The BIG List of Fundraising Methods
There are many ways to raise money. Most charities use a mixture of methods. It’s always good to diversify, but you must balance this with being focused. Trying 10 different ways of bringing in money might mean you are sacrificing quality or strategy. Either way, I wanted to provide a list of the “big buckets” of fundraising methods used by nonprofits and other organizations as a way to stimulate your own creativity. Hopefully, this list will give you tons of ideas to kickstart your fundraising.
Remember, at Mind the Gap Consulting, we aim for our tools to be simple yet powerful. They are not exhaustive and don’t claim to be. So, of course, there is more complexity to this list below, but we don’t think you want a book; we think you want the “short and sweet” and that you can decide if you want to go deeper on any of these tactics. Here you go.
Events - Events can be online or in person. There is tremendous diversity in this realm. Any time you get people together for the purpose of raising money, it’s an event – even if the details change. For all events, delegating makes it easier to raise funds and empower others. The typical way of doing this is by using a host committee.
· House parties – I love these. Super simple. Ideally, a board member, volunteer, or someone else who really loves your work (or you) will agree to lead these. The host creates the list of invitees who would be new contacts for the charity. The host is responsible for sending out the invites and choosing a venue (their home, the home of a friend, or even a public library, park, or bar). Yes, I know these are not all houses, but the idea is that it’s on the turf you choose making it intimate and personal. The host should arrange to have the venue cleaned and provide food and beverages. The program, the name tag/sign in lists, and follow up are all the responsibility of the charity/cause. There are variations on this of course, but this is a standard template. These events have minimal cost, usually perform well, and are “high touch” events where you get quality interaction with potential supporters. Typically, the nonprofit just shows up, speaks, and makes the pitch. (Helping out the host is appreciated of course). Sometimes the speaker or the home is the star of the show!
· Galas – These are typically large affairs that include a program and seated dinner. Normally, there are tickets or seats that are sold for varying prices with varying levels of access. These take a lot of work, but people enjoy them. It is easy to fool yourself with these events and believe your fundraising is worth the cost. Monitor your numbers carefully and work towards year over year improved performance. Events of this size involve more complicated registration, insurance, AV/sound needs, parking, security and much more. If you go this route, talk to a pro!
· Cocktail – These events are typically still nicer events at nicer venues, but there is no seated, plated dinner. There may be some seating, but normally the event is 2-3 hours (instead of 5 for a gala) and there is a shorter program.
· Virtual events - These have a mixed reputation. You can invite people to a “non-event” to save money, encouraging people to send money that normally would have gone to event costs. You can do an internet search for examples. A virtual event could also be a national conference call with a celebrity or elected official.
· Walk/run/team-sponsored – Marathon-style events where people move from one place to another (walk, bike, run, boat) and get pledges from others are very popular. There are companies that produce these events and any charity can join with their participants. You can get sponsorships from local or big companies and you distribute the fundraising burden to hundreds of volunteers.
· Donor appreciation – These events are typically free and are designed for current (or perhaps lapsed) donors just to bring people together, hear about your impact, and also explain your plans for the future. Usually you don’t make a pitch, but clever fundraisers sneak in a special exclusive way to be a part of a new initiative or move people into “sustainer” status.
· Donor cultivation – Donor cultivation events are typically free. People close to your organization are encouraged to invite people to learn more about the organization. Normally, this event has a call to action. It could be to donate to the annual fund or to a very specific project, or to volunteer or join some exciting new project. The end game is to get them as monthly sustainers or as major donors.
· Special events – This is a catch-all. Special events are not annual. You can throw these for no particular reason, and they can be free or for a fee. This could be a “meet and greet” the opening day of a conference or on the anniversary of a milestone. There are a million reasons to throw a special event, but they are distinct from galas and house parties. Be clear on your goals for the event.
Grants – Some organizations will choose to seek out foundation and corporate grants. Grants tend to be larger so you need fewer of them, and they tend to imply you can come back for another grant in the future. But organizations can become reliant on this funding source. Also, many grants don’t cover your general operations (overhead), and organizations also find themselves shifting what they do to accommodate a funder. Grants can be a headache and focused on “vanity” metrics.
· Prospecting – I want to lift up prospecting as a distinct activity that powers a lot of fundraising. I mention it because it is a great task for volunteers and board members. Prospecting is research. There are tools and resources (free and fee-based) to help you research which foundations and major donors may fund your work. Wealth Engine, Relationship Science, GuideStar, and the Foundation Directory are all great options as well as your favorite search engine online.
· Foundation grants – In order to secure grants from foundations, it helps to have a clear mission, a case for support, and well-thought-out programs that you can evaluate for effectiveness. You must be patient too because some grant cycles take months or even a year. My advice is to keep stock language that you can use for every proposal, as well as standard attachments for when they are requested. Do your research to make sure they fund what you do, but also don’t be afraid to make a strong case for why they may want to consider supporting your work, even if it isn’t a perfect fit. Many times, grants are approved because of relationships, not because of the best proposal.
· Government grants – Government grants tend to be larger. It is very common for government funded organizations to continue that funding for years. These grants come with a lot of complexity, compliance, and even scrutiny so many organizations avoid them. But if you offer direct services to people, you should explore this option.
· Corporate grants – Sometimes corporations or corporate foundations offer “grants.” Sometimes these are actually just gifts that don’t operate like traditional grants. Sometimes these grants come from the marketing budget of a company, so the company is interested in getting good publicity for the gift, which traditional foundations are less focused on.
Digital - Digital fundraising is dramatically increasing in importance. There is too much information on this topic to cover exhaustively, but I will list some examples:
· Website - The website is the most important asset you have online because it is one of the first places someone will go to learn more about you before donating. While you have them there, create as little friction as possible in making a gift. Think about the user experience (UX is a thing!) so that what your donors want is what you are actually giving them.
· Email - A lot of the donations you get from your website or at other locations will be driven by email. Email is still king in many ways. Invest in good donor software and a great CRM so you can segment your list, track engagement levels, and tailor communications based on interests. For small organizations, you may not have the capacity to be this sophisticated but email should be playing a role in digital fundraising.
For more information on how to skyrocket your email list, go here.
· Social media - Most organizations are not raising a lot of money on social media, but it can help. Facebook fundraisers have really cracked the code. Watch Instagram for new functionality in 2019 and 2020.
· Crowdfunding - Platforms like gofundme.com and others are very popular and well-trusted. Consider using this strategy for one-time campaigns, efforts, or high-profile initiatives.
· Facebook fundraisers - Ask all members to choose your organization for their birthday fundraiser on Facebook (Facebook prompts everyone to run a fundraiser on their birthday).
For a free handout and webinar on how to do this, go here.
· Giving Tuesday - This occurs on the Tuesday after Thanksgiving where you throw all your digital efforts at your supporters while they are feeling generous because of the holiday spirit.
· Celebrity challenge – companies like Omaze pair celebrities with charities for “experiences.” The celebrity may give away tickets to a concert, a backstage tour, or something cool in exchange for donations. Each donation is an entry into the contest to win 1-3 prizes. (Facebook, Giving Tuesday) Companies like Omaze run online contests to win an “experience” with a celebrity.
· Amazon - Amazon Smile doesn’t bring in a lot of money for most organizations, but it isn’t that difficult to spread the word to encourage its use. Consider marketing this solution to your most ardent supporters.
· Google - Google gives away free ads, software, and even has a daily giving app. Check out Google for Nonprofits to learn more.
(*While we are talking about digital, make sure you check out IdealWare, TechSoup, and Nonprofit Technology Education Network for more.)
Mail – Fundraising through the mail can be a great way to fundraise but it can also be time-consuming and complicated. In order to be effective, you will need a regularly updated and “cleaned” list of people and their addresses. Missing information in your list greatly damages your mail program. There are ways to keep your list “clean” throughout the year by matching it against the National Change of Address database or various other list enhancement programs. Some printers and “mail houses” can help you get started. You should take great care year-round to ensure that every bit of information typed into your donor database is accurate, typo-free, and cleaned. Bad data, outdated information, typos, wrong prefixes, and more are a headache.
· Direct mail – Direct mail is sometimes considered to be different than membership mail. Direct mail tends to focus on lists you bought, swapped, or acquired when another entity went out of business. Essentially, this list is “cold” and may not know your organization at all. It requires a very particular strategy and there are consultants who can help you.
· Membership mail – This is the traditional program where you send mail to people who already know your organization somehow and you have their mailing address. It is important if you have a mail program to be clear about why you are using mail and what your goals are. Mail can be used for renewing donors, getting new donors, getting additional gifts, building toward your annual fund, getting members, etc.
In-kind – In-kind fundraising is not for money, but for stuff that is worth money. The best strategy for in-kind fundraising is to look at your organizational budget expense line items. Trying to get software, printing, travel (miles or vouchers), or other things donated saves money and is the same as fundraising. Some board members love this. If you can get consultants or office space donated, that is a big deal.
· Auction items – Live auctions and silent auctions at events are normally filled with items or gift certificates that were donated in-kind and can be used to raise money. Some organizations even host free events with the hope that the silent auction is the money maker. If you have a big crowd, the hope is that the silent auction will perform well. Know your audience and get quality, interesting, and fun things that people really want.
· Large organizational expenses – Mentioned above, if you can get big-ticket items donated, like a building, office space, or printing services, then try this. Some organizations produce wish lists in their newsletter, website or in their mail program letting people know what things they are looking for. It could be office furniture, coffee, or software.
· Items to be liquidated - Be careful with this too. Some organizations accept things that will immediately be sold like cars, boats, stock, or insurance policies. Getting a car may seem great but now you have to have it insured, allow people to test drive it, and you have to market it for sale. This can be a hassle for small organizations. Talk to your local community foundation about seeing if they can help liquidate the gift.
· Things you don’t need – It is tempting to take anything that is donated, but don’t do this. You should create a gift acceptance policy so your staff knows that time shares or exotic animals won’t be accepted. Also, you don’t want to take gifts from entities that work against your mission.
Workplace giving – There are many workplace giving programs like the United Way that allow employees of large employers to make donations to your charity through payroll deductions. Many companies have their own programs and there are many alternatives to the United Way. You should inquire about these because sometimes you must apply and there may be ways to get “promoted” and seen above other charities.
Individual donors – Cultivating individual donors involves many strategies as you will see below. Although foundations tend to give bigger gifts, a majority of your attention should be focused on individuals because that is where your power comes from and also where nearly all your other funding will originate from (events, mail, etc.). It is individual people that will eventually connect you to foundations, companies and other sources of revenue.
· Membership – Membership can mean a few different things and the term has legal implications. Membership organizations, depending on your state and bylaws, may have to give members something specific, like voting rights for the board, or other privileges. Talk to an attorney, but you may want to refer to your donors as “donors” or “supporters.” Speaking in the broadest terms when I use membership here, I mean individual non-major donors. You can build your membership through a mail program, online, joint fundraising efforts, contests, events or other means. Once you acquire a member, you should assume you will lose a good number of them to attrition, lack of ongoing interest, or because they move. Organizations spend a lot of time trying to acquire or retain members. Membership sometimes has tiers and with higher tiers comes higher privileges. Organizations have to decide internally how much access money can get you and if that leads to your organizations underserving low-wealth supporters.
· Sustainer program - A sustainer program is very popular and very effective and involves getting people to give regularly, usually monthly. Some donors need reminders to send in their gifts, but if you are lucky you can move all your donors to a monthly system of paying on their credit cards or through bank withdrawals. The benefit of these programs is that you spend fewer resources on renewals and lapsed members and have predictable revenue. Some organizations give one-time or ongoing perks to people who sign up as sustainers and some sustainer programs have names. Some groups give a pin, early access to events, etc. The value of a sustainer program saves tons of time and money on getting people to renew. For this reason, organizations spend a lot of time offering perks and promoting this form of giving.
· Annual fund – An annual fund is a short-hand expression for the money you must raise every year for core operations of the organization and your programs. Annual funds are for ongoing work. Boiling all your organization’s expected expenses into something called “The Annual Fund” makes it feel like a campaign to raise a very particular amount and all membership, events, and other activities can be aimed at reaching the annual fund. Essentially, it is mostly about framing the individual donor program in a particular way.
· Phone canvassing/telemarketing – Just like using mail to communicate directly with donors where they’re at, telemarketing can involve paid or volunteer callers to call members for renewals, to upgrade them to major donors, to do a one-time campaign solicitation, or to engage lapsed donors. I would not recommend a telemarketing program for “cold” lists or nondonors, but if you have evidence that the people on your list do donate to causes just like yours, you may want to experiment. Normally, the phone program comes along with a mail program so the person gets two touches close together. Consultants and firms can help you set up this program. There is great technology that can make this fun.
· In-person canvassing – Very few organizations do this in an ongoing and great way, but it can have real power. Canvassing door-to-door can be haphazard or highly strategic. For example, if your neighborhood was hit by a bad weather event or a school shooting, going door-to-door to help families that have been affected can literally be as simple as walking, knocking, asking, and finding out how to take donations. Normally, a canvass is far more strategic. Asking for money face-to-face has a very high “yes” rate and the average gift size is bigger too. Having a clear campaign with professional materials, a recognizable organization/cause, and a thoughtfully crafted walk-list is essentially how to not waste time or money on a canvass. Some organizations are superior at canvassing and let other charities hire them to canvass, like the PIRGs. This tactic is very grassroots and can be used for local or national organizations. The benefit of being at each door is that you get more time with each person so you can conduct surveys, record information about your conversations, and leave tailored literature based on language or interests. Canvassers need quality training and monitoring and a system for dealing with donations at the door.
· Giving circles – Giving circles are temporary or permanent efforts made by a group of volunteers to raise money for a very specific goal. An example would be 50 mothers in suburban Detroit pledging to raise $50K each year for a local breast cancer organization’s home visitation program. These are very popular and can yield much more for the organization than volunteers and donations; you gain future leaders and current ambassadors for the organization. All these volunteers are essentially testing the organizational pitch and this feedback is valuable data.
· Phone tree – Phone trees are a bit outdated, but they are still used. This is a delegation model of fundraising where everyone responsible for fundraising is given a list to contact by phone. Everyone who is reached by that phone call who donates then calls additional pre-determined individuals to ask for money. Imagine 10 board members of XYZ organization carving up a donor list of 200. Each board member calls 10 people and then those ten people are asked to each call a few to ask for money. This system is more likely used for small community projects like a Rotary Club or soccer club annual banquet.
· Sell stuff – Organizations can sell things to make money. You may own things you want to sell or your supporters may be willing to give you things to see. This could literally be an annual yard sale or an annual online store. You can sell art, knick-knacks, or even “memberships” or tickets to your annual gala at a discount for buying early. Be careful of unrelated business income tax (UBIT) if the income is not related to your mission.
· Friend-to-friend cards – Similar to a phone tree or giving circle, friend to friend cards are store bought or preprinted postcards or greeting cards that are handwritten by your evangelists (hardcore true believers) and sent to friends, neighbors, or even lapsed donors of the organization.
· Peer-to-peer – Like crowdfunding, these are powerful because people are more likely to donate to a cause if someone they know is asking instead of a stranger through an e-blast. Facebook Fundraisers are powerful examples because people using this tool are inviting their own friends on the platform and then posting regularly to their notifications. There are text-message platforms for this too.
Campaigns – Campaigns are efforts that are unique to normal program or fundraising efforts. Normally a campaign has a start and end date (thus some urgency and excitement) and a clear goal. For programs, offering food at a shelter is not a campaign. A three-month effort to get city council to pass an increase in funding for soup kitchens is a campaign. In fundraising, a campaign is the same. Annual campaigns can happen every year (usually based on the organization’s fiscal year) and end when the number of dollars or donors is met.
· Capital campaigns – are time limited to a few years and are designed to raise enough money to buy, build, or fix equipment or a building. Normally you want to have 30% of your campaign “committed” before even starting.
· Corporate campaigns – are designed to recruit a certain number of dollars or corporate sponsors to the organization.
· Crowdfunding campaigns (or peer-to-peer) - are time-limited efforts to hit a financial goal. They cannot go on forever. These usually end when the goal is met or when steam runs out of the effort.
In memoriam – Some organizations regularly notify their supporters that one way to support the organization is by encouraging charity, not consumption, when someone dies. For many people, it is way more practical and emotionally gratifying to raise thousands of dollars for a new park than to get flowers, food, or other gifts after someone dies. Tell your donors throughout the year to think of your organization and to include on your website “Donation is made in honor of…” or “Donation is made in memory of…” with the option to make the donation anonymously or with their name posted.
Fee for service - Fee for service (earned income) fundraising is an enormous area of untapped opportunity. Some examples are Goodwill stores, Girl Scout Cookies, and AAA memberships. There are countless ways that your organization can raise money in an ongoing or temporary way. Be careful of UBIT (mentioned above).
· Sell courses - Does your nonprofit have talent and expertise inside that can be turned into an online course? It is easier than you think. Check out Udemy or Teachable for platforms or you can host paid content on your own site.
· List rental – is where you work with a list broker and make money throughout the year on leasing or selling your list to other businesses or nonprofits.
· Consulting - Is there a talent or expertise in your organization that you can charge for as a service? For example, can businesses or nonprofits subscribe to your charity monthly or pay for consulting services, training, program evaluation, board training, public speaking, or diversity training?
· Certification - Can you develop a certification program so nonprofits can pay to get credit for high standards or for having gone through a training institution you created?
Telethon – These are rare now, but local public television is famous for doing local telethons where people are exposed to great programming while solicitations are woven into the programming. For added drama, there is normally a visible group of people on screen “ready to take your call.” Get creative with this or update it for modern times. For example, broadcast the State of the Union from Facebook live and ask your people to call or text in a donation every time the word “freedom” is used or every time there is bi-partisan applause. Or consider a live-stream on Facebook or some other platform all afternoon during a community event where you routinely ask people for money. Donors can call or click to donate.
Planned gifts - Planned giving is something normally saved for your best major donor evangelists, but I believe you should be telling all supporters over 50 about the option. Leaving wealth (insurance, money, investments, stock, art, etc.) to a charity in a person’s will can be a powerful way to raise major dollars. There are fancy tax-related tricks in this form of fundraising (just like foundations and donor-advised funds), so consider speaking to a CPA or tax attorney if you want to launch this program to effectively tell donors about the benefits.
Major gifts - Major gifts should be a huge part of your fundraising. It is low cost, high yield, and has a high “yes” rate. Things to consider:
· Define - You will want to establish what constitutes a major donor ($250 in cumulative gifts in a 12-month window?).
· Special perks - You will want to decide if major donors get special privileges or perks. This is largely not controversial, but your organization may have a problem giving those with wealth special perks. Think carefully about things like “early access,” better seats, or exclusive access to speakers. Try balancing making major donors feel special while ensuring that your commitment to the people you serve and other stakeholders isn’t sacrificed in the name of donor cultivation. Some groups record the keynote speeches at ticketed events, so you can later host them on your website.
· Donor levels - You will want to create “donor circles” or “donor levels.” The goal is to move donors higher and higher on these levels. Giving levels provides structure so donors and the organization are thinking about the future, momentum, and donor commitment. Moving someone from a “bronze” level to a “platinum” level plays to how people want to feel about themselves (hint: that their gifts matter).
· Extra care - Consider spending a little more time cultivating, stewarding, and appreciating your major donors. You also want to contact them at least three times for every one time you make a solicitation.
· Naming rights - One amazing way to get a donor to pitch in more is by providing naming rights. Naming an award, a scholarship, or a wing of a building after a donor can be a powerful way to invite someone to leave a legacy with your organization.
We know there are many more ways to fundraise, but these are the main ones we wanted to share. This tool may be expanded upon in the future, but for now, explore these and pick a few you want to get really good at.