The BIG List of Fundraising Methods
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 and give you ideas to kickstart your fundraising.
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 are a wide variety of events you can attempt. 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 events.
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 necessarily houses, but the idea is that it’s a smaller venue which makes it intimate and personal. The benefit of being in someone’s home is that it is cheaper and less complicated, and people love being in other people’s homes. Parking is typically easier too. The host should arrange to have the venue tidy and they should provide food and beverages. A charity may decide to pay for the food if the host simply cannot afford it or they have been incredibly generous with other details. Remember, all expenses eat away at net revenue.
The program, the name tag/sign-in lists, and follow up are all the responsibility of the charity, but if the host wants to help…great. 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, seats, or tables that are sold for varying prices with varying levels of benefits.
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 professional locally!
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. But since COVID-19, many organizations have really improvised and done well. A virtual event could also be a national conference call with a celebrity or elected official. It could be a training, or an “ask me anything” panel, or just coffee, cocktails and conversation with questions from the crowd.
Or, 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.
Free Board Webinar: Transform your board in 90 Days
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 responsibilities to hundreds of volunteers.Donor appreciation – These events are typically free and are designed for current (or perhaps recently 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 monthly “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 to donate to the annual fund or to a very specific project, or to volunteer or join some exciting new project. The goal is to create a low barrier to entry. 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. If they are free there should be a reason or a strategy.
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 there is a good likelihood you can come back for another grant in the future. But organizations can become too 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 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 also be patient, because some grant cycles take months or even a year.
My advice for making grant writing easier is to keep boilerplate language handy, maybe in one document, that you can use for every proposal, as well as standard attachments. Do your research to make sure the foundation you are applying to, actuallys funds what you do.
But 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. This level of persuasion is typically done person-to-person, not in a grant application.
Many times, grants are approved because of relationships, not because of the best proposal, best writing, or even the best programs.Government grants –Government grants tend to be larger. It is very common for government-funded organizations to continue that funding for years and years. These grants come with a lot of complexity, compliance, and 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. Once again, it helps to have relationships inside the corporation to get these grants, but it isn’t necessary.
Digital Fundraising
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 supporters are on your site, create as little “friction” (challenges) as possible in making a gift. Think about the user experience so that what your donors want is what you are actually giving them. Remember the clutter kills conversion.Email - A lot of the donations you get from your website or at other locations will be driven by email. In many ways, email is still king.
Invest in good donor management software and a great CRM so you can segment your list, track engagement behavior, 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.
Social media - Most organizations are not raising a lot of money on social media, but it can help. Facebook fundraisers (see below) have really cracked the code. Watch Instagram to see if their donation feature in “stories” takes off.
Crowdfunding - Platforms like GoFundMe and others are very popular and well-trusted. Consider using this strategy for one-time campaigns, efforts, or high-profile initiatives. It’s a trusted platform.
Facebook fundraisers - Facebook fundraisers have exploded and they are not slowing down. Not only can you raise money on your birthday, but you can also run them any time of year, and you can invite all your supporters to do the same. If you have the birthdays of your supporters, you can also ask them 15 days before their birthday to run one when prompted by Facebook, which happens 14 days before their birthday. Learn more below.
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. It is the largest day of giving all year.
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. You can even accept donations through Amazon’s Alexa now!
Google - Google gives away free ads, software (including Gsuite!), 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.)
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. You will need to think about design costs, printing costs and fees for bulk nonprofit rate permits.
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. A regular cleaning of your list can save you money and increase revenue.
Bad data, outdated information, typos, wrong prefixes, and more are a headache.
Direct mail – Direct mail is different than membership mail. Direct mail tends to focus on lists you bought, swapped, or even acquired when another entity went out of business.
Essentially, these kinds of lists are “cold” and the people on them may not know your organization at all. It requires a very particular strategy and there are consultants who can help you. Don’t expect the same results from a cold list (despite how large it is) that you can from your existing supporter list.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, converting people to sustainers, or directing them online, 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 and work to eliminate those costs first, before you start asking for in-kind things you don’t need. For example, if your staff doesn’t travel, asking for airline miles might not be that strategic. Here are ways to donate your miles!
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 option for satisfying their fundraising goals.
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. Some organizations do these online for a span of several days with a “doors closing” deadline to create urgency.Large organizational expenses –Mentioned above, try to get big-ticket items donated, like a building, office space, or printing services donated.
Some organizations produce wish lists in their newsletter, website, or in their mail program letting people know what items or expenses they need covered. It could be office furniture, coffee for volunteers, 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 timeshares or exotic animals won’t be accepted. It’s good to have a policy so that you are consistent and so that donors understand why they can’t give you a live chinchilla!
Also, you don’t want to take gifts from entities that work against your mission. If you are a health-focused organization, would you take money from a tobacco company? If not, why not?Creating a gift acceptance policy or guidelines is wise.
Workplace giving
There are many workplace giving programs like the one offered by 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 (for most nonprofits) 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. It’s important that your organization focus on a strategy to engage individuals.
Even most grants are approved by people inside with personal human relationships with someone at a nonprofit.
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” instead of members.
For the purposes of this blog post, when I use the term “members” I am referring to any individual who donates at any level, even if at your organization membership levels start at $25.
You can build your membership through a mail program, online campaigns, joint fundraising efforts, contests, events, or other means.
Once you “acquire” members, you should assume you will lose a good number of them to attrition. This can happen because of a lack of ongoing interest, because they move, or because they simply stop responding to your appeals because they are distracted.
Organizations spend a lot of time trying to acquire and retain members. Membership sometimes has tiers and with higher tiers comes more benefits.
Organizations have to decide internally how many benefits to give a donor for their contribution, and if that leads to your organization de-valuing 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.
It’s really a win-win for the donor too because they don’t have to bother with renewals or getting unwanted calls or mail.
The value of a sustainer program is incredible. 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 because it is simpler or because it helps you fundraise more clearly.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 of non-donors, but if you have evidence that the people on your list do donate to causes just like yours, you may want to experiment with a smaller phone program first.
Normally, the phone program is followed by a mail program so a person gets two “touches” close together.
Consultants can help you set up this program. There is great technology out there that can make this fun.In-person canvassing – Very few organizations do this in an ongoing and consistent 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 who have been affected can literally be as simple as walking, knocking, asking, and finding out how to accept donations. Normally, a canvass is fairly strategic and involves a standard script, walking lists, maps, and material on your clipboard.
Asking for money face-to-face has a very high “yes” rate and the average gift size is bigger too. (It’s also great exercise!)
Some organizations are superior at canvassing and let other charities hire them to canvass, like the PIRGs. Canvassing 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.
Canvassing at events, in crowds, on a busy street or at supermarkets involves a very different approach since people are normally on their way somewhere instead of stationary. Think through the dynamics before attempting any of these ways of building support or revenue.Giving circles – Giving circles are temporary or permanent efforts made by a group of volunteers to raise money for a very specific goal or program.
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 just new volunteers and donations; you gain future leaders and current ambassadors for your organization.
All these volunteers are essentially testing the organizational pitch. Getting feedback from these volunteers can yield valuable data for your other fundraising.Phone tree – Phone trees have a reputation for being 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.
Each person contacted by someone within the phone tree then reaches out to 5-10 other pre-determined people almost immediately and asked for money. Imagine 10 board members of XYZ organization carving up a donor list of 200.
This system is more likely used for small community projects like a Rotary Club or soccer club annual banquet. They are best when used on special occasions or only a few times a year.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 core volunteers or even clients 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 platform are inviting their own friends and then posting regularly so they’re friends receive notifications. There are text-message platforms for this too like Hustle and GetThru.
Campaigns
FundraisingCampaigns are unique efforts. Normally a campaign has a start and end date (thus some urgency and excitement) and a clear goal.
A three-month effort to raise money for a summer camp is a campaign. All political campaigns follow this logic too. They have clear goals, a start date, and an end date.
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 (usually less than 7) and are designed to raise enough money to buy, build, or fix assets or a building. Normally you want to have 30% of your campaign “committed” before even starting as a barometer that you can actually hit your goal.
Corporate campaigns – are designed to recruit a certain number of dollars or corporate sponsors to the organization in a fiscal year.
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. Some donor software comes with this option baked in.
Fee-for-service (Earned Income)
Fee for service (earned income) fundraising is an enormous area of untapped opportunity. Some examples are Goodwill stores, Girl Scout Cookies, Consumer Reports magazine and AAA memberships. There are countless ways that your organization can raise money in an ongoing or temporary way. Be careful of UBIT.
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 sell.
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. Talk with a CPA to stay compliant.
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 provide 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.Tools and tips to support all fundraising methods
In order to maximize your fundraising efforts, you should invest in creating a case for support. A case for support can also become the foundation of your pitch. Once you have a compelling case and pitch, you’ll raise more money at events, by mail, on your website, and in major donor asks.
Also, you’ll want to create other great materials, like an Annual Report and a Fundraising plan.
Make sure to be visual and be a good storyteller. Show the work; don’t just tell donors about the work
Use your most effective and most compelling arguments and anecdotes.
Use social proof (testimonials, reviews, endorsements, news stories) to show the effectiveness and popularity of your programs.
Although it’s important to point out the problems in society that you are tackling, its also important to show optimism and joy. People want to see that problems are solvable and that your organization has momentum. 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.
Focus on the benefits of your work, not just listing your programs and activities. A feature of a pencil is that it has 6 sides. The benefit is that it won’t roll off your desk. When explaining your work, describe how the world and individuals will be better off.
Use these creative metrics to describe your work.
