Fundraising finance

Non Governmental Organizations require money to run their operations and expand their programs.  Much of the funds come from third party individuals, governments, Foundations, Trade organizations, Professional and other funding organizations.  Raising money is a difficult task, but the organizations must secure finances to keep the wheels turning.

 Some non-profits, specifically start-ups and charities operate without a fundraising plan.  However, large non-profits have to formulate plans. There are different fundraising techniques employed.  NGOs do not heavily rely on one alone rather a combination of techniques. 

Fund raising techniques

Effective fund raising techniques for non-profit organizations include direct mails, major donor programs, grant programs, fundraising events, giving clubs, corporate business programs, capital campaigns and overall funding revenue.  Direct mails are used in fundraising due to their effectiveness in gaining new donors, marketing and establishing a brand. One of the reasons why direct mails are used is that they allow the organization to directly target the particular individuals or organizations without necessary engaging those that are not likely to make contributions.

  This is different from radio, newspaper, magazine and Television and other types of mass communication (Sonntag & Zizzo, 2015).  Hence, direct mail is highly targetable. Direct mailing is also relatively cheap. Launching a direct mail campaign costs exponentially low compared to other techniques used in soliciting for funds. The non-governmental organization can track direct mails and make changes cheaply and quickly.  Direct mail appeals are likely to appeal when they have an entertainment value that is likely to keep people reading. They should have a conversational voice that addresses the recipient. An effective direct mail should not focus on the charity rather is donor centric.

A non-profit organization can obtain funding from major donor programs. Organizations can perform a prospect screening and determined planed giving potential to determine the major donor to address. Major donor fundraising takes time and requires detailed planning.  Major givers to non-profits often do not make spot decisions to finance not for profit organizations.  Major donors only provide funds when they are convinced of the course (Sonntag & Zizzo, 2015). This means that they need to learn about the organization before they can get involved in events, programs, and advisory roles. They may begin with small gifts before giving bigger gifts.  Hence, the organization must provide information through which donors use to make funding decisions.

In this regard, it is important for nonprofit organizations to have individual donor plan for each major prospect.  Some prospects prefer mailing; others prefer events. Most major donors may require that the organization integrates them into their fundraising networks.  The organization should get to know about its prospective donors and develop a plan focused towards the ultimate ask.  Given that every donor is different, a unique plan is required for each.   Obtaining funds from major donor may take more patience and time than simply sending out a direct mail letter. 

With the plan and strategies in place, major donor efforts may begin to produce results and ultimately provide a major boost to the organization.  Major donors form a valuable and consistent source of funds. Hence, the time allocated towards cultivating potential major donor is vital and also cost effective (Sonntag & Zizzo, 2015). A single major donor can significantly change a non-profit’s source of income. Therefore, it is necessary to build a long term, meaningful relationship with a significant donor compared to using other indirect channels.  It is important to first identify if the organization is ready to launch a major donor campaign and the right structures exist to enable this.  Donors need to feel a sense of ownership of the organization’s mission any may expect a track to goals, future plans, challenges, and achievements.  Grants provided to non-profit organizations form a good source of funds.  Given that nonprofit organizations exist in order to benefit the public, the organization must prove the need for its existence. After establishing a need for the project, the organization must then convince the donors and funders of its ability to execute its plans.  Additionally, the non-governmental organization can run corporate giving programs.

Successful strategies

Curry et al., 2012 note that best practices in fund raising include building stronger relationships with donors and the development of effective and integrated communications and public relations strategies. Public relations practitioners as sources of information may cultivate personal relationships and interpersonal contacts to have a greater impact on the agenda building process.   Accordingly, reputation is impacted through the information stakeholders receive about an organization. Through various interactions, stakeholders receive information about an organization in the form of mediated reports and second-hand information. Thus, reputations are evaluative, and a point of comparison is necessary. Stakeholders evaluate what they know about an organization to various standards to establish whether or not an organization meets its expectations about how it should behave. An expectation gap or the failure to meet expectations negatively impacts the organization. An organization’s reputation is based in large part on how different stakeholders evaluate its ability to meet their expectations.

This highlights the key importance of communication and Corporate Social Responsibility practices. Nonprofit organizations today do not recognize the importance of CSR communication.  Reporting forms part of communication efforts where the organization can present proof of its commitment to sustainable social development (Curry et al., 2012). In fact, non-profit organizations find that greater opportunity exists when the organization is visibly accessible and involved with the public. When properly contextualized and authentic, CSR communications can initiate a wider dialogue and unite many corporations and individuals thus multiplying the impact. 

Communication is an essential element of fundraising. Depending on its goal, it presents an opportunity to boost fundraising efforts. When the fundraising philosophy is integrated into the organization’s corporate values and culture, communication only involves an expression of efforts, funds, and energy invested in the program. Fundraising best works when only important issues are communicated as well as efforts to resolve them. Nonprofit organizations can effectively communicate their initiatives through different channels within the organization’s reach.  Organizations should recognize the importance of engaging in effective communication in its fundraising initiative.  The study suggests that it is important for organizations to effectively communicate fundraising activities. A well-communicated initiative is in response to the demand for greater transparency by stakeholders.  Stakeholders and potential donors rely on information s flow to allow them to make a decision.

The organization’s communication efforts should be effective in encouraging targets to donate towards the cause. However, this was only possible when extensive communication is carried out through different channels (Sargeant et al., 2012).The effectiveness of communication allows receivers to make a decision towards the initiative.   Receivers can also be able to share the information on their platforms. This ensures that the communication reaches different individuals and organizations. The initiative also drove the coverage by print and electronic media as an added benefit. Different print and electronic media may cover the fundraising initiative when it becomes popular through other channels such as online platforms.

It is important to recognize the disconnect that arises when there lacks effective communication
between
the organization implementing the initiative and the desired recipients. Lack of necessary public
awareness
 impedes
any
potential
benefits
to the organization. It is, therefore, important to intelligently
and strategically communicate fundraising initiatives. A strategy commonly utilized is communicating the motivation behind the activity. This is one of the strategies used by the company to generate favorable
 attribution for
its 
fundraising programs.

 It aids the initiative when the organization’s
 motivation behind
its
involvement is known by the target audience. Additionally, it is important to choose the right platforms to communicate the initiative depending
on
the audience
the organization is trying
to
reach.
Identifying the audience allows an organization to select an appropriate platform to communicate its initiative. As a result, it is easier to attract media attention to
fundraising programs. Internet
communications
offer
the most suitable opportunity to engage
and
share
 information with huge audiences

Fundraising on the Internet

In their study, Bøg et al., (2012) suggest that there is a relationship between internet fundraising activities and the total amounts raised (Bøg et al., 2012).  Today’s economic environment has forced many donors to cut back on their donations. The instability shift of constant economic changes and instability has created a challenge for non-profits.  As a result, nonprofits have been forced to look for alternatives in order to deal fill the gaps in the present budget and meet long-term needs of the organization. Organizations have found that e-fundraising techniques are filling the gaps.  Raising money through the internet is becoming a vital practice for the survival of many organizations.  A non-profit can choose to use different online channels at once in order to reach their desired internet fundraising goal.

This means that the internet is a formidable tool for fundraising which offers numerous opportunities for nonprofit organizations. Due to these opportunities, it has been extensively adopted as a fundraising tool among nonprofit organizations.  By looking at donor behavior over the internet, organizations can be able to identify gaps and also identify perception. This way, an organization can determine where to invest further budget.  Given the importance of the internet in fundraising, it has become a valuable tool that aid in the organization's decision-making and accomplishing organizational goals.

The study conducted by Hoefer, shows that there are three effective fundraising techniques. These are affiliate marketing, online donations and membership and informational products.  Affiliate marketing can be done in two general ways. The first is through linking to a company. The second way is through promoting particular products.  For example, a company can pledge to give $2 for every dollar donated through its site to a nonprofit organization.  Online donations and memberships involve moving web site visitors to become online contributors.

Perception also plays a key role in the success of fundraising efforts. The practice of Corporate Social Responsibility provides the organization with the opportunities to re-think how daily management decisions can affect donors and the public.  Nonprofit organizations have different avenues to communicate their efforts (Meineri et al., 2016). Corporate Social Responsibility practices require that organizations detect key audience and incorporate their needs and wants to the business’s strategic goals and decision-making processes.

Corporate social responsibility is a growing trend in the nonprofit world.  Leading organizations dedicate assets and resources to develop the strategy and direction that the organizations wish to implement. Communication is necessary as the corporate social responsibility concept is among the models that are easily twisted and interpreted differently (Han et al., 2017). Therefore, communication should take place to clear doubts.  Research shows that there is a variety of things that different stakeholders expect from nonprofits CSR communication. For example, the public may want to know the beneficiary of the corporate social responsibility efforts.  Thus, communication plays a significant role in the efforts of nonprofit organizations.

Factors affecting donations

Rubaltelli & Agnoli (2012) find that there is an emotional cost of supporting a charitable organization. Having a personal connection to an organization or its cause may play an integral role in why a donor gives. Donors may support an organization solely because a person they know has been personally affected by the activities of the organization (Rubaltelli & Agnoli, 2012). This means that it is more likely to obtain donations from individuals or organizations from which the nonprofit organization has once served. Peer-to-peer fundraising and engagement should be factored into such initiatives.  Additionally, donors are likely to sponsor organizations they know are participating in a fundraising event. Making a personal connection with the targeted audience is likely to ultimately lead to strengthening fundraising results and long-term relationships (Macdonnell & White, 2015).

Caviola et al., (2014) suggest that there is an evaluability bias in making donations. This means that donors are influenced to decision making by the context of the donation. The results support the conclusion that donors value cost-effectiveness (Caviola et al., 2014). Bebko et al., (2014) note that advertising appeals have an impact on donor behavior. Boosting engagement with advertisements entails sharing the right content when necessary (Bebko et al., 2014).  However, it may be challenging to determine what types of content can motivate the audience to take action particularly when target audiences are diverse.

The first key consideration is that Content should be relevant to attract the needed attention. Secondly, different techniques should be employed to drive engagement on different advertising platforms. This could involve researching on what people are saying on a different platform.  An analysis on content should be conducted to enable generation of content which resonated with the audience. It is imperative to take a look at what other nonprofit organizations are doing.  In addition, it is helpful to study what adverts often perform well on different media and why (Ishida & Okuyama, 2015).  There are some of the adverts types that have been proved to increase engagement with donors such as the use of images and videos. Telephone fundraising shows high effectiveness compared to other forms of fundraising media.

Images have been used in driving engagement on internet fundraising.  Audiences are overwhelmed with text to be read and process in order to derive any sort of value. On the other hand, videos and images appeal to users’ tactical senses, feelings instantly and communicating messages. As a result, effectively formulated adverts are likely to provoke higher levels engagement compared to text only posts.

Fundraising regulations

Breen (2012) argues that there is a need for the identification and better items to be regulated. The purpose of the study by Breen was to achieve a balance between nonprofit’s rights to ask and public’s rights to be left alone (Breen, 2012). The author argues that it is for the benefit of nonprofits to maintain public trust in order to promote a better relationship with the public as well as the donors. He recommends that charity trustees need to take a more active role in the supervision of fundraising. This is important because the goal of nonprofits is to carryout fundraising rather than simply raise money. Most importantly, fundraising should be a conduit between the public or donors and the cause they support (CEcD, 2015).

This is particularly important given that greater demands placed on nonprofits have seen than increase their fundraising activities.  However, there are imbalances experienced between giving and asking.  The current situation faced by nonprofits does not mean that there should be no balance between giving and asking. Different techniques used and the manner in which they are employed may present a clear risk. As a result, the practice may damage nonprofits in the public eye. Irrespective of this,  It is the role of charities to demonstrate that they have clear genuine intentions.  However, good intentions are not always enough to steer away from bad outcomes (Bowman, 2015).

The author discusses various nonstatutory regulations that nonprofits schemes should follow.  These include the need to attract high voluntary participation across sectors. Nonprofits may also need to provide a clear public promise on the expectations they intend to meet in relation to fundraisers in the scheme. Good fundraising practice also requires openness, accountability, and transparency in fundraising activities. Participants should actively promote awareness amongst the public and other concerned parties as a good fundraising practice. Additionally, the organization should appear to be impartial and independent, and compliance be monitored proportionately. Non-compliance with regulation should attract sanctions proportionate to the extent and nature of the non-compliance. An effective complaint handling process should be put in place to allow easy accessibility to the public and participants.

In addition, there is a need to be clear about remittances. Other regulators may be engaged particularly in issues concerning remits. Annual reports prepared in detail may form an important part of the efforts towards accountability. Publications form an important part of reporting practices.  Emerging trends and fundraising practices should be identified, and public perception about the practice be analyzed to allow sufficient flexibility in adapting to the evolved code of practices where the need arises.  The regulations should be proportionate and keep to a minimum the regulatory burden that lies on participants.  How the complaint process functions is important to the success on self-regulation schemes.  Self-regulating schemes face a number of challenges. The most significant challenge is the scarcity of funds. Broadly speaking, the current regulatory regime cannot oversee the detailed management of regulatory practices and deal with all fundraising-related complaints from stakeholders and the public.

 Challenges

Curry et al., 2012 note that many challenges face nonprofit organizations in their fundraising efforts.  These include leadership, changing demographics and lack of data-driven decision making.  Effective Leadership concerns the ability to make sound decisions and inspire other people to perform well. Effective leaders take swift and decisive actions, set and achieve challenging goals, take calculated risks. The lack of effective leadership in nonprofit organizations means that there lacks an established clear vision and the vision may not be shared with others so that they may follow willingly.  Leaders must be in a position to provide information, methods, and knowledge to realize the vision. Effective leadership in fundraising activities also involves coordination and balancing the conflicting interests of different stakeholders. At the core of leadership are two functions of exercising influence and providing direction.   The ability to engage in practices that promote the development of effective and healthy collegial relationships with donors depends, in part, on leaders' effectiveness. 

The second challenge is in the area of management systems. Incremental decision making no longer suffices in the era of data driven decision making. Improved decision making and insights with greater skill are the key benefits attainable from turning available data into actionable insights regardless of the source or an increasing array of data sources. The purpose of data driven decision-making is to help organizations make sounder and prompt strategic and operational decisions. Real-time analytics and reporting are critical to making speedy, impactful decisions. Superior data intelligence is vital to fundraising initiative success given that information can help the organizations manage their data to achieve their goals.

Before making a decision, all relevant information has to be gathered.  When inadequate or out-dated information is used, the likelihood of a wrong decision being made is high. On the other hand, the availability of extensive information that is irrelevant information makes it difficult to make a decision or get distracted by unnecessary factors. The first step involves identifying the purpose of the initiative. The second step involves gathering relevant information. Fundraising decisions require the collection of pertinent information.

References

Bebko, C., Sciulli, L. M., & Bhagat, P. (2014). Using eye tracking to assess the impact of advertising appeals on donor behavior. Journal of Nonprofit & Public Sector Marketing, 26(4), 354-371.

Bøg, M., Harmgart, H., Huck, S., & Jeffers, A. M. (2012). Fundraising on the Internet. Kyklos, 65(1), 18-30.

Bowman, B. (2015). A Comparative Analysis of Crowdfunding Regulation in the United States and Italy. Wis. Int'l LJ, 33, 318.

Breen, O. B. (2012). The perks and perils of non-statutory fundraising regulatory regimes: An Anglo-Irish Perspective. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 23(3), 763-790.

Caviola, L., Faulmüller, N., Everett, J. A., Savulescu, J., & Kahane, G. (2014). The evaluability bias in charitable giving: Saving administration costs or saving lives?. Judgment and decision making, 9(4), 303.

CEcD, S. P. B. (2015). Six questions and six keys to better fundraising. Economic Development Journal, 14(1), 39.

Curry, J., Rodin, S., & Carlson, N. (2012). Fundraising in difficult economic times: Best practices. Christian Higher Education, 11(4), 241-252.

Han, D., Lalwani, A. K., & Duhachek, A. (2017). Power Distance Belief, Power, and Charitable Giving. Journal of Consumer Research, 44(1), 182-195.

Hoefer, R. (2012). From Web Site Visitor to Online Contributor: Three Internet Fundraising Techniques for Nonprofits. Social work, 57(4), 361-365.

Ishida, Y., & Okuyama, N. (2015). Local charitable giving and civil society organizations in Japan. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 26(4), 1164-1188.

Macdonnell, R., & White, K. (2015). How construals of money versus time impact consumer charitable giving. Journal of Consumer Research, 42(4), 551-563.

Meineri, S., Dupré, M., Guéguen, N., & Vallée, B. (2016). Door-in-the-Face and But-You-Are-Free: Testing the Effect of Combining Two No-Pressure Compliance Paradigms. Psychological reports, 119(1), 276-289.

Rubaltelli, E., & Agnoli, S. (2012). The emotional cost of charitable donations. Cognition & emotion, 26(5), 769-785.

Sargeant, A., Hudson, J., & Wilson, S. (2012). Donor complaints about fundraising: What are they and why should we care?. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 23(3), 791-807.

Sonntag, A., & Zizzo, D. J. (2015). On reminder effects, drop-outs and dominance: Evidence from an online experiment on charitable giving. PloS one, 10(8), e0134705.

Carolyn Morgan is the author of this paper. A senior editor at MeldaResearch.Com in Online Paper Writing Service. If you need a similar paper you can place your order from Professional Custom Writing Services.