How to raise money for a nonprofit • Types of donations

One of the biggest concerns for many organizations is their fundings since it is the primary support to stay active over time. But something even more delicate is determining how to raise money for a non-profit organization.

However, the first thing we need to be clear about is that it is not impossible; there are thousands of organizations of this type worldwide. There are so many forms of financing that sometimes it can be confusing to find the most effective.

So, to help you choose, here, we will summarize the primary sources to collect funds and how you can make them possible in your team.

Types of donations

In 2013, American Charities raised $ 335.17 billion at the end of the year using different methods such as direct mail or payment counters.

This is a non-profit organization with 40 years of operation since its foundation in 1980, whose purpose is to provide income to other non-profits through donations.

This shows that there are many forms of financing to raise funds. Some of the most used are:

Individual Donations

According to The Balance, 68 percent of the money for non-profit organizations comes from individual donations.

The Balance article: How Nonprofits Generate Revenue Streams

These are a beneficial source of funding, specifically for organizations with substantial marketing budgets and causes that are attractive to the public, such as breast cancer or homeless children.

We can also classify another kind of individual donations:

According to the frequency

  • Non-recurring donors: These are those who donate very infrequently, but their contributions tend to be significant. Securing these types of donors is vital for a non-profit organization, and you should continuously share with them information about the company.
    Keeping them aware of what you are doing is the key to make them interested in becoming recurrent.
  • Recurring donors: People used to donate frequently, but their donations are not very significant.
    This type of donor also turns out to be very important since, due to their contributions, it is possible to estimate an average weekly, monthly, and annual income.
    It will allow the company to plan the budget for its activities and events.

According to the platform

Online fundraising

  • Crowdfunding: It works very well for particular campaigns by telling a specific and usually sensitive story. There are many reliable platforms to try this, like gofundme.com.

Also, we recommend to develop the campaign along with a social media plan, since it is the most popular and easy way to share it.

Gofundme website

  • Website: On the other hand, if you want to raise money for a non-profit and not just for a specific campaign, a website is a better option.

The design must be simple and easy to use for the donor. You can hire a graphic designer or a programmer to make it, but there are also many options to do it on your own. Either way, click here to find some tips to create a donation web page.

Offline fundraising

  • Events: These are useful fundraising sources; they provide a space in which the donor and non-profit organizations can interact. People are commonly more likely to donate if they know who works for the organization.
  • Direct mail: Although it is a bit archaic, this is widely used by non-profit organizations due to its low investment cost. Small or local organizations generally use it.
  • Telephone calls: This technique goes directly to the donor to ask for donations and inform the different activities of the organization.
    It is basically telemarketing. However, this technique has decreased over the years as online fundraising grows.
  • Door-to-door: This technique is currently the least used. However, it is useful within growing local or political organizations.

Grants

Any well-constituted non-profit can apply for grants to their local, state, and federal government, as well as public and private foundations.

Generally, the organization does not have to reimburse the money received through a grant.

These grants serve to promote big projects or activities with a large-scale of social impact, that would not be able to materialize without help.

It is also important to mention that this benefit has numerous attached conditions, such as: giving specific reports about your activities, explain how you are going to use the money, and estimated projections.

Corporate Sponsorships

Corporations are usually interested in partnering in philanthropic projects that make their brand look as a socially responsible organization. For this reason, they have donation programs that can be of great way to raise money for a non-profit.

For political reasons, there may be some resistance in relating or associating with different corporations; these donations will be positive for the non-profit as long as the donor has objectives that do not contradict its mission and values.

Donors demand clear and transparent information as well as attractive and impactful track records. This kind of donation is classified in three ways:

  1. Philanthropic: a contribution without any commitment.
  2. Sponsorship of activities: donations based on events.
  3. Marketing: a long-term commitment to the corporation through advertising.

➡ ALSO, if you want to create a non-profit, read: How to start a 501c3 and Types of Organizations.

Conclusion

Money is probably the most frequent topic in any conversation, either for individuals or corporations. Non-profits are not an exemption to this rule, since this is what helps them sustain itself and function properly.

In conclusion, there are many opinions regarding a perfect financing model for a non-profit organization. Still, any organization must internalize that there is not a single way to obtain resources. It is positive to try multiple things until you find an adequate income that allows you to fulfill the objectives.

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