Donors have immediate access to a wide array of information about your nonprofit at their fingertips, and while they may be able to begin forming a picture of your organization through your website, IRS Form 900 and any available annual reports or audited financial statements, it is likely that they will still have questions before deciding to invest their money. The way you answer these questions can make all the difference in gaining their support. First impressions matter, and it is essential that your staff — and even your board members —are well prepared to answer these commonly asked questions.
1. What does your organization do?
Why donors ask: Whether the donor is learning about your organization for the first time or they simply want to hear how you “sell” your nonprofit, it is important to have a clear and concise pitch ready at all times. The ability to effectively articulate your mission, programs and impact could make the difference between drawing a potential supporter or not.
Be prepared to answer: Create an “elevator pitch”— a two-minute description of your organization and its impact. This could include your theory of change, a short, compelling story about someone impacted, why you support the organization personally, an interesting statistic or a call to action. For example:
I am a board member for Read 4 Success. Our mission is to help children read by third grade. We donate money and books to schools and libraries across our state. Studies show that children who learn to read by third grade are more likely to graduate from high school, go to college and stay out of the justice system. Unfortunately, 58% of third grade students in our state cannot read at grade level. As a child, my librarian taught me to read. Storytime at the library sparked a lifelong love of reading. That’s why I support this wonderful organization – to help children learn to love reading.
Every board and staff member should have their own version of this pitch that they are able to share as part of your organization’s culture of philanthropy.
2. What makes your organization different?
Why donors ask: Donors are frequently asked for money. Before they give, they want to understand what sets your organization apart from the other 1.9 million nonprofits in the United States and gain assurance that by choosing your organization, their money will be used effectively.1
Be prepared to answer: Distinguish your nonprofit from similar groups. Highlighting how you differ programmatically, culturally, operationally and philosophically are just a few ways in which you can differentiate your organization. Strong illustrations can make the difference in funding.
3. What will you do with my money?
Why donors ask: For many donors, your answer could determine whether or not they decide to make a gift. While some donors are comfortable with an organization directing their donation to where the need is greatest, many, understandably, want to know exactly what they are supporting.
Be prepared to answer: Often donors want assurance their donation will not be spent on overhead. However, to efficiently run their programs, nonprofits, just as any other business, require funding for operational costs such as wages, materials, space and insurance. Spend time crafting your answer to effectively explain the importance of attracting and retaining qualified staff, how inflation has increased your expenses, how your rent has increased and you need the space to hold programs, and how you need to build a reserve fund to cover emergency repairs on your building or start an endowment. While not all donors will be receptive to funding these expenses, many will understand this when framed from a business perspective.
4. How do you measure and communicate impact?
Why donors ask: Access to meaningful impact data allows the donor to be a part of the narrative that is created by their donation and see the value in giving additional gifts. Donors want specific examples of how their contributions advance your mission, such as allowing for expansion or execution of a program or the ability to hire and retain staff.
Be prepared to answer: Providing transparent reporting to donors can go a long way in increasing their confidence in your organization and building a strong relationship. Data should play an integral role in your decision-making, strategic planning and donor acquisition practices. Impact data will look different for every nonprofit, but it is important to have processes and a strategy in place for collecting and presenting the information. Be proactive by asking your donor their communication preferences. Would they prefer a letter in the mail, an email or an invitation to tour the building? How often would they like to hear from you?
5. Is the organization structured for long-term success?
Why donors ask: Donors want to contribute to an organization that is well managed, sustainable and trustworthy. In pursuit of that, they may want to know more about your board and staff leadership, including how decisions are made, what oversight exists and what relevant experience board members possess. In addition, donors want to be assured there is a clear business model and strong financials. They may want to know whether you are regularly audited, what the future strategic plan looks like and what the composition of the overall capital structure is, for example, does your organization have a reserve fund and/or an endowment? These can be indicators of longterm financial stability.
Be prepared to answer: Make it clear who is responsible for financial decisions, who safeguards assets and who maintains oversight. Since the ability to articulate sustainability and growth is crucial, consider including key financial data points or ratios in your pitch. For example, knowing your program expense ratio, current ratio and cash reserve ratio could help convince a prospective donor that your organization has a good understanding of your financial position and thus are strong stewards. Share any appropriate financial or operational documents such as your strategic plan, annual report, IRS Form 990 or audited financial statements. Use your already completed Schedule O from your Form 990 to provide supplemental information that adds context and clarifies any numbers that may be confusing for a donor.
6. How do you protect donors’ classified information?
Why donors ask: Payment, distribution and transfer fraud attempts are widespread across all industry types because of email compromises and malware infections. Understanding how these fraud schemes are designed to compromise your organization and how to prevent them are critical. Because nonprofits hold a significant amount of data about their donors, including important financial information, they can be a prime target for hackers. Furthermore, many nonprofit organizations are soft targets, given budget limitations around areas like network security and technology.
Be prepared to answer: Explain what processes you have in place to protect donor information. Familiarize yourself with the 5 Es of Cybersecurity and be ready to communicate your plan to prospective and current donors. Following best practices for cybersecurity and data storage can help minimize the risks of a breach.
1. Establish well-defined, repeatable procedures to develop controls and mitigate risks. Simple practices, such as utilizing two-factor authentication on your social media or banking accounts, is one of several ways to enhance your organization’s cybersecurity posture.
2. Enforce procedures. Cybersecurity measures should be included in the onboarding of all roles at all levels of your organization, supplemented by regular training and communications.
3. Educate employees on current and emerging threats and how to spot red flags.
4. Empower your team to report suspicious activity. Have processes in place so that staff know who to reach out to when they have concerns.
5. Evolve and enhance your procedures as security and risks change.
Nonprofit Strategy & Solutions Group
PNC’s Nonprofit Strategy & Solutions Group serves as a dedicated partner committed to empowering nonprofit organizations to achieve their missions. By combining national expertise with local knowledge, we provide comprehensive education and advice on governance, philanthropy and financial sustainability — going beyond asset management to deliver actionable insights that address the most pressing challenges nonprofits face. With our deep community ties, practical nonprofit leadership experience and strong local market presence, we provide meaningful solutions that optimize resources and deliver a sustainable impact.
For more information, contact the team at IAMNonprofitStrategy@pnc.com.
Source
1. As of March 10, 2025, http://www.irs.gov/charities-non-profits/exempt-organizations-business-master-file-extract-eo-bmf
