To run a successful campaign, a non-government organization (NGO) needs funds — lots of it.
However, raising money for your favorite charity or advocacy will rely massively on your ability to source it from various places.
At present, a large majority of NGOs are getting their funds through traditional methods — from going house-to-house to charity events in their respective areas.
But with the increasing number of non-profit groups all over the world, sourcing money via the traditional means, however lucrative it seems, is no longer viable. Many NGOs are learning it the hard way to the point that organizations are forced to close shop because of the lack of funding.
Sourcing funds should be mixed to enable your organization to continue operations amid denser competition. Here are some fundraising essentials that every NGO should know:
1. Crowdfunding online
Definitely a hit on social media sites like Facebook, online fundraising is a powerful tool for any NGO. With millions of followers, a viral social media post could turn a simple video to hundreds of thousands to millions of dollars in donation. Plus, it is free.
However, more and more groups are willing to inject money in crowdfunding platforms that focus on spreading and making viral fundraisers’ narrative to an extent that social media alone cannot afford to match. This, in exchange for a small share of each donation transaction.
The trend has become so popular that crowdfunding is estimated to become a $90 billion to $96 billion industry, according to the National Council of Nonprofits.
2. Corporate benefactors
In 2010 alone, corporate support for non-profit groups was pegged at over $15 billion, ranging from cold hard cash to giveaways to grants and investments, according to fundforNGOs. Big companies are a good place to start looking for funds because they have the dispensable assets that can be coursed through their corporate social responsibility funds.
However, it is advisable that groups should seek companies which they jive with. This way, you narrow down the broad competition that involves non-profit organizations fighting for the private sector’s appeal to get funds.
The fundforNGOs report added that some 65 percent of Fortune 500 companies offer so-called “gift matching programs” while 40 percent have fundraising and volunteer programs that employees can engage in.
Although stock investing may be difficult for some, a tip from most money managers is putting your money on tried and tested publicly listed companies or government-controlled bonds. This can help you earn money. Always go for the so-called blue-chip companies that give regular dividends.
An important note for groups that invest in the stocks is to assess the ethical limitations of their stock selections.
Stock market investing is a legal revenue stream for non-profit groups who are bound by a set of regulatory laws to maintain their exemption status from taxes. However, there are certain rules that NGOs should comply with in order to maintain the legitimacy of the money they generate. Among these is ensuring that the stocks they invest in do not benefit directors or officers of the group, in any way.
According to Pocket Sense, such practice may give rise to a certain degree of conflict of interest and insider trading should they be major shareholders of a publicly-traded firm in which the profit group is investing.
NGOs are also restricted from transferring proceeds to directors. The philosophy behind this is that directors might hide assets or transactions under the name of the NGO to evade taxes, a violation of federal law.
Many of the NGOs are receiving donations in kind. Many would think that this is a logistical nightmare, but wise non-profit groups are actually making a massive amount of money by reselling items they receive.
E-commerce platform Shopify said that more non-profit organizations are adapting their services to accept donations, resell items to raise funds and promote awareness of their cause.
Reselling can also involve buying products at a low price and selling them a little higher while still giving great deals to your customers. In doing this, NGOs should think over the best product to sell as this is a major driver for customers, according to Fundraiser Help.
Some products Fundraiser Help suggested for reselling are restaurant gift cards, coupon books, Spices & Seasonings, Fresh Fruit and tote bags, among others.
Giving back to your regular donors would come a long way. They will be appreciated for their deeds and may be motivated to help you build a better NGO brand name that would help you sustain operations in the years to come. This is pointed out by Michael Nilsen, vice president of public policy for the Association of Fundraising Professionals.
“It’s about the charity stewarding the donors and keeping them informed and letting them see the impact of their giving,” Nilsen was quoted in Money.
Money shared some of its favorite donations perks granted to donors of at least $1,000, which are being adopted by the Tampa Museum of Art and the Zoo Miami, among others. These rewards may come in the form of a tour that is not offered to the public.
6. Partnering with cause-driven firms
There are companies today that are motivated to help charities as they are driven to make a profit as a business. Although the two factors were not commonly known to be parallel with each other, some firms already adopt this business model. Exponential, Inc. (XPO²), a cause-related marketing firm founded by French-American entrepreneur Dom Einhorn, has proven that this approach can be sustainable so long as this applied in growing industries such as the impact investing market.
XPO² is developing and promoting a low-volume, high-quality NGO contribution platform. This comes at no cost to NGOs, and is on top of the free access to complete digital marketing, fundraising and e-commerce technologies that are granted to them.
Some of XPO²’s NGO partners include Save Vietnam’s Wildlife, Blue Mountain Humane Society, Friends of Nairobi National Park, Jim Nyamu (the Elephant Man), and Saigon Children and the Male Conservancy and Research Center Laikipia, among others.
The firm is planning to launch a rewards-based crowdfunding campaign. XPO² is also set to begin fundraising efforts on behalf of various nonprofit organizations. These efforts will be driven by a massive advertising push to get out various forms of content (video, text, picture, etc.) in front of as many people as possible.
The emergence of new fundraising solutions is, indeed, prompted by the looming need for more lucrative and attractive approaches. But no matter what investment strategy an NGO adopts to sustain its cause, it should be understood that the primary foundation to generate revenue lies in good governance and innovative methods, like those mentioned above.