How Fundraising Works

How Fundraising Works

At its heart, fundraising for non-profit organisations means securing voluntary gifts of money as effectively and efficiently as possible. Fundraising is:

the right person
asking the right prospect
for the right gift
for the right program
at the right time
in the right way.

— Hank Rosso, Achieving Excellence in Fundraising (255)

It is no coincidence that when we rebranded our company in 2015 we chose the name AskRIGHT: getting all of these elements right is the core of good fundraising.

While the essential task is to get all the fundraising elements “right”, good fundraising practice can take a variety of forms:

  • personal asking, asking by phone, email, or letter
  • asking for one-off gifts, campaign pledges, or bequests
  • asking for small local causes or large international projects

What each of these scenarios have in common is that they are requests for philanthropy – free-will donations; perhaps induced by tax-deductibility, naming rights, or the hope of a lavish “thank you” – but nevertheless freely-given.

There are of course other fundraising methods, and some do not immediately evoke philanthropy. These methods are akin to commercial operations, except that they use the advantages of the non-profit organisation (special tax status, regulations, or public interest) to create a situation in which a surplus above expenses passes to the non-profit organisation. These methods include sales of second-hand goods, raffles and lotteries, fetes, in-kind collections, sponsored events, and by lending name and reputation to for-profit enterprises through cross-marketing arrangements.

To get fundraising working well for your organisation, you need to consider the fundamentals.

Communicate the Reason

There are some non-profit organisations whose presence is so ubiquitous and the brand is so strong that you can just raise money without having to give a reason. In most places these might include charities such as The Salvation Army, the International Red Cross, and the larger children’s hospitals. Other organisations, when seeking donations, need to present a compelling case to the donor. A proven format for a case for support is:

  • The need (the problem being addressed)
  • The solution (how the need will be met)
  • The future (describe the situation when the need is meet)
  • The qualifications of your organisation to provide the solution to the need
  • The total cost of the solution and how much of that you are asking this prospect for today
  • Other reasons the person might say yes (naming, recognition, impact on other conditions)

Choose Fundraising Activities That Suit Your Organisation

Fundraising works best when someone who believes in a cause gives to it, and asks others known to them to do so. However, the thought of giving and personally asking others for money makes most people anxious so non-profit organisations develop ways of fundraising that take away the personal challenge of giving and asking others. Some charities outsource the asking role to for-profit organisations who hire teams of people to make phone calls to sell merchandise, raffle tickets, or seek donations; or to sign-up credit-card donations on city streets. Sometimes charities recruit people to have their hobby or vacation paid for by sponsors with a portion going to charity. 

Each kind of fundraising should raise net-revenue for the non-profit organisation at a return on investment appropriate for the type of fundraising. The kinds of fundraising activities should reflect the assets of the organisation—do you have staff, volunteers, capital to invest, etc.?

Of course effective fundraising raises money, but it does more than that. Fundraising is about the message. How you raise funds sends a message to the community. Fundraising should carry the organisation’s values to everyone it touches. Vinnies’ CEO Sleepout is a great example of this. By participating in the fundraising, CEOs (and by extension their financial sponsors) gain greater empathy for the homeless of our community. Caring organisations should not have aggressive fundraising techniques. Knowledge organisations should not carry falsehoods in the promotional materials. Health organisations should not dispense unhealthy products at fundraising events.

Make Fundraising Work for You

What fundraising works best for a particular organisation will vary according to their situation, but the principles of fundraising are near-universal, and can be adapted to develop a sound fundraising plan appropriate to each non-profit organisation. Understanding how fundraising works can help make your fundraising more efficient and more effective.

If you have any questions about how fundraising works, please contact AskRIGHT.

Find AskRIGHT in your city, as we help Fundraising Companies in Sydney, Melbourne, Brisbane, Perth, Auckland, Christchurch, Gold Coast, and Mackay.

– By Principal Consultant, Dr Daniel McDiarmid

Dr Daniel McDiarmid

Dr Daniel McDiarmid

Principal Consultant at AskRIGHT
Daniel is a highly experienced and innovative fundraising professional with more than 30 years of success raising funds for higher education, research, religious and other organisations in Australia and New Zealand.

To find out how Daniel can help your organisation, contact d.mcdiarmid@AskRIGHT.com.
Dr Daniel McDiarmid

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