More often than not Nonprofits devote maximum energy and resources to raising funds. Very few of them are able to achieve their funding targets. Creating a base of loyal and engaged donors is crucial for achievement of their development goals and thus fundraising is a topic of immense interest for nonprofits.
Nonprofits continuously look for innovative ways and means of raising funds. While crowdfunding is the first thing that comes to your mind when you think of raising funds, you would be surprised to know that there is more than one way of doing this. Plus they can be highly effective depending on how you put them to use.
In the previous article on fundraising, we talked about crowdfunding and its types. In this article, let us look at some more avenues of raising funds.
I. Through Individual Philanthropists
Philanthropic funding from private individuals recorded a sixfold increase in recent years: approximately INR 36,000 crore in 2016, up from approximately INR 6,000 crore in 2011. The number of people who have volunteered their time and money between 2009 and 2015 has also increased, up 2 times and 1.5 times, respectively. (Source: Bain Philanthropy Report 2017)
Individual donations are the most cost-effective way of raising funds. Pro tip: A simple, well-planned email campaign and an attractive webpage can go a long way in attracting donors. But the flip side here is, you don’t know whether they will come back and donate again. One-off donations will certainly cover your immediate expenses but they don’t come handy in planning long-term goals.
Having monthly donors on your patron list will help you plan various programs and development activities for your nonprofit well in advance. Take for example Greenpeace or GiveIndia. They urge their donors to set aside a small monthly or quarterly amount that guarantees a fixed and predictable stream of funds .However this activity needs a dedicated donor acquisition team separate from the operations team to administer, manage and nurture your donors.
II. Through Events
Events are a great way of intimately engaging with your donors. Through events, donors get to be a part of your organisation, interact with your staff and members of your target communities.
There are different types of events which you can engage in to promote your cause and your community.
- Runs and walks where participants pay a certain set amount to enter but also are encouraged to obtain other donations from friends, family, and colleagues. Eg: Pinkathon, The 10k Swacch Bharat Run by Lets Feed India
- Dinners that might include a speaker, live and silent auctions, and other ways to earn money from the event.
- Corporate actives like the Joy of Giving Week that has corporate donors come together and raise money for NGOs in the city.
While events are highly effective, the sheer effort required to set up and manage an event demands a dedicated team of people to monitor it, promote it and indulge in post event campaigns.
III. Through Earned Income
Nonprofits and NGOs are often involved in small scale, cottage industries that provide a means of livelihood to the community that they are working for. Partner with organizers of events that focus on creating an impact by selling products made by indigenous artisans. Mitti, an event in Navi Mumbai, promotes indigenous artisans by displaying and selling their art and crafts. Rangsutra, an apparel brand, is a community owned business of 3000 artisans of which 2,200 are direct shareholders in the company.
This can prove to be an effective way of raising sufficient funds if you are able to make enough sales. Events are one-off and you will have to establish a distribution channel to create a market demand for your products. This will require a sales strategy and a sales team. Tying up with retail stores or e-commerce platforms is crucial to generate revenue and brand recognition.
IV. Through Annual Appeal
Annual appeal is the donation given without any restriction on what it is used for. This type of fundraising generally takes place at the end of the financial year where nonprofits appeal to their donors by sharing their asset development plans for the next year. These funds are utilised for bigger projects like building a library for children, building water tanks in rural areas or starting a new ward for children in a rural hospital.
Thinksharp Foundation, opted for this method of fundraising to build study malls in rural areas.
In this, you can only appeal to your stakeholders to make a donation, but it cannot be a dependable option to raise funds. You may use this method in addition to your major fundraising activities, to raise a part of funds that the other sources couldn’t raise.
Fundraising is an important aspect of every nonprofit, but it is necessary to understand your strengths and limitations before you plan your mode of raising funds. While individual donations cannot be ruled out completely, having a steady group of regular and supportive donors always goes a long way in sustaining your cause.
Cover Image: The Ice Bucket Challenge, sometimes called the ALS Ice Bucket Challenge, is an activity involving the dumping of a bucket of ice and water over a person’s head, either by another person or self-administered, to promote awareness of the disease amyotrophic lateral sclerosis (ALS, also known as motor neurone disease and in the US as Lou Gehrig‘s disease) and encourage donations to research.