Six Fundraising Approaches New Charities Should Avoid
Starting and running a new charities organization can be both challenging and expensive. Convincing people to support an organization that is just getting off the ground or doesn’t yet exist can be an uphill battle. While there are various fundraising strategies to consider, it’s essential to be aware of what not to do. In this article, we’ll explore six common fundraising methods that, when used alone or excessively, can pose challenges for new charities organizations.
Introduction
Funding a new charity organization can be a daunting task. People don’t typically rush to donate to every charities they come across, especially those that are new or just starting out. Fundraising ideas and strategies may come from various sources, but not all of them are advisable, particularly if you rely solely on one method.
Here are six fundraising approaches that, if overemphasized or used exclusively, can present challenges for new charities.
1. Grants
Grants can be a valuable means of generating revenue, but they may not be the most suitable option for new charities. Many foundations that offer grants prefer organizations with at least three years of operational experience, allowing them to demonstrate the effectiveness of their programs. Even with three years of program data, relying solely on grants to sustain your entire organization is often ill-advised.
Foundations vary in their focus areas, which may be limited to specific program types, demographics, or geographic regions. Additionally, the process of applying for grants can be time-consuming and challenging. While there are numerous foundations that provide funding, not all of them will align with your charity’s mission. Diversifying your funding sources is crucial.
2. Events and Fundraisers
Fundraising events, statistically speaking, tend to offer the lowest return on investment compared to other fundraising methods. Organizing and hosting events require substantial time and effort, which could potentially be channeled into more productive activities. Events also come with associated costs that can add up significantly, regardless of the event’s nature.
Moreover, the COVID-19 pandemic has severely impacted many events, forcing them to cancel or go virtual. Reliance on events as a primary source of revenue can pose substantial risks to a charities, particularly in the current environment.
While well-executed signature fundraising events can generate publicity and much-needed funds, they should not be the sole means of funding a new charities.
3. Corporate Donations
Corporate donations are often tied to fundraising events and may not be as readily attainable as one might assume. Corporations typically donate with an expectation of receiving something in return, such as exposure to their target audience, publicity, or enhanced corporate image. Acquiring corporate donations can be challenging, and success often hinges on personal connections within the company.
Board members and volunteers can play a pivotal role in establishing these connections and advocating for your charities’s cause. However, even with a connection, there may be stringent rules and specific timeframes for requesting corporate donations. Furthermore, corporate donations are not guaranteed to be renewed annually, and securing them can be competitive.
4. Appeals to the Wealthy
Targeting wealthy individuals solely based on their income may prove to be a challenging approach. People with substantial wealth often have specific charitable interests and preferred causes. Not everyone with financial resources is inclined to donate to charitable organizations, making it unwise to target individuals based solely on their household income.
Instead of focusing on income levels, it’s more effective to target potential donors based on their values and interests. Donors are more likely to contribute to your charities if they are passionate about the work you do. Prioritizing individuals who resonate with your cause, rather than their net worth, is a more strategic approach.
5. Crowdfunding
Crowdfunding has gained popularity, thanks in part to the growth of social networking sites and numerous online platforms. However, crowdfunding may not yield significant results if your charities lack an existing online following. Successful crowdfunding campaigns typically require a substantial online presence.
Crowdfunding should not be viewed as a “build it, and they will come” model. People do not typically wake up with an impulse to donate to random causes they find online. To make crowdfunding effective, you must actively promote and publicize your campaign. Additionally, some individuals may have reservations about donating through crowdfunding websites, particularly if your charities lacks an established track record.
6. Self-Funding
While you may have initially funded your charities organization with your personal resources, relying solely on self-funding is inadvisable unless you are independently wealthy. This approach can limit the organization’s growth and impact. Some individuals choose this path because they are reluctant to seek external funding, but it can hinder the organization’s development.
Self-funding effectively conceals the organization’s financial needs from potential donors. To outsiders, it appears that the organization is self-sufficient, which can deter potential supporters. Furthermore, attempting to fund the organization entirely on your own can become overwhelming and financially unsustainable in the long run.
Conclusion
Securing donations for your new charities organization requires a targeted approach. It begins with identifying the right donors and crafting the right message. None of the fundraising methods mentioned above are inherently bad; in fact, they can all be valuable tools. However, relying solely on any single method can be risky. The key is to diversify your fundraising efforts.
The important thing is to diversify your approach and consider multiple fundraising strategies. While grants, events, corporate donations, appeals to the wealthy, crowdfunding, and self-funding all have their place, a balanced approach is key to success.
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Disclaimer: The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.
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