New fundraising techniques and methods come into existence every year, but the basic ones should be the backbone of your fundraising efforts. These are, literally, your "bread and butter."
So, where does the money come from?
- Individuals are the largest source of funding for nonprofit organizations. According to Giving USA, individual giving to nonprofits reached $252 billion plus in 2007.
- Corporations give in order to get...exposure, publicity, community respect, market share. Their funding is more episodic, revolving around particular campaigns, events, and projects. Corporate funding can be a good source of support for new initiatives, special programs, and special events.
- Local and State Governments will sometimes fund projects that benefit the people in those areas. Examples are social service programs, cultural resources, and educational opportunities.
- Federated Funds such as United Ways, United Arts, etc., can be steady sources of relatively large amounts of money. Available only to well established nonprofit organizations.
- Foundations come in various sizes and types but their grants can be important and substantial.
- Private Foundations usually have large assets and issue annual reports.
- Corporate Foundations are private foundations but their boards are often made up of corporate officers. Their endowment funds are separate from the corporation and they have their own professional staff.
- Community Foundations pool the assets of many donors and are usually community service organizations.
- Family Foundations receive endowments from individuals or families.
Ongoing Vs Episodic Funding
Besides seeking support from a variety of sources, your fundraising program should seek both ongoing financial support and episodic support.
Ongoing support is usually gained through:
- The Annual Fund. An annual fund means just that, annual (or more frequent) appeals to a core group of constituents. Such funds are usually unrestricted (available for any use) and may represent a large percentage of your annual income.
- Ongoing Sales of Products and Services. Some non-profits own stores, produce products, or provide services that can represent a substantial income stream. The Girl Scouts is one obvious example with its annual sale of Girl Scout cookies, and Goodwill Industries is probably the largest nonprofit retailer. But other organizations sell logo-branded merchandise (an example is the American Legacy Foundation's Sunburst jewelry collection) or specialized services.
- Multi-Year Grants. A grant-giving organization such as a foundation may provide restricted funding for a particular project or program. If the grant covers a period of time (say 5 years), then the money can be considered ongoing support for the length of the grant. This money can only be used for the named project (restricted).
Episodic funding can come from foundation or corporate grants; special events; or a bequest. These funds may be restricted to one purpose or devoted to unrestricted use by the nonprofit.
Two Special Types of Fundraising
Two types of funding fall outside the scope of ongoing and episodic methods and include a wide range of sources.
- The Capital Campaign. A capital campaign is a multi-year fundraising campaign with a particular goal such as:
- funding a new building.
- raising funds for a particular project, such as cancer research.
- increasing a particular asset such as an endowment.
- Planned Giving. Most nonprofits now have planned giving programs which enable a donor to confer a gift at the time of his/her death; or to give a large gift immediately while receiving income during the donor's life.
A good fundraising strategy will include a balance of these techniques and sources. Establishing unrestricted, ongoing funding is the most important, followed by other funding that will grow the organization and ensure its future.
