In simple terms, fundraising is a way of raising money and other resources to support socially important projects. Resources include: goods, services, information or contact details of people. A fundraiser searches for sponsors. His or her task is to find investors and benefactors who are willing to invest money in advertising campaigns, charitable projects or ideas.
We explain the difference between fundraising and crowdfunding, in which areas fundraising can be used and how to attract investments in your project using examples of successful campaigns.
What is the difference between fundraising and crowdfunding?
Fundraising is underdeveloped in Canada. It is mostly used to develop non-profit projects.
For investments, businesses use crowdfunding. Crowdfunding is one way to collectively invest in a project. It implies a one-time attraction of investments and is considered a special case of fundraising.
We have found 4 main differences between fundraising and crowdfunding
Who is the investor?
In fundraising, you are looking for a person who is able to support your project or idea financially. It can be one person, several sponsors or even a bank. Crowdfunding is fundraising with a group of people, most likely ordinary people who are not in any way connected with investments or start-ups.
How is it done?
Crowdfunding requires preparation. You need to find an investor interested in the field of your project, present the project, to tell about the advantages and disadvantages of the idea. Crowdfunding can even be carried out to raise funds for your journey – if there is not enough money for a ticket. The main thing is that people like the cause.
Where do you do it?
Crowdfunding can be done offline as well – by looking for sponsors at events and launching advertising campaigns. And crowdfunding is mostly done online on special platforms.
What is it for?
For the development of noncommercial projects and socially significant goals. From business ideas and startups to personal needs: art projects, buying a house or a car, travel, funds for education and more.
With fundraising:
- Looking for new investors who are willing to invest;
- They work out a strategy of promotion of the company, taking into account the sphere of activity and peculiarities of the business;
- Attracting new partners;
- They communicate with regular sponsors to encourage them to make additional investments;
- Form a positive image of the company in society.
Types of Fundraising
Fundraising is conventionally divided into two categories:
- Internal. A fundraiser is an employee of a nonprofit organization. He works with an audience and attracts sponsors without the help of outside specialists;
- External. For fundraising, the company engages professionals.
Both are engaged in seeking funds for a specific project or to ensure the company’s stable operation.
What spheres does fundraising work in?
Fundraising is considered a universal solution that can be implemented in almost all spheres: politics, science, sports, culture, etc. It is suitable for organizations that do not have regular funding.
Culture
Fundraisers look for sponsors for maintaining galleries, theaters, and reading rooms. The proceeds are used to restore monuments and historical sites.
Unlike charity, fundraising is a mutually beneficial transaction between an investor and a cultural institution. For example, a business can sponsor objects as part of advertising. In this way the company forms a positive image and improves its reputation. Another example of fundraising in the cultural sphere is the Metropolitan Museum in the United States.
The museum’s staff in 2019 included more than 70 fundraisers who collect donations and charitable contributions from patrons.
Social
Fundraisers raise investments for people with financial hardships. Foundations raise money and then send it to those in need.
An example of fundraising: the joint action of Svyaznoy and the Life Line charitable foundation.
In the salons of cellular communications salesmen offered to take part in the “Red Nose – A Good Heart” campaign – to buy a clown’s nose. All the gained money “Svyaznoy” sent to the charity fund.
Policy
Fundraisers look for sponsors to fund a party or implement a particular cause. For example, for a candidate to run for office.
When the candidate is elected, the investor gets a share of influence – a seat in a government body or the support of an influential politician.
Science
Fundraisers help scientists and researchers find funding. They apply for government programs, approach patrons and sponsors, and look for community organizations that provide development grants.
A prime example of science fundraising is the ALS Ice Bucket Challenge. In 2014, they launched a campaign in the United States that told people about amyotrophic lateral sclerosis.
The campaign quickly spread across America and became a flash mob. People posted videos on social media of themselves dousing themselves with cold water.
Among them were famous people: Mark Zuckerberg, Bill Gates, Steven Spielberg, Lady Gaga, Britney Spears, George Bush and Oprah Winfrey.
The Challenge attracted an audience, celebrities had new companies, and the charity raised C$16 million.
Sports
Fundraisers raise funds from large companies and private investors to organize sporting events, promoting individual athletes or entire teams.
Alternatively, sports can also be used as a fundraiser for foundations, including those related to sports. The “Make!” platform can help with this.
Who can contribute funds?
Fundraisers raise funds from individuals and legal entities, including businesses, non-profit charities or foundations, and government agencies.
Depending on the terms of cooperation, all participants are divided into several categories:
- Investors – Investors are individuals or organizations. They invest money in order to receive profit – dividends.
- If dividends are not material – if they are invested in increase of brand awareness or reputation, they are called sponsors.
- Sponsors are individuals or companies – They are willing to invest money if they receive a benefit. The terms of cooperation are agreed upon by the parties in advance;
- Donors – participants who help the fundraiser gratuitously. Often foundations, corporations, banks, and individuals become donors;
- Patrons – individuals who voluntarily and gratuitously fund the fundraiser. They are essentially the same as donors. People donate significant amounts of money to support social projects in science, education, or culture;
- Grantmakers – companies, organizations, or individuals who fund a specific project or idea.
How to attract investment online?
Boxes and pamphlets on the streets do not work. Since 2018, the methods of attracting investment have changed. Organizations are using the Internet and social media.
Fundraisers do electronic mailings, raise funds through the website, publish articles in electronic publications, and use messengers and mobile applications.
Internet fundraising campaign
It is launched when it is necessary to raise money for a specific project:
Raising money for New Year’s gifts for children with Down syndrome – the “Farther into the Woods” project from the Love Syndrome Charitable Foundation. In 2019, the foundation raised C$59,000 in 1 month;
A monthly donation to a specific charity as part of the One Ruble a Day campaign. The sponsor chooses the amount they are willing to donate per day, but no more than 1 CAD. The campaign has attracted more than 100,000 people, who have donated C$527,450;
To raise funds through a fundraising campaign, you need to articulate a goal and come up with an idea.
Organizers of the Dobroshrift Project came up with a font that consisted of letters written by children with the disease. Within a day, the font had spread across the country. The organizers achieved such success because of a simple idea that was understandable to the audience.
Here are our tips:
- To promote online, create a website or a landing page with a recognizable image, a striking slogan and a donation button;
- Create a unique product that will appeal to the donor;
- Study donor and partner preferences and analyze their interests;
- When developing a fundraising campaign, consider the interests and requests of participants.
Volunteer Fundraising
It is not the nonprofit organization that raises the money, but the donors. They attract the attention of their subscribers and friends on social networks or blogs.
The Gift of Life Foundation has launched the Friends of the Gift of Life Foundation platform. Here people can create their own event or participate in someone else’s event. Users can chat online, participate in workshops, and play sports.
Volunteer fundraising is one of the easiest ways to support each other. Its purpose is to bring people together, create positive experiences, and motivate them to do good deeds.
Streams
Streaming is a type of volunteer fundraising. During an online broadcast, a donor accepts donations or rewards.
Social networks or special streaming platforms, such as Twitch, are used to launch streams.
If a donor raises money for a charity, the money is transferred to the organization’s account. You can’t send money to a plastic card.
Social Media
Social media, like the website, is a must for every charity. Users willingly participate in flash mobs and online events.
Study the interests of your target audience and come up with a concept. If the idea is interesting, a flash mob will attract the attention of many users.
Landings
The Perspectives, a charitable social organization, resorted to a landing page in the early days of the pandemic.
The landing page provides information about the work of the “Home Forever” project and has the opportunity to support the project.
Conclusion
Success depends on the organizers. Come up with an idea, show the importance of what you are doing in a clear and vivid way, and provide an opportunity to support your project.
Make up newsworthy causes and fundraisers to encourage people to get involved.