Fundraising - Types

Types

Many non-profit organizations receive some annual funding from a financial endowment, which is a sum of money that is invested to generate an annual return. Although endowments may be created when a sizable gift is received from an individual or family, often as directed in a will upon the death of a family member, they more typically are the result of many gifts over time from a variety of sources.

Non-profit organizations also raise funds through competing for grant funding. Grants are offered by governmental units and private foundations/ charitable trusts to non-profit organizations for the benefit of all parties to the transaction.

A capital campaign is when fundraising is conducted to raise major sums for a building or endowment, and generally keep such funds separate from operating funds. These campaigns encourage donors to give more than they would normally give and tap donors, especially corporations and foundations who would not otherwise give. A capital campaign normally begins with a private phase before launching a public appeal.

Charitable giving by corporations is estimated to be $15.29 billion in 2010. This consists of corporate grants as well as matching gift and volunteer grants. 65% of Fortune 500 companies offer employee matching gift programs and 40% offer volunteer grant programs. These are charitable giving programs setup by corporations in which the company matches donations made by employees to eligible nonprofit organizations or provides grants to eligible nonprofit organizations as way to recognize and promote employee volunteerism.

Special events are another method of raising funds. These range from formal dinners to benefit concerts to walkathons. Events are used to increase visibility and support for an organization as well as raising funds. Events can feature activities for the group such as speakers, a dance, an outing or entertainment, to encourage group participation and giving. Events can also include fundraising methods such as a raffle or charity auction. Events often feature notable sponsors or honoree. Events often feature a charity "ad book" as a program guide for the event, but more importantly, as another fundraiser providing members, supporters and vendors to show their support of and to the group at the event by way of placing an ad-like page, 1/2 page, 1/4 page, stating or showing support. Events and their associated fundraisers can be a major source of a groups revenue, visibility and donor relations.

While fundraising often involves the donation of money as an out-right gift, money may also be generated by selling a product of some kind, also known as product fundraising. Girl Scouts of the USA are well known for selling cookies in order to generate funds. It is also common to see on-line impulse sales links to be accompanied by statements that a proportion of proceeds will be directed to a particular charitable foundation. Tax law may require differentiating between the cost of an item verses its gift value, such as a $100.00 per person dinner, for a $25.00 cost meal. Fundraising often involves recognition to the donor, such as naming rights or adding donors to an honor roll or other general recognition. Charity Ad Books are another form of donation for recognition, sponsorship or selling of ads often in an event related program or group directory.

When goods or professional services are donated to an organization rather than cash, this is called an in-kind gift.

A number of charities and non-profit organizations are increasingly using the internet as a means to raise funds; this practice is referred to as online fundraising. For example, the NSPCC operates a search engine which generates funds via Pay per click links, and Better The World operates tools allowing funds to be raised via members viewing ethical ads on a browser sidebar and/or blog widget. Save the Children's Dave Hartman wrote after the $1 Million Operation Sharecraft online campaign, "We may have reached our mark, but this is just the beginning of a new era of fundraising and using social media and digital technology to better the world."

Some of the most substantial fundraising efforts in the United States are conducted by colleges and universities. Commonly the fundraising, or "development" / "advancement," program, makes a distinction between annual fund appeals and major campaigns. Most institutions use professional development officers to conduct superior fundraising appeals for both the entire institution or individual colleges and departments. Examples of this include athletics and libraries.

The donor base (often called a file) for higher education includes alumni, parents, friends, private foundations, and corporations. Gifts of appreciated property are important components of such efforts because the tax advantage they confer on the donor encourages larger gifts. The process of soliciting appreciated assets is called planned giving.

The classic development program at institutions of higher learning include prospect identification, prospect research and verification of the prospect's viability, cultivation, solicitation, and finally stewardship, the latter being the process of keeping donors informed about how past support has been used.