The main source of income for nonprofit organizations is donations. With them, organizations continue to carry on their mission, pay for overhead, and develop new projects. Regardless of the size of the nonprofit, fundraising is a very important and valuable process. This article will take a closer look at how nonprofit fundraising works.
What is nonprofit fundraising?
Nonprofit fundraising is collecting donations or voluntary funds through which companies can grow and develop by serving the public good. Individuals or entire businesses can participate in fundraising.
How can nonprofit organizations raise funds?
In this day and age of modern technology, there are endless ways in which nonprofits can connect with donors and form large-scale fundraising methods. Yet not so long ago, the process was much slower, through phone calls, letters, or face-to-face meetings. Now, nonprofits can raise funds through the following methods:
- Virtual fundraising.
You meet with your donors virtually, using Zoom or other online meeting apps. Which way the fundraising event takes place is up to the organization. Perhaps it will be some gala or maybe a simple quiz.
- Online fundraising
Online fundraising is done in a few clicks. First, you post an advertisement about your event and watch as donations pour into you.
Real events work so that guests reserve their seats and pay for tickets. The nonprofit members also determine the type of event, which can be a fair, a concert, and other types of entertainment. You can earn additional funds by holding different contests and raffles.
- Fundraising Auction
An auction operates in such a way that the donor gives money and, in return, receives something of value, some item or service.
- Fundraising among peers
Social media has opened up another way for nonprofits to raise funds. Peer-to-peer fundraising works by having people collect money from their peers and then donating the loan to the organization.
- Regular Fundraising
Regular fundraising is a type of fundraising when the donating is happening on a regular basis. That helps the organization to plan its budget in more detail.
There are many other ways, including commodity and major gift fundraising.
The main types of donation
The most common types and methods of donations are:
- Cash donations – The nonprofit must articulate specific rules for handling cash once it is received. And their donor must be sure to get a receipt for their contribution
- Cheques – operate the same way as the case with cash
- ACH – namely Automatic Check Clearinghouse. This method works by having the donor enter their current account information into your online payment processor, and this way, the donation amount will be deducted from their existing account
- Bank transfer – donors can donate an amount of money by transferring money from their bank card to the nonprofit’s account
- In-kind donations do not directly involve monetary donations but rather the donor’s time and services, such as volunteering or material goods that can be of use to the organization
- Goods – People can sell some goods and donate a portion of the money to the nonprofit organization. For-profit business owners often use this method
Meanwhile, nonprofits keep track of all these donations with special CRM solutions and financial software systems. They make it easy to create reports to share with everyone involved in the offering and plan new events.