This blog describes the most significant means of fundraising written in a plain language

What is the Difference Between Fundraising and Donations?

What is the Difference Between Fundraising and Donations_

The words “fundraising” and “donation” have become firmly established in our lexicon. They can be heard not only in the professional communication environment – among non-state non-profit organizations (the so-called NGOs). These words can be heard on radio and television, are regularly found on the pages of print and Internet publications. Since donating and fundraising are actively developing in the world, so it makes sense to “deal” with the terminological confusion.

Fundraising vs. Donations: What’s the Difference?

Donating (charity) is an activity through which private resources are voluntarily distributed by their owners in order to help people in need (in the broad sense of the word) to solve social problems and improve social conditions. Donators usually have significant financial resources, for example, Bill Gates donated more than 40 billion dollars to the management of the charitable foundation.

The question of selflessness in charity still remains open. “Pride and vanity built more hospitals than all the virtues combined,” wrote B. Mandeville. The world knows the names of famous philanthropists, donators and sponsors, and this certainly brings them additional economic benefits.

The development of charity throughout the world is closely related to the activities of national and international charitable organizations whose main task is to provide grants, which are usually understood as the targeted provision of financial or material resources to a legal or natural person for the further implementation of an unprofitable socially significant project. Organizations that provide grants are commonly called donors. The financial source of such structures can be: a commercial structure (IBM Foundation), a state (USAID), a natural person (Soros Foundation), often the assets of such funds are formed as a result of funds that are transferred or bequeathed by wealthy people to charitable organizations – (CSMott Foundation).

Of course, business plays a major role in charitable activities. The term “corporate philanthropy or charity” is widely known, but lately, it has increasingly been included in a broader and more capacious concept called “corporate social responsibility” or, alternatively, “social responsibility of business”.

The state, which regulates the legislative base, has a direct relationship to the development of charity, thereby creating favorable or unfavorable conditions for the development of certain public relations, including charity. In addition, the authorities have the resources that are directed to the solution of certain social problems. What is the difference between charity and state social programs? The difference between state aid and philanthropic aid is ethical in nature: philanthropy is voluntary – state aid is obligatory.

Charity (donating) should be viewed as voluntary and disinterested (with some reservations) aimed at helping those who need it, and, as a result, achieving positive social changes. Virtually all social strata and groups are involved in this activity in one way or another: individuals, authorities, business, public education. Some provide charitable assistance, others receive it.

All of the above allows us to proceed to the definition of the term “fundraising”. Fundraising is essentially a mirror reflection of charity in the sense that charity is an action aimed at helping those who need it, and, as a result, achieving positive social change, and fundraising is an action aimed at attracting resources to further assist those in need and achieve positive societal changes.

Fundraising can be directed to attracting resources to provide charitable assistance to a specific group of people, as well as to an individual. As a rule, this person should be widely known to the public, for example, an outstanding actor or athlete. In this case, the collection of donations is not only individual value (assistance to a specific person), but also public since his fate is not indifferent to a significant number of other people. Thus, just like charity, fundraising cannot be aimed at improving the position of the person who is directly asking for help, as well as of people close to him. How to evaluate the situation when parents collect money for an operation which their sick child needs? Such activity should not be considered as fundraising; it can be interpreted as an individual appeal for charitable assistance. As a rule, these actions are performed by those close to those who are in dire straits. Assistance is individual in nature with no significant social effect (the circle of immediate beneficiaries is limited to relatives and friends).

Fundraising is not only attraction but, to a greater degree, pooling the resources of several (at least two) parties – the one who attracts the resources and the one who provides the resources. The fundraising organization attracts external resources from donors, sponsors, etc. At the same time, it invests its internal resources. This process is called domestic resource mobilization.

Based on the above, we conclude that fundraising is the voluntary mobilization of internal and attraction of external resources for selfless assistance to those who need it, and the achievement of positive social changes.”

Category: General Issues

Tags: funding issue, fundraising