The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. (May 2014) (Learn how and when to remove this template message)
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 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 reformed version of grassroots fundraising have emerged.
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 achievement, 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 (e.g. School of Art, School of Math, School of Science, etc... as well as campus institutions like athleticsand libraries. ). 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 (PACs) 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.
According to Giving USA 2019, a study of charitable giving in the United States, the sources of funds donated to charities are as follows:
|Rank||Source||Total Giving||% of Total Giving|
*NOTE - This chart does not include government grants, which are technically contracts to perform a service, not a charitable gift.
Fundraising is just one of several revenue sources for a nonprofit organization. Additional revenue can come in the form of grants from government agencies, endowments, and sales and services. Income from endowment is not strictly fundraising but rather the fruits of the investment of previous fundraising.
The donor base (often called a "donor file" or simply "constituents") 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.Stock giving is the fastest growing form of donations. It was up 62% year over year to $21.07 billion, compared to the 1.5% for all of charity fundraising activities.
The classic development program 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.
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.
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 (addendum) 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.
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.
Organizations raise funds to support capital projects, endowments, or operating expenses of current programs.
Capital fundraising is when fundraising is conducted to raise major sums for a building or endowment, and generally keep such funds separate from operating funds. This is often done over a period of time (in a capital campaign) 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 more typically are the result of many gifts over time from a variety of sources.
A fundraising event (also called a fundraiser) 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, but more importantly, as another fundraiser providing members, supporters and vendors to show their support of and to the group at the event by way of placing an ad-like page, 1/2 page, 1/4 page, stating or showing support. 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 a charity. 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.
Often called donor cultivation, relationship building is the foundation on which most fundraising takes place.Most fundraising development strategies divide donors into a series of categories based on the amount and frequency of donations. For instance, annual giving and recurring gifts represent the base of a fundraising pyramid. This would be followed by mid-level gifts, planned gifts, major gifts, and principal gifts.
More sophisticated strategies use tools to overlay demographic and other market segmentation data against their database of donors in order to more precisely customize communication and more effectively target resources.Research by Peter Maple in the UK shows that charities generally underinvest in good marketing research spending around a quarter of what an equivalent sized for profit company might spend.
Donor relations and stewardshipprofessionals support fundraisers by recognizing and thanking donors, and demonstrating the impact of their donations in a fashion that will cultivate future giving to nonprofit organizations.
Recent research by Adrian Sargeant and the Association of Fundraising Professionals' Fundraising Effectiveness Project suggests the sector has a long way to go in improving the quality of donor relations. The sector generally loses 50–60% of its newly acquired donors between their first and second donations and one in three, year on year thereafter. The economics of regular or sustained giving are rather different, but even then organizations routinely lose 30% of their donors from one year to the next.
A capital campaign is "an intensive fundraising effort designed to raise a specified sum of money within a defined time period to meet the varied asset-building needs of an organization". Asset-building activities include the construction, renovation or expansion of facilities (for example, a new building), the acquisition or improvement of land, equipment, or other items, and additions to a financial endowment. Two characteristics set capital campaigns apart from other forms of fundraising activities. First, "the gifts solicited are much larger than those generally sought during an annual fund". Second, "pledges are emphasized as commitments payable over a number of years convenient to the donor or through the transfer of appreciated real or personal property".
Various types of capital campaigns have been identified. The traditional "brick and mortar" campaign, focused on building construction or improvements, was considered a "once in a lifetime" campaign in the past because of the ambitious goals of the campaign. Today, however, organizations frequently schedule capital campaigns every five to ten years, and "the megagoals announced by large institutions often are the result of 'counting everything' during a five-to seven-year campaign period".
A second type of campaign is the comprehensive, integrated, or total development campaign, which aims for a longer fundraising program based on a long-term analysis of the organization's needs and direction. This form of campaign can wrap together capital projects, endowment and operating expenses as its purpose, and use a variety of fundraising activities, such as annual gift drives, which are "slower-paced and lack the intensity of the traditional capital campaign".
Some non-profit organizations demonstrate greater accountability by showing donors the direct impact of their fundraising efforts. This accountability may comes in the form of a vote, where the members select a specific program or charity that they would like their money to go to. Another example is put in place a mechanism which allows donors to contraint usage of funds toward a specific purpose and closely monitor/allow spending to ensure proper usage.
Many non-profit organizations take advantage of the services of professional fundraisers. These fundraisers may be paid for their services either through fees unrelated to the amounts of money to be raised, or by retaining a percentage of raised funds (percentage-based compensation). The latter approach is expressly forbidden under the Code of Ethics of the Association of Fundraising Professionals (AFP), a professional membership body.However, by far the most common practice of American non-profits is to employ a staff person whose main responsibility is fund raising. This person is paid a salary like any other employee, and is usually a part of the top management staff of the organization.
Some non-profit organizations nonetheless engage fundraisers who are paid a percentage of the funds they raise. In the United States, this ratio of funds retained to funds passed on to the non-profit is subject to reporting to a number of state's Attorneys General or Secretaries of state.This ratio is highly variable and subject to change over time and place, and it is a point of contention between a segment of the general public and the non-profit organizations.
The term "professional fundraiser" is in many cases a legislated term referring to third-party firms whose services are contracted for, whereas "fundraising professionals" or development officers are often individuals or staff at charitable non-profits. Although potentially confusing, the distinction is an important one to note.
Online and mobile fundraising had become a popular fundraising method over the last few years due to its accessibility. Fundraising organizations are using mobile and online fundraising providers to attract donors around the globe. Common online and mobile fundraising methods include online donation pages, text to give, mobile silent auctions, and peer to peer fundraising.
Since 2016, online giving has grown by 17% in the United States. In 2018, digital fundraising accounted for 8.5% percent of charitable donations and 24% of online donations were made on a mobile device in the United States.
Organizations in the United States established for charitable purposes are allowed to raise funds from many sources. They are given a specific designation by the Internal Revenue Service (IRS), commonly noted as 501(c)(3) organizations. Other nonprofits such as fraternal associations have different IRS designations, and may or may not be eligible to raise funds. Financial information on many nonprofits, including all nonprofits that file annual IRS 990 forms is available from GuideStar.
...socialized together...approach of future fund-raisings by GPs...
A nonprofit organization (NPO), also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in contrast with an entity that operates as a business aiming to generate a profit for its owners. A nonprofit is subject to the non-distribution constraint: any revenues that exceed expenses must be committed to the organization's purpose, not taken by private parties. A wide array of organizations are nonprofit, including most political organizations, schools, business associations, churches, social clubs, and consumer cooperatives. Nonprofit entities generally seek approval from governments to be tax-exempt, and some may also qualify to receive tax-deductible contributions, but an entity may incorporate as a nonprofit entity without securing tax-exempt status.
United Way is an international network of over 1,800 local nonprofit fundraising affiliates. Membership to United Way and use of the United Way brand is overseen by the United Way Worldwide umbrella organization.
Car donation is the practice of giving away no-longer-wanted automobiles or other vehicles to charitable organizations. In the United States, these donations can provide a tax benefit.
A financial endowment is a legal structure for managing, and in many cases indefinitely perpetuating, a pool of financial, real estate, or other investments for a specific purpose according to the will of its founders and donors. Endowments are often structured so that the principal value is kept intact, while the investment income or a small part of the principal is available for use each year.
Matching funds are funds that are set to be paid in proportion to funds available from other sources. Matching fund payments usually arise in situations of charity or public good. The terms cost sharing, in-kind, and matching can be used interchangeably but refer to different types of donations.
Street fundraising consists of various ways of asking for donations on behalf of a charity. Those asking for donations may be paid employees of the charity, or they may be volunteers.
GiveIndia(Giving Impetus to Voluntary Effort) is a non profit organisation in India. It is an online donation platform and aims to channel and provide resources to credible non-governmental organisations across India. As a web portal, it helps raise funds and contributions from individuals across India and the world and then disburses these donations to credible Indian NGOs.
In the United States, a donor-advised fund is a charitable giving vehicle administered by a public charity created to manage charitable donations on behalf of organizations, families, or individuals. To participate in a donor-advised fund, a donating individual or organization opens an account in the fund and deposits cash, securities, or other financial instruments. They surrender ownership of anything they put in the fund, but retain advisory privileges over how their account is invested, and how it distributes money to charities.
Network for Good is a certified B Corporation software company that offers fundraising software and coaching for charities and non-profit organizations. The company was founded in 2001 by America Online, Cisco Systems and Yahoo! and has processed over $2.2 billion in donations since inception. Network for Good charges between 3% to 5% transaction processing fee for donations, in addition to any subscription fees that the charity might incur. Transaction processing costs may be covered by the donor or by the nonprofit organization.
A foundation in the United States is a type of charitable organization. However, the Internal Revenue Code distinguishes between private foundations and public charities. Private foundations have more restrictions and fewer tax benefits than public charities like community foundations.
Old Bill's Fun Run For Charities is an innovative fundraising event, administered by the Community Foundation of Jackson Hole, which takes place annually in the town of Jackson, Wyoming. The first event of its kind in the nation, Old Bill's began in 1997 and to date has helped Jackson Hole charities raise over $121 million. Funds from the event are restricted for use in Teton County, Wyoming and Teton County, Idaho, however 2007 marked the last year of participation by charities from Idaho.
InfoCision Management Corporation is a company that operates call centers. Based in Bath Township, Ohio outside of Akron, it is the second-largest teleservice company in the United States. It operates 30 call centers at 12 locations in Ohio, West Virginia, and Pennsylvania, employing more than 4,000 people. The company "specializes in political, Christian and nonprofit fundraising, and sales and customer care."
A charitable organization in Canada is regulated under the Canadian Income Tax Act through the Charities Directorate of the Canada Revenue Agency (CRA).
CrowdRise is a for-profit crowdfunding platform that raises charitable donations. CrowdRise was founded by Edward Norton, Shauna Robertson, and the founders of Moosejaw, Robert and Jeffrey Wolfe. CrowdRise was acquired in 2017 by GoFundMe.
School fundraising or school fund raising is the practice of raising money to support educational enrichment programs by schools or school groups mostly known from the United States. One of the most prevalent practices in the United States is product fundraising. Schools and other non-profits raise $1.7 billion each year by selling popular consumer items. Eight out of 10 Americans support these types of programs. In addition, schools and school groups such as their Parent Teacher Organization and Parent Teacher Association find many creative ways to raise funds—from bake sales, dinner events, auctions and school carnivals to more aggressive advertising, affinity programs, grant writing and straight forward donation requests.
GlobalGiving is 501(c)(3) non-profit organization based in the United States that provides a global crowdfunding platform for grassroots charitable projects. Since 2002, more than 1.1M donors on GlobalGiving have donated move than $530 million to support more than 28,000 projects in 170 countries.
Crowdfunding is a process in which individuals or groups pool money and other resources to fund projects initiated by other people or organizations "without standard financial intermediaries." Crowdfunded projects may include creative works, products, nonprofit organizations, supporting entrepreneurship, businesses, or donations for a specific purpose. Crowdfunding usually takes place via an online portal that handles the financial transactions involved and may also provide services such as media hosting, social networking, and facilitating contact with contributors. It has increased since the passage of the Jumpstart Our Business Startups (JOBS) Act.
Aplos Software is a privately held company that specializes in software as a service for nonprofit organizations. Their primary focus is simple software to manage the essential nonprofit tasks of fund accounting, nonprofit tax preparation and donor management for small, mid-sized, and large non-profit organizations.
Circle of Friends for American Veterans (COFAV) is a 501(c)(3) organization that supports veterans and related causes. It was founded in 1993 in Falls Church, Virginia by Brian Arthur Hampton. The charity is criticized for spending about 10% of their income for charitable causes, with the remainder being paid to fundraisers.
Outreach Calling Inc is a for-profit fundraiser which was incorporated in 2009. It is headquartered in New Jersey and offices in the United States and Canada with a virtual office in Reno, Nevada. The firm’s telemarketers solicit funds on behalf of not-for-profit charities. In 2012 they raised $21,332,659. Of that $20,227,761 was retained by the charities.
|Wikimedia Commons has media related to fundraising .|