Nonprofit Fundraising: The Ultimate Guide

What is Nonprofit Fundraising?

Fundraising is the process of asking for contributions from individuals, companies, and foundations. Nonprofits can fundraise through a variety of digital and traditional communication methods.

Why is Fundraising Important?

Fundraising, in all of its forms, is crucial for nonprofits to complete their projects and fulfill their causes. Without fundraising, organizations would have no incoming revenue.

How Can I Get Started with Fundraising?

That’s easy! The best place to get started with nonprofit fundraising is this very guide. We’ve got all of the answers to your fundraising questions and can help you get started with asking for donations.

Nonprofit Fundraising Strategies

Individuals

Individual giving makes up nearly three-fourths of all charitable contributions.

People in your nonprofit’s community and around the world can give to your organization in a multitude of ways. Just click on one of the items to the right to learn more about it!

Each section describes the fundraising method, highlights its importance, suggests ways to get started, and offers up best practices.

Companies

Companies and businesses have their own ways to give back to the nonprofit community. Check out these four avenues for corporate giving.

Each section describes the fundraising method, highlights its importance, suggests ways to get started, and offers up best practices.

Foundations

Foundations distribute grants to qualifying nonprofits who submit applications. Learn more about the two main types of grants.

Each section describes the fundraising method, highlights its importance, suggests ways to get started, and offers up best practices.

How Nonprofits Can Raise Money From Individuals

Online Donations

Simplicity
✓ ✓ ✓ ✓

Cost
$ $

Popularity
+ + + +

What Are They?

Online donations are contributions that a donor makes via a nonprofit’s online donation page. It’s surged in recent years due to the ease of donating and the fact that nearly everyone is online in some capacity.

Nearly every organization accepts donations online. While some might use a PayPal button on their website, others build customized donation forms.

Online donation forms allow nonprofits to raise money from virtually anywhere! As long as their website is up and running and donors have access to the internet, a nonprofit can fundraise.

Because most donors are on the web looking for information about organizations anyway, an online donation page is also extremely convenient for nonprofit fundraising.

How to Get Started

First, you’ll need to optimize your website so that it creates the best giving experience for donors.

Create a sleek and aesthetically-appealing site that supporters will want to stay on throughout the donation process.

Then, you’ll need to create a great online donation page. If you have the means to do so, you can complete this in-house. If not, there are tons of great online donation tools that can help you!

Finally, you’ll need to make sure that donors can quickly find your donation page.

Place “Donate Now” buttons on your website and include the link to your form in all of your digital communications.

Best Practices

#1: Keep your form simple. Donors shouldn’t have to fill out multiple required fields and click through more than one page to give to your nonprofit. Make sure that the donation process is easy from start to finish.

#2: Maintain consistent branding. If your donation page looks nothing like the rest of your website, donors will likely become suspicious and abandon the process. Include the same colors, fonts, and wording on your donation form as the rest of your site.

#3: Protect donor data. Choose a provider that maintains the highest level of security on their donation pages. Donors will be able to give with confidence when they know that their information is safe.

Fundly is a great crowdfunding platform where you can host a t-shirt fundraiser.

Text Donations

Simplicity
✓ ✓ ✓ ✓

Cost
$ $

Popularity
+ + + +

What Are They?

Text donations are contributions that supporters can make via their cellphone. It’s a relatively new nonprofit fundraising technique, but it’s already found quite a following due to its popularity!

Donors simply text a keyword and an amount to a nonprofit’s specific number. They are then sent the link to the nonprofit’s mobile-responsive donation page. Once a donor fills out their info on this form, they never have to fill it in again. They just text the keyword and donation amount to give!

Text-to-give is one of the easiest and most efficient ways to raise money. Text-to-give is also insanely convenient. Nearly everyone has a smartphone and uses it on a daily, if not hourly, basis.

How to Get Started

First, you’ll need to find a great text-to-give provider.

There is no shortage of services that can help your organization raise money via text message.

Then, you have to determine how you’re going to implement text giving.

Will you only use it at fundraising events? Will it become an integral part of your nonprofit fundraising strategy?

Whatever you choose, you’ll then need to promote text-to-give to your donors and provide them with easy-to-follow instructions for texting in their donations.

Best Practices

#1: Pick the right provider. Some providers work with the Mobile Giving Foundation and others are independent. Those that work with the Foundation have donation caps, and contributions are tacked onto their phone bill at the end of the month. Independent providers give nonprofits access to their funds almost instantly.

#2: Choose a memorable keyword. If you want donors to give over and over again, make your keyword easy to remember and type.

#3: Properly promote text-to-give. Because it’s a fairly new giving avenue, many people might not immediately think of text-to-give as a fundraising method. Promote your text giving option so that donors know how easy it is to give to your cause.

Qgiv is a great nonprofit donation tool for capital campaigns

Peer-to-Peer Fundraising

Simplicity
✓ ✓ ✓

Cost
$ $

Popularity
+ + + +

What Is It?

Peer-to-peer fundraising is a way for your supporters to fundraise on your organization’s behalf.

Peer-to-peer fundraising is usually tied to an event like a marathon or walkathon and requires your supporters to reach out to their friends, family members, and coworkers to ask for donations.

Contributions are made through individualized donation pages that are linked up to your nonprofit’s main donation form.

When supporters fundraise on your behalf, they are essentially recruiting new donors, giving your donor acquisition rates a boost!

Additionally, peer-to-peer fundraising is also the most common way to fund events like marathons, walkathons, fun runs, and cycling events.

How to Get Started

First, you’ll need to decide what event you’re going to pair your peer-to-peer fundraising efforts with. It tends to work best with active group events, like races.

Then, you’ll have to purchase a great peer-to-peer fundraising platform.

Make sure you pay attention to the platform’s features and pricing. You don’t want to lose money while you’re trying to raise money!

Next, start recruiting supporters.

You’ll need dedicated donors and volunteers who have shown a great interest in your organization in the past.

Then, give them the materials to fundraise on your behalf! These materials could include social media templates or special training sessions.

Best Practices

#1: Choose the right supporters. Someone who has only given to your nonprofit once probably isn’t the best choice for a peer-to-peer supporter. Instead, look at past involvement and giving patterns to select dedicated fundraisers.

#2: Offer support and training. Most of your supporters will have no fundraising experience. Give them the tools they need for successful fundraising. These tools include templates for emails and social media posts as well as video training seminars and email support.

#3: Tell a story. Nothing inspires people to give more than a personal story. Focus your general peer-to-peer efforts around one specific story, Your fundraisers can talk about their own experiences when asking for donations. The more personally connected someone is to a cause, the easier it is for them to ask for donations for that cause.

Annual Campaign Donations

Simplicity
✓ ✓

Cost
$ $

Popularity
+ + + +

What Are They?

Annual campaign donations are contributions for a nonprofit’s annual fund which is comprised of the money that keeps an organization running. Other campaigns focus on raising money for specific projects. An annual campaign is more of a general operational fund.

Annual campaign donations can be checks, online contributions, text message donations, and more!

Donations made to an annual campaign help keep a nonprofit running. Annual fund donations pay for salaries, office supplies, marketing materials, and equipment.

How to Get Started

Nonprofit fundraising for an annual campaign should take place before any specific campaigns are launched.

You’ll need to prepare marketing materials and start asking for donations from a variety of supporters in different ways.

An annual fund is an ongoing process, so the work never really stops.

But once you have a loyal base of donors who give regularly to your organization, your annual campaigns will grow each year.

Best Practices

#1: Highlight how donors can help you. Donors won’t just donate money because you ask for it. You have to explain how an annual campaign donation will ultimately help your organization further its mission and accomplish its projects.

#2: Get everyone involved. An annual campaign is an “all hands on deck” affair. It cannot be successfully run by one person. Instead, encourage your board members, other leadership, and everyone in your nonprofit’s office to play a part in the annual campaign. Every little bit counts!

Nonprofit fundraising - annual campaigns - NeonCRM

Event Donations

Simplicity
✓ ✓

Cost
$ $ $

Popularity
+ + + +

What Are They?

Event donations are contributions that supporters make during a fundraising event such as a gala, walkathon, or charity auction. Depending on the type of event, the money raised might come in different forms.

For instance, during a charity auction, fundraising dollars might come in the form of winning bids, whereas at a gala, donors might text in their donations.

Event donations are just a small part of the event fundraising puzzle, but they’re important because they can encourage many people to give at once.

Peer pressure is a great motivating factor. If someone at your gala sees that the person they’re sitting next to texting in a donation, they might be encouraged to give as well!

How to Get Started

First, you’ll need to decide what kind of event you’re going to host.

As any seasoned fundraising professional will tell you, planning and executing a fundraising event is no easy task, and most of them require months, if not a year, of preparation.

Then, figure out how you’re going to ask for donations during the event. The method you choose will likely depend on the type of event you’re hosting.

You could make a live appeal at some point during the event.

Or, you could set up a donation table or booth where those who want to can make a contribution.

Best Practices

#1: Choose the right event for your organization. If you’re a small and fairly new nonprofit, it’s not a good idea to host an elaborate auction or gala that will cost more money than it will bring in. Start small and plan events that will make money and be enticing to donors.

#2: Find the right giving method. If you want people to text-to-give, invest in a great mobile giving platform. If you plan on setting up a booth or table, make sure you get a credit card reader so that donors who don’t have cash can still contribute.

#3: Make several live appeals. Donors might not know that they can give during your fundraising event unless you tell them so! Actively promote any giving software that you’re using and make sure that attendees know where your donation table or booth is.

Nonprofit fundraising - event fundraising - BidPal

Mobile Donations

Simplicity
✓ ✓ ✓

Cost
$ $

Popularity
+ + + +

What Are They?

Mobile donations are any contributions that a donor makes via a mobile device. They can include text-to-give donations, but it also encompasses any gift made on a mobile-responsive donation page, emailed donation appeals, and mobile giving apps.

Mobile giving is surging in popularity because it enables donors to give from anywhere via a technology they’re extremely familiar with.

If you employ mobile donation methods, your nonprofit will be helping lead the charge toward smarter fundraising.

How to Get Started

Before you start raising money from mobile devices, you need to decide what type of mobile giving you’re going to employ.

You could use all of them, but it’s best to start with one or two avenues that you think your donors would use regularly.

Then, start promoting those giving methods to your mobile-using donors.

Before you know it, you’ll be receiving more mobile donations than ever!

Best Practices

#1: Find the right mobile giving solution for your nonprofit and your donors. If you can’t afford a mobile giving app or your donors don’t express an interest in text-to-give, find another mobile giving route that works for both you and your supporters.

#2: Actively promote mobile giving to your donors. Supporters won’t know that they can conveniently give to your nonprofit unless you tell them! Mention your mobile giving options in all of your digital (and even in some of your traditional) communications.

Nonprofit fundraising - mobile giving - @Pay

Major Gifts

Simplicity
✓ ✓

Cost
$ $

Popularity
+ + + +

What Are They?

Major gifts are typically made by donors with close ties to the organization.

The definition of a major gift will vary depending on a nonprofit’s size and past fundraising efforts. For some, anything over $2,000 is considered major, while others would only count donations that are at least five figures.

Major gifts are some of the most substantial contributions that a nonprofit can receive from an individual. They inevitably tie a donor more closely to the nonprofit that he or she makes the donation to.

Additionally, donors can receive tax benefits for donating a substantial amount of money to a charitable organizations.

Major gifts are important types of nonprofit fundraising for both parties involved.

How to Get Started

You probably won’t immediately know who your major gift donors are. Unless someone has expressed an explicit interest in donating a large sum of money to your organization, you’ll have to do some research to find your major gift donors.

Prospect research can be a huge benefit when looking for major donors. You can use prospect research to look at previous giving and involvement as well as common wealth markers and other indicators to better prepare your staff for a major donation appeal.

It’s nearly impossible to find major gift donors without doing some research beforehand. It’s important to:

#1: Segment your database into giving levels.
#2: Look at previous giving. Examine past donations to your nonprofit and other organizations.
#3: Research property ownership and other wealth markers.

Best Practices

#1: Ask for the right amount. If you ask for too much, your donor will be insulted. If you ask for too little, you’re leaving money on the table. Look at previous giving patterns and talk to the prospect to find what amount will work best for them.

#2: Form a major donor club. If you want to offer an extra perk to potential major gift donors, you can form a major gift club or society. This can be a great way for your organization to communicate with major gift donors about where their donations could go and how they can give in the future.

#3: Practice your pitch. You never want to go into a major gift meeting unprepared. In order to have the greatest success, you’ll need to practice your pitch and the different scenarios that could play out during the meeting.

Nonprofit fundraising - major gifts - DonorSearch

Capital Campaigns

Simplicity
✓ ✓

Cost
$ $ $

Popularity
+ + + +

What Are They?

Capital campaigns are large fundraising initiatives that aim to raise money for a specific project like a new building, an expansion to an existing structure, or the supplication of an endowment. They usually last for at least one year but can go on for much longer.

Capital campaigns are split into two phases: the quiet phase and the public phase.

During the quiet phase, a nonprofit solicits companies and major gift donors to try to raise between 60% and 90% of the total goal.

The public phase is then opened to all donors and is when the rest of the goal is met.

Capital campaigns allow nonprofits to raise money in a very targeted and purposeful way.

How to Get Started

First, a nonprofit will need to complete a feasibility study. This study measures the community’s reception to the project.

Feasibility studies help nonprofits determine whether or not they will be able to fund the campaign over the course of several months or years.

If the feasibility study shows that the nonprofit has the capacity to launch the capital campaign, the organization will then begin the quiet phase and will start soliciting local businesses and major gift donors for large donations.

Once 60% to 90% of the overall goal has been met, the nonprofit will transition into the public phase and begin asking for donations from members of the general public until the entire goal has been met.

Best Practices

#1: Be smart about your resources. While hiring a capital campaign consultant will cost money, they provide valuable skills that will be beneficial to your campaign. Consultants can assist with planning a strategy, conducting a feasibility study, and writing the case for support — all aspects that lead to a successful campaign. 

#2: Enlist the help of your board. Not only should your board of directors actively help you raise money for your capital campaign, but they should also contribute “lead gifts” of their own to show their support.

#3: Create a separate donation page. Since a campaign can take months or even years to completely fund, it’s worth creating a separate donation page that is different than your standard fundraising page. You can use the URL for the campaign-specific donation form in your marketing materials as well.

Nonprofit fundraising - capital campaigns - DonorSearch
Note

Don’t forget to grab our Free Guide to the Top Fundraising Ideas.

Planned Gifts

Simplicity
✓ ✓

Cost
$ $

Popularity
+ + + +

What Are They?

Planned gifts are donations set aside in the present that are then made in the future. Individuals often delineate planned gifts in their wills or bequests.

Planned gifts are often substantial amounts of money made by very loyal supporters. Some planned gifts are anticipated, but sometimes a nonprofit will be pleasantly surprised by a substantial planned donation.

Planned gifts offer donors the opportunity to express their appreciation for a nonprofit in a very tangible way.

How to Get Started

To get started with planned giving, you’ll need to determine who among your donor base would be a likely candidate for a planned gift.

Because planned giving is considered a major decision and can be a delicate topic, it’s best to thoroughly research a prospect or simply wait for them to approach your nonprofit with the notion.

If you do thorough research, you will have a better handle on who might be a potential planned giving prospect.

Best Practices

#1: Form an advisory committee. Your staff is likely unaware of all of the technical, legal, and even ethical rules that surround planned giving. You might need to form a team of lawyers, financial advisors, and other experts before and during the development of your planned giving program.

#2: Allow donors to choose what component of your organization their funds will go toward. A planned donation is a big commitment for a donor to make. Since they’re usually substantial amounts of money, it’s wise to let supporters choose a particular component of your organization to direct their funds to.

Phonathon

Simplicity
✓ ✓ ✓

Cost
$ $

Popularity
+ + + +

What Is It?

A phonathon is a fundraising campaign that requires volunteers to call donors to ask for contributions. Schools and colleges use phonathons to solicit donations from alumni, but they can be used by any kind of organization.

You can’t realistically go out and meet all of your donors. But if you can talk to them on the phone for a few minutes, it helps to humanize your organization.

Donors then think of your nonprofit as a group of people trying to support a noble cause instead of a organization that asks for money every few months.

How to Get Started

First, you’ll need to develop a phonathon script. While callers shouldn’t necessarily read the script word for word while they’re on the phone with donors, it should list out several talking points and responses that volunteers can use when they talk to supporters.

You might also need to employ the help of a phonathon service or software to help you manage and track calls and process donations.

Don’t forget: you’ll also have to have a list of donors’ current phone numbers.

You can’t host a phonathon without numbers to call!

Best Practices

#1: Properly train your volunteers. If you want to run a successful phonathon, you need to properly prepare your fundraisers and volunteers. Some of them may have never asked for donations over the phone, and you want them to be as eloquent and equipped as possible. Proper phonathon training is essential.

#2: Focus on your mission. Phonathon conversations should be engaging, but make sure that your volunteers stay on track. If you notice that someone seems to be getting off topic during a call, offer them feedback and perhaps additional training.

Direct Mail Donations

Simplicity
✓ ✓

Cost
$ $ $

Popularity
+ + + +

What Are They?

Donations made by direct mail are usually made in the form of checks. Donors who use this method are usually older and prefer a more traditional giving method.

Direct mail can be used by anyone as long as you provide a self-addressed envelope, and, until recently, was one of the most popular ways to donate.

Direct mail donations are important because they help your donors form a personal connection with your organization.

Additionally, a direct mail donation can give hesitant online donors an avenue to contribute. They might feel more comfortable sending in a check over making an online donation.

How to Get Started

To get started with direct mail fundraising, you’ll need to determine who you’re going to send letter appeals to.

Direct mail can be pricey, and you want to send out appeals to the people who are going to be the most receptive.

Next, you’ll need to write a great appeal. Donors won’t give to your organization just because you ask them to.

You have to convince them to join your cause and support your mission.

Then, start sending! Mail out appeal letters a few times a year. You don’t want to bombard donors, but you don’t want them to forget about you, either.

Best Practices

#1: Send out letters only to those donors who have responded to them in the past or who you anticipate will respond to them. Don’t waste money on soliciting donors who don’t contribute via direct mail.

#2: Include images in your letters or cards. Donors won’t get past the first paragraph if they see a wall of text with no visual break. Include photos of the people or animals you help.

#3: Don’t forget to include the self-addressed envelope! Supporters can’t give to your organization if they don’t know where to send their checks.

Recurring Donations

Simplicity
✓ ✓ ✓ ✓

Cost
$

Popularity
+ + + +

What Are They?

Recurring donations are contributions that a donor elects to make on a regular basis.

Usually, they are monthly or quarterly donations, but they can be made as frequently as weekly.

Recurring donations can be made via check, text-to-give, or through an online donation page (if your form offers donors that option).

Recurring donations give donors the ability to automate their contributions. They also boost donor retention rates.

How to Get Started

If you want to start encouraging donors to make recurring contributions, you should set up your online donation page to accept these kinds of donations.

If this is a feature that your donation page provider or text-to-give software offers, take advantage of it!

For direct mail donations, you can send donors information about the ease and convenience of recurring donations and encourage them to send in their contributions on a monthly or quarterly basis.

Best Practices

#1: Offer a lot of different donation schedules. Not every donor will want to give on a monthly basis. And some will want to give as frequently as once a week. Make sure that you include options to suit every preference.

#2: Explain the impact of recurring donations. If donors see the importance that their regular contributions have, they will be more likely to donation on a recurring basis. Spell out to donors that, while one contribution could make a difference, multiple donations could help your cause in even more ways.

How Nonprofits Can Raise Money From Companies

Matching Gifts

Simplicity
✓ ✓ ✓ ✓

Cost
$

Popularity
+ + + +

What Are They?

Matching gifts essentially double eligible donations that a company’s employees make to your nonprofit.

After a donor makes a contribution, they can submit paperwork to their company’s HR department. If the donation and your nonprofit are eligible, they will cut a check to your nonprofit for the same amount as the initial donation.

Matching gift programs allow companies to exercise their corporate philanthropy initiatives. They also help donors give twice as much without opening their wallets a second time.

How to Get Started

In reality, it’s completely up to donors to submit the paperwork for matching gifts.

However, that doesn’t mean that your nonprofit can’t actively promote matching gift programs to your donors!

In fact, you should let donors know about matching gifts in all of your communications, on your donation page, and on your acknowledgement screens.

If donors don’t know that matching gift programs exist, they won’t know to fill out the requests.

Best Practices

#1: Use a matching gift tool. A matching gift tool (like Double the Donation’s!) will help your donors research their employers’ specific matching gift programs. They can look up forms, guidelines, deadlines, and restrictions during the donation process or directly thereafter.

#2: Thank donors and employers. If a company sends your nonprofit a matching donation, make sure you acknowledge both the original donor and the corporation.

Nonprofit fundraising - matching gifts - 360 Match Pro

Corporate Grants

Simplicity
✓ ✓

Cost
$ $

Popularity
+ +

What Are They?

Corporate grants are local, state, or national grants that companies distribute to eligible nonprofits.

Sometimes, a company will select a nonprofit to give the money to. Other times, nonprofits send in their grant applications and the company will make a selection from the applicant pool.

Companies tend to issue grants via their corporate philanthropy or corporate social responsibility offices or through a corporate foundation.

How to Get Started

If a company selects a grant-recipient internally, there isn’t a whole lot an organization can do.

However, if there is an open application process, the nonprofit should attempt to apply for the grant (when it fits in with the guidelines).

Grant applications can take months to complete, and nonprofits should take the process very seriously.

Best Practices

#1: Use professional resources, when necessary. Your staff members may not be very well-versed in grant writing. If that’s the case, you can hire a professional grant writer. Just make sure that your budget has enough room in it for professional help.

#2: Apply for relevant grants. If you’re an clean-air nonprofit, you probably don’t need to apply for a grant from a company focused on coal-based energy. Make sure that you apply for grants that align with your nonprofit’s mission.

Volunteer Grants

Simplicity
✓ ✓ ✓ ✓

Cost
$

Popularity
+ + +

What Are They?

Volunteer grants are sums of money that companies will distribute after employees have volunteered a minimum number of hours with an eligible nonprofit.

There are individual volunteer grants that reward one employee’s volunteer efforts. Similarly, team volunteer grants are made after a group of employees volunteer together at a nonprofit for a certain number of hours.

Volunteer grants allow corporate volunteers to give back monetarily to the nonprofits that they care about.

Additionally, nonprofits benefit by receiving both volunteer time and charitable donations.

How to Get Started

Just like matching gift programs, volunteer grants rely on supporters to actively submit their grant requests to their employers.

However, you can still promote volunteer grants to your loyal volunteers and encourage them to submit their applications to their company’s HR department.

Mention volunteer grants in your communications to volunteers and during special volunteer days and events.

The more your supporters know about volunteer grants, the more likely they’ll be to submit those requests to their employers.

Best Practices

#1: Include volunteer grant info in your volunteer-centric newsletters. If you send out a special newsletter to your volunteers, use it to get the word out about volunteer grants and the impact that they can have.

#2: Make sure your volunteers know how volunteer grants work. Make sure that you explicitly lay out the general rules for the basic volunteer grant programs.

#3: Encourage corporate volunteer days. If you know that a local company has a team volunteer grant program, encourage groups of employees to volunteer together at your nonprofit. You can even form a closer corporate partnership with that company that will be beneficial down the line!

In-Kind Donations

Simplicity
✓ ✓ ✓ ✓

Cost
$

Popularity
+ + +

What Are They?

In-kind donations are contributions of products or services that companies give to nonprofits. They usually encompass things like food and drinks for an event, free or discounted tax services during tax season, or equipment for a building project.

In-kind donations usually come from companies with whom the nonprofit has a standing partnership or relationship with.

In-kind donations help to ease a financial burden and allow nonprofits to complete the projects and host the events that they need to.

How to Get Started

Most in-kind donations are given by companies who have close ties or partnership with the nonprofit in question.

Therefore, you’ll need to make sure that you’re asking the right company for an in-kind donation.

You’ll also want to start by formalizing your request with a letter sent to the CSR or corporate philanthropy office.

If a company has specific guidelines for requests for in-kind donations, make sure that you follow them.

Best Practices

#1: Start with your closest connections. Ask for in-kind donations from companies that are physically close to yours and with whom you have an existing partnership.

#2: Ask the right company for the right kind of donation. If you need flowers for your gala, ask a florist. If you need food for your next auction, ask a catering company. Find the right corporate donor for your needs.

#3: Ask the right person. Instead of emailing and calling al the wrong people, find out who is in charge of philanthropic initiatives and contact that person first.

Note

Don’t forget to grab our Free Guide to the Top Fundraising Ideas.

How Nonprofits Can Raise Money From Foundations

Community Foundation Grants

Simplicity
✓ ✓

Cost
$ $

Popularity
+ + +

What Are They?

Community foundation grants are sums of money that are distributed by local, state, or national foundations.

These foundations are actually nonprofit entities and are run by the organization as a way to help other nonprofits receive funding.

Grants can be applied for and received annually. Some foundations have a rigorous application process, while others will award the grant amount to a nonprofit that they choose internally.

Additionally, if the grant occurs annually, then the nonprofit has a steady stream of revenue from that one foundation.

How to Get Started

The application process for a community foundation grant can take months. You’ll want to make sure that you have a point person to head up all of your application processes and can communicate with representatives at the foundation.

You might even need to bring on a professional grant writer to help your organization with the application process.

If you decide to apply for several different grants during the same calendar year, you can put your organization on a grant application calendar.

Best Practices

#1: Apply for relevant grants. Many foundations will place restrictions on how a nonprofit can use a grant and what kinds of organizations can even apply. Make sure that you look at the guidelines and only apply for grants that you can realistically receive.

#2: Ask questions when you have them. Most foundations will allow nonprofits to get in touch with them regarding grant-specific questions. If you have them, ask them!

#3: Keep applying. If you don’t receive a grant the first time around, don’t get discouraged! It usually takes a few application processes before you receive the grant you’re going after.

Private or Family Foundation Grants

Simplicity
✓ ✓

Cost
$ $

Popularity
+ + +

What Are They?

Private or family foundation grants are very similar to community foundation grants.

The only difference is the source; private or family grants are made by private foundations while community grants are made by either corporate or community foundations.

Private or family grants can also be large sums of money that a private foundation gives to a nonprofit of their choice or after organizations have sent in their applications.

Additionally, some of these grants occur on a yearly basis, meaning that organizations have a steady source of funds.

How to Get Started

First, you’ll need to determine if you’re eligible to receive the private or family grant that you’re interested in.

Most foundations have stipulations and rules that organizations must follow before being considered for grant eligibility.

Study up on the grant you’re applying for and the foundation that is distributing it. Then start getting your application ready!

Each grant will require different materials, but if you follow the guidelines very carefully, you should be more than prepared.

Best Practices

#1: Find the right grant. Private and family foundations often have a certain focus. For example, the Bill and Melinda Gates Foundation supports initiatives related to education, world health and population, and community giving in the Pacific Northwest. If your organization doesn’t have anything to do with those areas, you probably don’t need to apply for one of their grants. Find a foundation whose mission aligns with your own.

#2: Follow all instructions. You don’t want to miss out on a large grant because you forgot or skipped over a crucial component of the application. Make sure that you follow all protocol and instructions.

Note

Don’t forget to grab our Free Guide to the Top Fundraising Ideas.

Getting Started with Nonprofit Fundraising

Why Do People Give to Nonprofits?

Desire to Help

Altruism is one of the top reasons people give to nonprofits. Individuals like to help the people in their communities and around the world.

Some people are more inclined to support only local community charities, while others like to give to larger internal nonprofits. However, the desire to help others is one of the primary factors for donating.

Internal Satisfaction

Some people donate because it makes them feel good about themselves. This motivator can live in conjunction with the altruistic desire to give.

The impact of the donation is not lessened by the fact that the donor gives it out of self-satisfaction. When individuals help others, they naturally feel a little better about themselves, motivating them to give in the future.

Personal Connection

Sometimes, an individual gives because they have a particularly strong personal connection to the cause or organization they’re supporting.

For instance, a cancer survivor will be more inclined to give to a cancer research institute than someone whose life has never been affected by cancer. Personal connections can be a huge driving force behind charitable donations.

Societal Expectations

Many people will give to a charity because their friends, family members, or coworkers are doing so. They donate because of peer pressure.

Again, this motivational factor can be combined with any other. No one is only giving because their best friend made a donation. They’re giving for a variety of reasons, and societal expectations might happen to be one of them.

Tax Incentives

A donation to a nonprofit organization may grant a donor a charitable deduction against their income tax if they itemize their deductions.

The higher a donor’s income bracket, the more their charitable deduction will be. And while getting a tax deduction usually isn’t a primary motivator for giving, it can be an incentive for donors who give a lot of money to nonprofits.

Impulsivity

Sometimes, a donor decides to give to a nonprofit on a whim. They may have never researched it, but they want to give a little.

Granted, this doesn’t happen all the time, but some donor demographics (like millennials) are more likely to donate in what seems like random spurts. Sometimes, people just feel extra generous and want to make a donation.

Who Do You Need for Nonprofit Fundraising?

Executive Director

The executive director of a nonprofit is the point person in charge of overall organizational fundraising.

The executive director usually helps cultivate and solicit major gift donors and form corporate partnerships.

Development Staff

The development staff is comprised of people who actively solicit donations from individuals, companies, and foundations.

Each staff member might be responsible for a different area of fundraising or a different level of giving. 

Board Members

A nonprofit’s board of directors is often heavily involved in the fundraising process. Board members can provide connections and introductions to corporate partners, major gift donors, and other sources of revenue.

Additionally, board members are usually expected to make some kind of contribution at least once a year, if not more frequently.

Volunteer Fundraisers

Sometimes, a nonprofit’s volunteers can become involved in the fundraising process. They might man the phones during a phonathon or go door-to-door during a specific campaign to ask for donations from individuals.

Volunteers can also be instrumental during a peer-to-peer fundraiser. They can ask their friends and family members for donations.

What Resources Will You Need for Nonprofit Fundraising?

Not every fundraising method will require the exact same set of resources. You won’t need the same tools for a capital campaign that you would need for a text-to-give campaign.

However, there are some standard resources that are crucial for nonprofit fundraising success regardless of how or why you’re asking for donations.

  • Financial Goal

    An overall financial goal gives your nonprofit direction and the ability to strategize when it comes to your different fundraising methods.

    Additionally, you should set individual goals for the specific campaigns you run throughout the year. Having a targeted goal in mind will motivate your staff members and volunteers and keep you on the right track.

  • Budget

    Unfortunately, it takes money to raise money. No matter what type of fundraising avenue you choose, you’ll have to pay for certain base costs like staff time, marketing materials, and donation collection.

    A nonprofit should always have an overall budget, but each of your campaigns should have its own itemized budget as well.

  • Volunteers

    Regardless of your organization’s size, you’ll likely need volunteers to help you run certain nonprofit fundraising endeavors.

    You might need a group of volunteers to assist with check-in and check-out at your charity auction. Or you could ask some supporters to help out during a phonathon. The point is, volunteers are an essential component of nonprofit fundraising.

  • Marketing Materials

    You’ll need to get the word out about whatever fundraising effort your nonprofit has chosen. Which means you’ll need comprehensive marketing materials.

    You can go the traditional route and print off pamphlets, flyers, banners, and rent billboards. But you can also go digital and create cohesive graphics and messaging for social media, email, and text message marketing.

  • Prospect Research

    Prospect research is an invaluable tool if your nonprofit wants to raise more money from planned and major gift donors. It allows you to dig into your database to look at past giving history and patterns.

    You can make better-informed decisions with prospect research in your back pocket. Consider conducting a prospect screening.

  • Donation Receipts

    Donation receipts are used by donors to claim charitable deductions on their taxes. They are required for donations greater than $250.

    You can send out donation receipts via email or direct mail, but they should be sent out no later than two weeks after a contribution has been made. They should include the donor’s name, donation amount, and your organization’s information.

Note

Don’t forget to grab our Free Guide to the Top Fundraising Ideas.

Nonprofit Fundraising Cycle

Click on one of the icons to learn more about that step in the cycle.

1. Identification
2. Qualification
3. Cultivation
4. Solicitation
5. Stewardship
1. Identification

Identification is the first step in the fundraising cycle. It involves using prospect research or other methods to determine which donors your nonprofit will be targeting for the specific campaign you’re launching.

When looking for individuals to ask for donations, it’s best to start with those who have frequently given to your organization in the past. Previous donations are the best indicators of future giving, after all!

You can also use prospect research to help narrow down your prospect list. The results of your prospect screening will depend on the type of donor you’re looking for. The candidates for a major giving program will likely be different than those for a broad text-to-give campaign.

If you’re looking to obtain corporate donations or foundation funding, you’ll need to identify companies and foundations whose missions align closely with yours. This will make it easier to make your case when asking for donations.

2. Qualification

Qualification is really an extension of identification. It involves someone from your nonprofit reaching out to a prospect to gauge their interest in giving to your organization.

Qualification is often used for major and planned giving donors or corporate partnerships. Because it usually involves a face-to-face meeting with a prospect (known as a “qualification visit”), it can’t be used for every single donor.

A qualification visit can be a nerve-wracking experience, even for a seasoned fundraising professional. The most important thing to remember, however, is that the conversation should be focused on the prospect. Don’t spend the whole meeting talking about how great your organization is or how badly you need money for an upcoming project.

Instead, pay attention to the prospect’s interests and preferences. Listen to them, and you’ll be far more prepared when it comes time to actually ask for a donation.

3. Cultivation

Cultivation is arguably one of the most important stages in the nonprofit fundraising cycle. It involves an organization and a prospect getting to know each other a little better.

It’s commonly likened to tending to a growing tree. Before a tree can become full-grown, you have to care for it, water it, and make sure that it gets lots of sunlight and nutrients. 

Treat your prospect relationships with the same care and deliberation that you would when growing a tree. Follow up with a prospect after a qualification visit. Invite them to a free event. Have a board member give them a call.

Obviously, you don’t want to overdo it. If you water a tree too much, it won’t flourish. Keep in touch with prospects enough so that your organization is in their minds but not so much that you start to irritate them.

4. Solicitation

You’ve worked hard to get to this point, and now it’s time to ask a prospect for a donation!

If you’re asking a major gift prospect, solicitation should take place in person or, in rare circumstances, over the phone (if a face-to-face meeting isn’t possible).

However, for less intense nonprofit fundraising methods, solicitation can take place in any number of ways. You could ask for donations via email, social media, letters, text message, or over the phone!

When soliciting a donor for any amount, remember to make a genuine ask. Remind prospects of what their donations will go toward and emphasize their gift’s impact.

Make the solicitation about your donors and how they can help your organization. Donor-centric solicitation methods are more successful that ones that focus on you and your nonprofit.

5. Stewardship

The nonprofit fundraising process isn’t over just because a donor has said “Yes!” and given to your organization.

The stewardship process begins as soon as a check has been written or an online donation has been made. 

You should immediately send donors a thank you note, letter, or email. Of course, a letter won’t be received as quickly as an email or phone call, but the sooner you can thank donors, the better.

You should also continue to steward your relationship with your donors in the weeks and months after they make a donation.

Offer supporters other opportunities to get involved based on the size of their donation and their own personal interests. You can invite them to events, encourage them to sign a petition, or ask them to volunteer with your organization.

Make sure that your stewardship activities are in line with donors’ relationship with your nonprofit and their past involvement.

Nonprofit Fundraising Ethics and Laws

Nonprofit Fundraising Registration

Where to Register?

In the United States, 40 of the 50 states require charitable solicitation registration in some form or another.

There is no standard form to fill out, so if you plan on asking for donations in a state, you have to submit your paperwork with that state.

Many states will, however, take the Unified Registration Statement, although they often require additional paperwork, forms, and sometimes a nonprofit’s IRS form 990.

If you know you’re going to be actively asking for donations in a particular state (where your nonprofit is based, for instance), you should definitely register with that state.

Additionally, if you have an online donation form, your donors could donate from any state; it’s wise to register with every state to avoid fines and penalties for soliciting donors in a state in which you aren’t registered.

What’s Needed to Register?

Because each state has different requirements, the paperwork your nonprofit submits will likely be different.

However, since 32 states take the Unified Registration Statement, it makes it a little easier for your nonprofit to get all of your ducks in a row.

You’ll also probably have to submit your IRS form 990 as well as different attachments, such as audited financial statements, articles of incorporation, and/or bylaws.

Many large nonprofits have third-party firms complete the registration process for them, but a nonprofit can complete the charitable solicitation registration process themselves.

Some state registration applications are available online while others still require paper submissions. Additionally, in many cases, states require charitable solicitation registration on a yearly basis.

When to Register?

Charitable solicitation registration must occur before a nonprofit begins fundraising. Otherwise, the organization could incur penalties or fines and might not be able to fundraise in that state.

Additionally, some states require nonprofits to register and report their financial results if they have assets that are tied to a charitable trust.

Are There Registration Exemptions?

Some nonprofits are not required to register with states before asking for donations. Nonprofit hospitals, educational and religious institutions are usually exempt from registering with the state.

Additionally, if a nonprofit is small or doesn’t bring in a certain amount (determined by the state), they are exempt from registering in that state.

Nonprofit Fundraising Laws

Donation Receipts

Donation receipts are required for single donations of $250 or greater. They can be sent as emails or letters, but they must be received by January 31st of the year following the donation.

They are also required if a donor received goods or services in exchange for a single donation greater than $75.

Abstain from Political Fundraising

Nonprofits cannot take part in “electioneering.” This means they are prohibited from doing anything to impact someone’s chances of winning (or losing) an election for public office.

If an organization participates in electioneering, they could have their 501(c)(3) status revoked by the state.

Additional Fundraising Resources

How to Ask for Donations

How to ask for donations

We get it; asking for donations can be tough.

But don’t worry! We’ve got your back with our tips and tricks for asking for donations. Check them out!

Fundraising Best Practices

Fundraising best practices

Don’t start fundraising without a little help.

Read through our fundraising best practices to make sure that you’re starting your efforts off on the right foot.

Fundraising Software

Types of fundraising software

It’s hard to raise money without software.

Fundly has listed out the different types of fundraising software that your nonprofit needs to succeed!

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