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

Fundraising: Cycle, Methods, Resources, Principles

Fundraising

Fundraising is a search and attraction of external resources: financial, legal, human, marketing for the implementation of a specific project or internal company activity. In this article, we will speak about the cycle, methods, resources, and principles of fundraising.

Fundraising resources

Fundraising is not just a collection of money. Donations also include information, facilities, time, qualified personnel, and so on. To attract funds, a non-profit organization can hold mass actions, attract volunteers, establish mutually beneficial partnerships with other organizations, collect membership fees and many others.

Sources of resources in fundraising are divided into several types. Let’s consider each of them in detail:

  • Sponsor is a legal or physical person who supports an event or organization under certain conditions, often for advertising its own name;
  • Investor is a person or organization making a contribution for profit afterward;
  • Grant-givingg organization provides grants, that is, donations to achieve a specific goal;
  • Patron is an individual who provides disinterested charitable assistance on a voluntary basis;
  • Donor is an organization that makes donations on a competitive basis

Cycle of fundraising

The full cycle of fundraising consists of the following stages:

  1. Problem analysis;
  2. The idea;
  3. Description of the target group;
  4. Defining goals and objectives;
  5. Definition of mechanisms and tools;
  6. Budgeting, analysis of available and necessary resources;
  7. Search and selection of potential donors;
  8. Holding a fundraising event, action;
  9. Analysis of the results, lessons learned;
  10. Thanks to donors.

Principles of fundraising

Of course, each organization determines the principles for building fundraising itself. But there are some principles that are particularly important for the success and effectiveness of this activity. We present the most important from our point of view.]

  • “If you don’t ask, they don’t give!” is probably the main law of fundraising. Do not think that donors will offer you help themselves. If your site does not have a big red “Help Now” button, then site visitors think that you simply do not need help;
  • Diversification of sources. This means that the more diverse your sources of funds are, the more stable will be the financing of your organization. In addition, we must not forget that money from different sources differ. For example, a large amount can be obtained from a grantmaker for a targeted project, but this process takes months and never gives a 100% guaranteed result. On the opposite, private donors rarely allow getting a large amount but this money is “fast” and often non-earmarked, which gives organizations great opportunities for their effective use according to circumstances;
  • Money to money. The simple rule: money is given not to those who do not have it, but to those who know how to handle it. If you have a lot of implemented projects behind you, then you will be more likely to get funds than to those who are just starting and have not done anything yet;
  • Gratitude. Speaking the word “thank you” takes a split second. But the significance of gratitude is hard to overestimate. After all, this is the main thing that a donor receives. Correct feedback allows you to maintain long-term relationships with donors;
  • Long term relationship. Statistics show that experienced large organizations receive more than 80% of the funds from non-first contributions. These are the second, fifth, hundredth donations of the same donors. If you rely on a long-term relationship from the very beginning, you will win;
  • Not all money is equally useful. Beginner fundraisers often cling to any possible source of help. Over time, the organization understands that not every donation actually benefits. Sometimes the time and effort spent on “servicing” a donor are enormous so it is easier to refuse donations;
  • Efficiency is extremely important! The main criteria for the effectiveness of fundraising: the ratio of the costs of fundraising activities and the result obtained, the absolute amount of money received, the quality of this money (targeted or not, one-time or regular payments, etc.). The fundraiser must constantly measure a variety of indicators in its work: response rate, average contributions, costs, etc.;
  • Presumption of NGO effectiveness. Of course, a fundraiser can influence the efficiency of its NPOs. But this is not the main thing in his work. The performance of the fundraiser will be much higher if he does not spend his strength on improving the work of the programs. It is better to assume a priori that your organization is doing an important thing, and it does it well. Indeed, it is difficult to be a good fundraiser if you do not believe sincerely in the importance of your organization;
  • Importance of investment. Practice shows: to attract money, you must spend it first. Usually, good fundraising results can only be achieved by investing in it. When calculating investments, you need to take into account many criteria. For example, it is possible to spend more money on a donor who has issued a monthly transfer from a bank account of $10 more than on a donor who has made a one-time contribution of $50. And do not forget about PR, which can also be considered as an investment in fundraising, because the more they know about you, the more likely they will help you;
  • Ethics. One way or another, each step affects the reputation of the organization. A good reputation of the organization, in turn, affects the success of fundraising. You must not only be honest but also “intelligible in connections”. Ethical codes of the fundraiser exist in every country. The first such code was developed in 2000. It was about-about the need to respect universal norms, human rights, the right of any person to charity, transparent information, transparency of financial transactions and much more;
  • Learn and change. The world does not stand still. The approach that seemed effective yesterday may no longer work tomorrow. We need to constantly develop, be the leading player on the field. There are plenty of opportunities for this: conferences, round tables, formal and informal meetings;
  • Never give up! Be prepared for the fact that many things will not work right away. If you started to engage in fundraising, then some disappointments are guaranteed. But if you can overcome them, you can succeed. We hope our website will help you with this!

Methods of getting assistance

  • Telefundraising – addressing potential donors and benefactors by phone and fax;
  • Mail fundraising – an appeal to potential donors and benefactors by mail;
  • Individual fundraising – a personal appeal to donors and benefactors in a personal conversation;
  • Solo fundraising – getting support;
  • Events fundraising – holding various events (auctions, exhibitions, lotteries, presentations, dinners, etc.)

Category: General Issues

Tags: funding issue, fundraising