How to Fundraise: 7 Things Everyone Needs to Know
You’ve looked into the coffers and checked the bottom line. The conclusion is that if you’re going to stay afloat for the next year, you need to consider some serious fundraising. But how to fundraise? Whether you are an individual or the president of an organization, there are some basics you absolutely must consider before you begin.
- Individuals: The bald truth is, when you get serious about how to fundraise, taxes must be your first consideration. If you are an individual raising funds for yourself, when you come up with your goal amount, you must add to it the amount of taxes you will need to pay in that tax bracket. A lot of people think of donations as “free money,” but if you’re not a non-profit organization, you will probably be expected to pay taxes on it (it’s best to consult a tax professional). The IRS website has forms that will help you estimate the taxes. Here’s one possible way to avoid all that: Since this is a humanitarian gig, you might be able to find a non-profit umbrella under which to raise funds, or create your own non-profit. Legal Zoom is a great online spot for information and help regarding forming a non-profit. Why doesn’t everybody do that? There are lots of rules, regulations and organizing involved. If you’re patient, creative, and have some like-minded friends interested in your venture, you may be part way there, but it takes some serious thought and work to do this. Here’s a starting place, but a site like Legal Zoom can help break all that down for you.
- Organizations: This is simple. If your organization is does not already have its non-profit status, now is the time to take care of that. Legal Zoom can help you with information and can do a lot of the legal legwork for you. If you already have non-profit status, proceed to the next paragraph.
When you create your fundraising target, keep in mind any overhead that you will create in the fundraising process. Ask questions and make a list. Will you have a large event that will require renting space? What expenses might that event incur besides the space? Do you need to purchase materials? Do you need to hire a fundraising consultant? Will you need paid advertising? Once you get a ballpark figure for all items on your list, add 20% to it, because everything costs more than you think it will, and there will always be hidden or forgotten costs along the way. Having more left over at the end of the day is better than running short.
Then ask how you will meet those expenses. Does all of it need to be paid before your fundraiser? If your coffers have gotten pretty low, or you’re starting from scratch, you may need to figure out how to fundraise in stages, something smaller and more low key to raise the money you will need in advance of the major fundraising. You may even want to consider soliciting donations from a few key people to help get you going. Consider soliciting donations online; free online fundraising platforms like GoFundMe make it easy to collect donations from Facebook friends and email contacts and can be a great way to raise small (or large) amounts of money prior to your big event.
Remember also, that if your fundraiser is only minimally successful (but you’re reading our blog, so how can it be?) you will still have to meet your expenses, so that dollar figure needs to come off the top of whatever you raise.
Selling (yourself or your organization).
Let’s face it. The economy is tough. For every $100 a person has, there are at least five places begging for that hundred (and I’m just talking bottom line expenses – not charitable organizations). To successfully fundraise, you or your fundraising manager must have the big picture and a sales mindset to go with it.
I’m not saying you have to act like a used car salesman and be a plague on everyone. In fact, that’s exactly not how to fundraise. But you have to be sure of your goal, be confident of your mission, and either be or find someone with the mindset of “I can sell anything that I believe in.”
You love your plan, your organization, your mission. You think that everyone should be as enthused as you are about it. Get real. That’s another part of the selling – make it extremely appealing and then target a specific audience. What kind of people would be interested in helping you meet your goal? Where will you find these people? How will you reach them? Consider how to fundraise in a way that assures the widest possible audience will be reached by your message.
It would be great to come up with the most original fundraiser in the world, but even then you wouldn’t attract everybody. The most important thing is to be creative. Take a tired fundraising concept and inject new life into it or take a really lively concept and personalize it. Put your own twist on everything you do. If you’re hiring a fundraising coordinator, assure yourself of their imagination and creativity from the get-go. Don’t forget that our website is a great resource for ideas on how to fundraise every step of the way.
One of the foundations of Celtic society was and is reciprocity. It was something they considered foundational even to law. Reciprocity is a sacred concept. Give your target donors something in return (besides a 2-hour slideshow of your trip or a thank you letter). That doesn’t necessarily mean something physical that has a price tag, although it can be. Give them real psychological satisfaction. Help them feel tangibly involved somehow when they give. Make it fun for them. Make them feel good about themselves and about your organization. That’s also how you create repeat donors.
The bottom line is the bottom line. Keep track of everything. Polish your own bookkeeping skills, look at how detailed your treasurer is, or hire someone specifically to keep track of your fundraising. You need to be able to produce a balance sheet at the end. If you are an organization, you likely already have a handle on this, but if you are an individual, you may have to think and work in new ways. Quickbooks is great for the organization – Intuit even has a special non-profit version that helps you consider categories you might not think of on your own. Quicken is fine for the individual, and can be a great boon in reminding you of those things you may have paid cash for out of your wallet that need to be put on the expense list. But just a good ol’ spreadsheet in Excel, Open Office or whatever came with your computer is just fine, too. Just find a way to keep track of it all. One of the benefits of collecting donations online with fundraising tools designed specifically for this is that it leaves a very neat paper trail.
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