You can’t get that from a foundation check.

Why More Donors Equals More Strength

When you retain donors — and add new ones — you’re doing more than increasing your revenue. You’re building a powerhouse of resources around your nonprofit.

A donor base of:

500
5,000
50,000

…means you have a growing ecosystem of people who:

Believe in what you do
Are rooting for your success
Want to help you grow
Are connected to whole networks you haven’t even tapped yet

It’s leverage. It’s stability. It’s community.

This is one of the most important insights Tommy learned while building his first nonprofit — and it became a core principle that helped build multiple high-performance organizations over the years.

The Real Goal: Add and Retain Donors of All Sizes

If your goals include:

Raising more money
Creating deeper impact
Building a more stable organization
Growing your community reach
Strengthening your funding foundation
Increasing your program capacity

…then your donor strategy must include:

Adding more donors
Keeping more donors
Treating donors like partners
Providing exceptional customer service
Showing impact clearly and consistently

And you must do this for donors at every level — not just the big ones.

Donors give — and keep giving — because they:

Feel appreciated
Feel connected
Feel informed
Feel inspired
Feel the impact

This is donor stewardship at its core.

What It Takes to Build a High-Performance Nonprofit

High-performance nonprofits don’t rely on luck. They:

Build broad donor bases
Provide outstanding stewardship
Communicate impact clearly
Make donors feel like insiders
Engage donors beyond money
Create a culture of gratitude
Treat every donor like they matter

I

it’s a tall order. But you can do it — and the payoff is enormous.

When donors feel valued, they become:

Loyal
Generous
Emotionally invested
Mission-driven partners
Lifetime contributors
Legacy supporters

That’s what transforms your organization.

Summary: Why More Donors Matter

Here’s the simple truth:

More donors = more resources = more impact.

Not just more money — more expertise, more influence, more connections, more passion, more community.

Donors build nonprofits.Grants support work.But donors sustain it.

About the Author

Tom Iselin is recognized as one of America’s leading authorities on high-performance nonprofits. He has built nine sector-leading nonprofits and two software companies, written six books, sits on multiple boards, and has been rated one of America’s Best Board Retreat and Strategic Planning Facilitators. His work on nonprofit strategy, board leadership, and culture has been featured on CNN, Nightline, and in Newsweek.

Tom is the president of First Things First, a firm specializing in board retreats, strategic planning services, fundraising strategy, and executive coaching for nonprofit CEOs.

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