Fundraising
Fundraising or fund-raising is the process of seeking and gathering voluntary financial contributions by engaging individuals, businesses, charitable foundations, or governmental agencies. Although fundraising typically refers to efforts to gather money for non-profit organizations, it is sometimes used to refer to the identification and solicitation of investors or other sources of capital for-profit enterprises.
Traditionally, fundraising has consisted mostly of asking for donations through face-to-face fundraising, such as door-knocking. In recent years, though, new forms such as online fundraising or grassroots fundraising have emerged.
Organizations
Fundraising is a significant way that non-profit organizations may obtain the money for their operations. These operations can involve a very broad array of concerns such as religious or philanthropic groups such as research organizations, public broadcasters, political campaigns and environmental issues.Some examples of charitable organizations include student scholarship merit awards for athletic or academic achievements, humanitarian and ecological concerns, disaster relief, human rights, research, and other social issues.
Some of the most substantial fundraising efforts in the United States are conducted by colleges and universities. Commonly the fundraising, or "development" / "advancement", program, makes a distinction between annual fund appeals and major campaigns. Most institutions use professional development officers to conduct superior fundraising appeals for both the entire institution or individual colleges and departments. The number of people involved, often having socialized at such "fund-raisings", will vary widely depending on the size of the institution they sponsor.
Equally important are fundraising efforts by virtually all recognized religious groups throughout the world. These efforts are organized on a local, national, and global level. Sometimes, such funds will go exclusively toward assisting the basic needs of others, while money may at other times be used only for evangelism or proselytism. Usually, religious organizations mix the two, which can sometimes cause tension.
Fundraising also plays a major role in political campaigns. This fact, despite numerous campaign finance reform laws, continues to be a highly controversial topic in American politics. Political action committees are the best-known organizations that back candidates and political parties, though others such as 527 groups also have an impact. Some advocacy organizations conduct fundraising for-or-against policy issues in an attempt to influence legislation.
While public broadcasters are completely government-funded in much of the world, there are many countries where some funds must come from donations from the public. In the United States less than 15% of local public broadcasting stations' funding comes from the federal government. Pledge drives, a type of annual giving, commonly occur about three times each year, usually lasting one to two weeks each time. Viewership and listenership often decline significantly during funding periods, so special programming may be aired in order to keep regular viewers and listeners interested.
Direct marketing in fundraising
The techniques of direct marketing have been adapted in the nonprofit sector. The alignment of direct marketing approaches with fundraising is believed to have facilitated its adoption by associations in the mid-1970s. The results obtained through the intensive use of direct marketing techniques triggered increasing interest from associations. While only a few dozen were using major direct marketing channels in 1975, several hundred commonly utilize them today.In the case of associations, direct marketing enhances the anonymity and intimacy of donations, but it can also serve as a tool for developing visibility and image.
Automatic withdrawals and street fundraising
Many associations have transformed their one-time fundraising into automatic withdrawal collections following the example of Doctors Without Borders. This progression is similar to that resulting from another form of fundraising introduced in France in the early 21st century, "street fundraising".Street fundraising involves recruiting new donors in public places, approaching them to introduce the association and propose support for its actions through assured automatic withdrawal donations. Unlike traditional fundraising, it does not collect cash or checks. It usually involves promises of donations. Street fundraising aims to establish a dialogue, create a connection with donors, often younger, engaged, and loyal.
Individual donors
The donor base for higher education includes alumni, parents, friends, private foundations, and corporations. Gifts of appreciated property are important components of such efforts because the tax advantage they confer on the donor encourages larger gifts. The process of soliciting appreciated assets is called planned giving. Charitable giving by individuals in the U.S. was estimated to be $286.65 billion in 2017.The established development programs at institutions of higher learning include prospect identification, prospect research and verification of the prospect's viability, cultivation, solicitation, and finally stewardship, the latter being the process of keeping donors informed about how past support has been used. When goods or professional services are donated to an organization rather than cash, this is called an in-kind gift.
A number of charities and non-profit organizations are increasingly using the internet as a means to raise funds; this practice is referred to as online fundraising. In addition, crowdfunding has begun to be used as a method to engage small-donation donors for small, specific opportunities.
Comparing traditional and online fundraising, 55% of donors worldwide prefer to give online with a credit or debit card, while 12% prefer to give by bank/wire transfer, and only 8% choose to donate in cash. 51% of donors are enrolled in a recurring giving program with 87% of recurring donors opting to give monthly. Worldwide, 45% of donors donate to crowdfunding campaigns that benefit NPOs, 13% create online peer-to-peer fundraising campaigns to benefit NPOs, and 60% have donated to an NPO in response to the COVID-19 pandemic.
Grants from agencies, foundations or corporations
Non-profit organizations also raise funds through competing for grant funding. Grants are offered by governmental units and private foundations/charitable trusts to non-profit organizations for the benefit of all parties to the transaction. Charitable giving by foundations in the U.S. was estimated to be $66.90 billion in 2017.Charitable giving by corporations in the U.S. was estimated to be $20.77 billion in 2017. This consists of corporate grants as well as matching gift and volunteer grants. 65% of Fortune 500 companies offer employee matching gift programs and 40% offer volunteer grant programs. These are charitable giving programs set up by corporations in which the company matches donations made by employees to eligible nonprofit organizations or provides grants to eligible nonprofit organizations as a way to recognize and promote employee volunteerism.
Bequests
A bequest is a gift that is written into a donor's will that is fulfilled after their death. These gifts can be written in the will itself or added as a codicil after the main will has been ratified. These gifts are separated from individual giving by Giving USA to illustrate the importance of Planned Giving, which is a type of fundraising that focuses on asking donors to include charitable gifts in their estate plans.Sales and services
While fundraising often involves the donation of money as an outright gift, money may also be generated by selling a product of some kind, also known as product fundraising. Girl Scouts of the USA are well known for selling cookies in order to generate funds. It is also common to see on-line impulse sales links to be accompanied by statements that a proportion of proceeds will be directed to a particular charitable foundation. Tax law may require differentiating between the cost of an item versus its gift value, such as a $100.00 per person dinner, for a $25.00 cost meal. Fundraising often involves recognition to the donor, such as naming rights or adding donors to an honor roll or other general recognition. Charity Ad Books are another form of donation for recognition, sponsorship or selling of ads often in an event related program or group directory.Purposes
Fund raising is typically undertaken for one of two broad objectives: Opex or Capex. Opex includes salary, overheads such as electricity, rent and transport, whereas Capex includes expenses such as infrastructure, equipment or supplies. Therefore, organizations raise funds to support capital projects, endowments, or operating expenses of current programs.Capital fundraising is when fundraising is undertaken to raise major sums for a building or endowment; generally such funds are kept separate from operating funds. This is often done over a period of time to encourage donors to give more than they would normally give and tap donors, especially corporations and foundations who would not otherwise give. A capital campaign normally begins with a private phase before launching a public appeal.
Many non-profit organizations solicit funds for a financial endowment, which is a sum of money that is invested to generate an annual return. Although endowments may be created when a sizable gift is received from an individual or family, often as directed in a will upon the death of a family member, they are more typically the result of many gifts over time from a variety of sources.
Fundraising methods
Fundraising events
A fundraising event is an event or campaign whose primary purpose is to raise money for a cause, charity or non-profit organization. Fundraisers often benefit charitable, non-profit, religious, or non-governmental organizations, though there are also fundraisers that benefit for-profit companies and individuals.Special events are another method of raising funds. These range from formal dinners to benefit concerts to walkathons. Events are used to increase visibility and support for an organization as well as raising funds. Events can feature activities for the group such as speakers, a dance, an outing or entertainment, to encourage group participation and giving. Events can also include fundraising methods such as a raffle or charity auction. Events often feature notable sponsors or honoree. Events often feature a charity "ad book" as a program guide for the event. This can also be another fundraiser providing members, supporters and vendors an opportunity to show their support of the group at the event by way of placing an ad-like page. Events and their associated fundraisers can be a major source of a group's revenue, visibility and donor relations.
One specific type of event is the "ad book" fundraiser, where those who wish to give funds to a fundraising group do so through the sponsorship or statement within a book of advertisements.
Online fundraising pages have become very popular for people taking part in activities such as charities and crowdfunding. Those pages facilitate online payments in support of the charity.
Popular charity fundraisers in major American cities include lavish black-tie gala benefit dinners that honor celebrities, philanthropists, and business leaders who help to fundraise for the event's goals through solicitations of their social and business connections.