Developed by Authenticity Consulting, LLC
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 FundraisingTypical 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.
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
Major Gifts and Planning Giving
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.
-
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."
