APF

Fundraising as a source for generating income is a key and complex activity of foundations. It’s the lifeblood of charitable organizations and can serve as a way to raise awareness of a cause and drum up interest among donors. The principle is the same in not-for-profit activities as in the profit sector: The objectives are to generate income, maintain and create jobs and create value for the society. The ‘only’ difference is that in non-profit organisations, the net benefit (donations and other income) has to be distributed to and invested in beneficiaries and cannot be given back to the donors or owners as it is non-philanthropic sectors through aspects like dividends for shareholders.

In relation to foundation funding, there are three main types of charity organisations in general, and foundations specifically – Giving Foundations have a large foundation capital either in the form of a legacy given as an endowment fund to the foundation or as a mixture of such a foundation capital and additional yearly income from foundation activities such as business. Giving foundations use the annual net benefit of the capital and additional revenue for project support of the own organisation or donated to other organisations. Their income heavily depends on the financial market and on business achievements. Since the 2008 financial crises, many foundations continue to suffer from decreasing net income and have had to cut their donations and own infrastructure. These foundations are either relatively unknown to the public since they do not need to publicly fundraise nor market, or—like many foundations in the last ten years—become known through their public invitation to submit funding support requests.

Receiving Foundations on the other hand usually have limited foundation capital, usually the minimum amount that is required by law of the state where the foundation has its legal registration(e.g. in Switzerland CHF 50,000). A key part of their activities is fundraising: collecting funds from various sources for annual expenses, projects and administration, and to build reserves for sustainable development. Their income heavily depends on their fundraising skills, motivations and the economic situation in the donor areas and sectors. Typically, they are well known in the public because they have to publicly fundraise.

There are many options when it comes to raising money for a non-profit and the fundraising channels and methods are very broad, however, these are some of the main types. As you review these types of fundraising — and the different ideas behind how to raise money within both categories — don’t be afraid to combine some of the methods, or use the multi-channel fundraising approach.

1. Public Campaigns: Larger organisations embark on a large national or regional fundraising campaign annually. For instance,.   large organizations will have a fundraising week with public adverts, media events, mailings  of donation information to households, phone campaigns with direct calls etc. In many countries, public radio and television channels offer public campaigns  especially around national emergencies such as national disasters and disease outbreaks. These public campaigns generate donations through their partner institutions.
2. Websites: The donation button on the website of the foundation is a necessity, but it normally does not create substantial donations as donors often want more specific information before donating. Websites with fundraising platforms for various organisations are more prevalent some contexts than others such as the Anglo-Saxon world rather than in mainland Europe.
3. Direct Mailings: Emails and postal mailings addressed to the members of an organisation or to selected addresses are a good, targeted way of fundraising. Categories of addresses are distinguished: regular donors are ‘hot’ addresses, random, rare donors are ‘warm’ addresses and addresses of persons whom are not yet to donate are called ‘cold’ addresses. The ‘warmer’, the better the return of donations.
4. Crowd Funding: Crowd funding platforms allow individuals or institutions to fundraise for a specific project, for a defined target amount and during a limited time period. In emotionally touching projects like a sick child it can be very successful, in other cases it is a failure. Transparency of reporting the use of funds in private crowd funding is often a challenge and does not always meet the standards of institutional fundraising. However, crowd funding is also used by public media channels or social media with a list of projects.
5. Direct Contacts: Personal contacts within families and, neighbourhoods or even door-to-door collections are still an effective way of fundraising, but needs volunteers and some courage.
6. Collection in Events: Worldwide, religious events such as the collection in Christian Sunday worship, Muslim Friday prayer, and in Hindu or Buddhist temple offerings utilize this way of donations . Other fundraising events are benefit concerts, sport events, running (children get an amount per donor per km they run) etc.
7. Regular Transfer (debit procedures): Donors who are committed to an organisation spend regularly, e.g. once per month, an amount per automatic debit procedure from their bank account.
8. Applications to Institutions: This method requires individual applications to institutions such as foundations, governmental agencies/state departments, companies and their foundations, and multilateral institutions in order to receive donations. The applications are either proactive or as an answer to a call for application by the respective institution.
9. Intermediaries, especially financial institutions: Banks and wealth managers influence the investment and also donation policies and decisions of their clients. A personal contact or a flyer in the hand of a wealth manager can motivate her/him to recommend a project or a foundation for a donation. Aged persons sometimes ask lawyers, pastors and notaries to make suggestions for legacies to philanthropic institutions.
10. Directories: Being listed in directories of foundations, placing adverts in such directories are mainly ‘branding marketing’ in order to make an organisation known.
11. Media presence: presence of an organisation in the media by interviews, reports about projects, advocacy, petitions, public controversies, social media messages such as tweets and Facebook groups are important instruments to make an organization known and create the foundation for donations.

Personalities: Having a well-known personality as president, Board member or director of an organization or a movie or sport star as special ‘ambassador’, increases visibility and credibility of an organization as basis for donations.