Overview of Nonprofit Fundraising Sources and Approaches

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

Sections in This Topic Include the Following

Basic Guidelines for Fundraising
Typical Funding Sources and Advantages-Disadvantages of Each
Information for Smaller Nonprofits

Also see
Related Library Topics



General Guidelines for Fundraising

In addition to the guidelines included in the large amount of other fundraising information referenced from the library:
· Ensure the board is strongly involved in fundraising planning and implementation
· Develop fundraising goals to be the resources needed to reach the strategic goals identified during strategic planning
· Identify a variety of funding sources for each goal and the particular fundraising strategies preferred by each of the sources (the above-mentioned Web page provides a good overview of various strategies and where they should be used)
· Ensure your plans specify who will be doing what fundraising, so you don't have sources who become overwhelmed or irritated by repeated solicitations from different people in your organization

"The Complete Guide to Nonprofit Management" by Smith, Bucklin and Associates suggests:
· The most important aspect of fundraising is excellent public relations, that is, ensuring that your community has a strong, positive impression of your organization
· Establish an organizational structure to implement the fundraising plan, including:

    Board Executive Committee - Establishes priorities and goals and approves the plan

    Outreach/Marketing Committee - Identifies potential donors and coordinates efforts to promote fundraising

    Fundraising Committee - Leads development and implementation of the plan, and approaches donors

    Volunteer Coordinator - Coordinates volunteer efforts, including identifying where volunteers might help, recruiting volunteers, ensuring they are effective and that they are recognized

    Information processing - Assign staff to develop and maintain the fundraising database

    Accounting - Be sure to include moneys raised in your accounting system

    Donation processing - Have staff available to process donations (cashing checks, sending notes of appreciation, updating the fundraising database, etc.)

· Most fundraising is done in the fall of the year when corporations are doing their planning for the following year
· Corporations typically require a written proposal
· Foundations rarely fund operating costs, that is, costs to support central administration of an organization, rather than specific programs which directly deliver services
· Consider approaching a local advertising, marketing or public relations firm for pro bono advice. Regularly send these companies evidence of the successes of your organization to keep them up to date on your organization.
· Consider using third-class mailing, which is cheaper than first-class, but sometimes takes as much as two weeks longer to arrive. Expedite arrival of third-class mail by using bar codes and nine-digit zip codes.


Typical Funding Sources and Advantages/Disadvantages of Each
(Credit to Ellen M. Hatfield of the Twin Cities in Minnesota)

Source

Advantages

Disadvantages

Individuals · Largest source of giving
· Ongoing source one can build
· Once a giver, also an advocate
· Volunteers are a good source of money
· Costly to develop, small return per individual unit
· Hard to generate unless broad-based direct service appeal
· Risky for the inexperienced
· Need significant assistance from the organization's board and volunteers
Large-Family Foundations · Source of large sums of money
· Accessible, professional staff
· Clear guidelines, process
· Most likely to research your request
· Board volunteers can help, not always key
· Start-up funds only
· Lengthy process
· More difficult to access through personal influence
· Proposals may be more lengthy
Community Foundations · Much like large-family foundations
· Staff may be sufficient
· Host of foundations within foundations
· Most money is earmarked, special funds
Small-Family Foundations · May fund ongoing operating expenses
· Personal influence with board members helps
· Guidelines often broad
· Not very fussy about grant format
· Hard to access, no professional staff
· Often not large sums of money
· Without personal influence, may not be possible
Large Corporations / Corporate Foundations · Can be source of large sums of money
· Smaller amounts of money may be ongoing
· Often accessible, professional staff
· May be tied to volunteer involvement
· Business strategy may be clear
· Source of cause-related marketing
· Large sums of money aren't ongoing
· Hard to get around staff
· Must be within their guidelines
· Not likely to contribute if not headquartered locally or have a public consumer base
· Often want board representation
Small Corporations · Very informal approach
· Money may be ongoing
· Personal connections will suffice
· Neighborhood focus will help
· Small amounts of money
· Narrow range of interest
· Personal contacts are key
Federated Funds (United Ways, United Arts, Combined Health Appeal) · Steady source of relatively large sums of money
· Clear process
· Professional staff, can be agency staff driven
· Generally can't be a start-up organization
· Must be social service and fit priority focus
· Very lengthy entry process
· Very time consuming as must be part of yearly fund raising process, with periodic in-depth review
Government · Large sums of money possible
· Process is set, clear
· Political clout helps
· May be source of ongoing money
· Application procedures may be long, tedious
· May only pay by unit of service, fluctuates
· Unspent monies may be returned
· Difficult record keeping
Churches and Organizations · Often looking for group projects · In-kind services most likely
· Need to fit their service focus, neighborhood or religious outlook


Information for Smaller Nonprofits

For smaller nonprofits (e.g., with budgets under $100,000 or so), Smith, Bucklin and Associates (in "The Complete Guide to Nonprofit Management") recommend:
· Start with internal solicitations to board members, staff and members of your organization (if you are chartered on a membership basis).
· Look to the donors who can make the largest contributions. Write them, call them and arrange a visit. Offer a co-sponsorship to events.
· Next, prepare a detailed donor list and offer them a range of options.
· Then go to the smaller donations list.

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For the Category of Fundraising (Nonprofit):

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books

Fundraising Basics, Overviews and Planning

Fundraising Proposals and Grantwriting

Fundraising Events

Major Gifts and Planning Giving

Capital Campaigns

The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just click on the image of the book. Also, a "bubble" of information might be displayed. You can click on the title of the book in that bubble to get more information, too.



Fundraising Basics, Overviews and Planning

The following books will give you a sound understanding of the most important principles and practices for successful fundraising. Books in the following sections go into more detail about the most common, major forms of fundraising. Before proceeding to those other sections, it would be wise to understand the fundamentals in fundraising as explained in the books in this section.

Nonprofit Program Design, Marketing and Evaluation - Book Cover Field Guide to Nonprofit Program Design, Marketing and Evaluation
by Carter McNamara, published by Authenticity Consulting, LLC. There are few books, if any, that explain how to carefully plan, organize and develop a nonprofit program to appeal to funders. Also, too many books completely separate the highly integrated activities of planning, marketing and evaluating programs. This book integrates all three into a comprehensive, straightforward approach that anyone can follow in order to provide high-quality programs with strong appeal to funders. Includes many online forms that can be downloaded. Many materials in this Library topic are adapted from this book.

Fundraising Proposals and Grantwriting

Grants are often viewed as the most common form of fundraising, although individual appeals (in the form of direct appeals and events) are just as -- or more common -- than grants. Before reading more about grants, be sure to understand the most important principles in fundraising as provided in the books in the above section "Fundraising Basics, Overviews and Planning."


Fundraising Events

Fundraising events are a very common form of fundraising, although they often require extensive time and effort. Before reading more about events, be sure to understand the most important principles in fundraising as provided in the books in the above section "Fundraising Basics, Overviews and Planning."


Major Gifts and Planning Giving

Pursuing major gifts and planned giving (for example, donations from major estates) can seem like an approach to get significant contributions. However, these forms of fundraising usually require significant time and effort, as well. Before reading more about major gifts and planning giving, be sure to understand the most important principles in fundraising as provided in the books in the above section "Fundraising Basics, Overviews and Planning."

Capital Campaigns

Capital campaigns are undertaken when an organization needs to raise substantial sums, usually to develop or procure a major asset, such as land or a building. Before reading more about capital campaigns, be sure to understand the most important principles in fundraising as provided in the books in the above section "Fundraising Basics, Overviews and Planning."

Also See for Nonprofits

Strategic Planning -- Recommended Books

Social Entrepreneurship (Nonprofit) -- Recommended Books

Capacity Building (Nonprofit) -- Recommended Books

Financial Management (Nonprofit) -- Recommended Books

Program Management -- Recommended Books

Planning and Project Management -- Recommended Books

Volunteers -- Recommended Books




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