The Ultimate Guide to Nonprofit Fundraising

Nonprofit fundraising is exciting. It’s the lifeblood of charitable organizations and can serve as a way to raise awareness of a cause and drum up interest among donors.

Fundraising is also a massive undertaking. Because it’s likely your primary means of income as a charitable organization, raising money can be a burdensome, never-ending effort. It can even seem scary.

But it shouldn’t. Great fundraising can (and should!) be learned and mastered. Building a nonprofit fundraising plan is the best way to equip your volunteers, avoid fundraising pitfalls, and create a sustainable organization.

That’s why we built this guide. Below, you’ll read about the legalities of nonprofit fundraising, the different ways to raise money, and how to build a simple fundraising strategy. Keep reading to get started or use the chapter links to jump ahead.

Nonprofit organizations can be philanthropic, religious, educational, artistic, or scientific in nature. Some churches and universities qualify as nonprofit organizations as they don’t keep a profit — any money received is spent on its cause or on maintaining the organization itself.

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Fundraising is often the primary means of revenue for these organizations. That’s one reason why nonprofits and charitable organizations dedicate so many resources to it.

The other reason is to meet the requirements of the public support test, among other nonprofit fundraising rules.

To qualify as a 501(c)(3) tax-exempt organization (meaning, donations are tax-deductible with a donation receipt), a nonprofit organization has to receive a “substantial portion of its income” from the public … hence the public support test. Non-exempt organizations can still raise money, but their donors won’t be able to write off their donations as a tax deduction.

Nonprofit fundraising is heavily regulated by state law. This holds organizations accountable for how they approach and treat donors, and it ensures donors are giving money to the proper parties.

Before soliciting any donations, organizations must register with the state government in whichever state they’re operating. If the organization goes to another state to fundraise, they’ve got to register there, too. Also, if an organization hires a fundraising consultant or grant writer, he or she must also register with the state. (TL;DR: Fundraising requires lots of registration.)

Cause-related marketing, also known as commercial co-ventures, are also regulated by law. Commercial co-ventures exist when a nonprofit organization makes an arrangement with a business to receive a percentage of sales. This also refers to when two charitable nonprofits that agree to sell something together and jointly benefit from profits. We talk more about these below.

Overall, all nonprofit organizations should follow ethical fundraising practices. The IRS doesn’t enforce specific structural policies, but it highly encourages certain management and operational practices so organizations can better “obey the tax laws, safeguard charitable assets, and serve charitable interests”.

Note: This legal information is not the same as legal advice, where an attorney applies the law to your specific circumstances, so we insist that you consult an attorney if you’d like advice on your interpretation of this information or its accuracy. In a nutshell, you may not rely on this as legal advice, or as a recommendation of any particular legal understanding.

Understanding the legalities of nonprofit fundraising can help you navigate the wide variety of fundraising methods — which ones you can and can’t do, and which ones are best for your charitable organization and donors.

Nonprofit Fundraising Ideas

There are many options when it comes to raising money for a nonprofit — however, there are two major ways to raise money: individual fundraising or company and corporation fundraising.

As you review these types of fundraising — and the different ideas behind how to raise money within both categories — don’t be afraid to combine some of the methods, or use the multi-channel fundraising approach.

By using this multi-channel approach, you diversify your fundraising methods so donors have more ways to contribute. Also, donors might be motivated by one method but submit their donation via another method (such as seeing a direct mail piece but donating via text).

Note: Many of the following fundraising ideas can be used for both individual or corporate fundraising — we’ve placed them in the category they’re most frequently used in. For example, you’ll notice we have events listed under both individual and corporate fundraising below.

Also, before you implement any of these ideas, don’t forget to review the fundraising guidelines from the IRS.

1. Individual Fundraising

Individuals account for about two-thirds of all donations made to nonprofits.

With individual fundraising — also known as personal fundraising — you can ask people within your network, such as friends, family, or colleagues, to donate to your cause. The process allows you to share your story and ask these people to help and support your cause (or whoever/ whatever you’re raising money for).

Why use individual fundraising tactics?

A few reasons why you may implement individual fundraising tactics include the need to raise money for an emergency or natural disaster, trips, life events, education, or medical expenses.

Here are some ideas for how you can implement individual fundraising tactics within your nonprofit:

Direct Mail Donations

Direct mail is a tried-and-true fundraising tactic. It’s cheap, quick, and can be repeated time and time again. The key? Writing a great fundraising letter.

In today’s world, direct mail should only be one of many fundraising tactics you use due to the fact so much content is digital. So, don’t forget to provide a way for your mail recipients to donate online, too (versus mailing in a check … which seems a bit old school these days, doesn’t it?).

Online Donations

Online donations refer to any donations made online — through your website, social media, or on a crowdfunding site.

Online giving is pretty straightforward. It also serves as the primary donation method for most other fundraising tactics. And even if your donors don’t hear about your fundraiser online first, there’s still a large chance they’ll end up visiting your website to learn more and make their donation online.

Social Media Donations

Social media has become a booming, online fundraising tactic due to the sheer number of people on various platforms — over 3.5 billion people globally, to be exact.

For example, Facebook allows individuals to run fundraisers on their news feed and for their birthdays. The platform has also released a “Donate Now” button for organization’s Pages. On Instagram, you can share a URL in your Bio that takes your followers directly to your fundraising site/ web page — you can even write a short description of your nonprofit, cause, or fundraiser in your bio to pair it with the URL.

Lastly, no matter the platform, social media makes it very easy to share content about your cause, why you’re fundraising, and who’s already involved to get others excited to become involved.

Mobile Donations

These days, people are rarely without their phones — and charitable organizations know it. Nowadays there are multiple ways to donate using your mobile device.

Some charities have apps through which you can give. Apps like Charity Miles, Feedie, and Walk for a Dog allow people to give back while doing everyday activities like running, walking their dog, or posting their food on social media. Companies can sign up to sponsor nonprofits through these apps.

Let’s not forget about texting, the most popular way to give using your smartphone. In 2018, almost 50% of donations came from a text link. You can send out links via text or encourage your donors to give through a text message.

Individual Event Donations

Events are a popular way to raise money. Events are a common individual and peer-to-peer (p2p) fundraising method — meaning your supporters (not volunteers) are encouraged to raise money on your behalf. Examples of these events include silent auctions, charity dinners, craft sales, and talent shows.

Note: Remember: corporations can also raise money through events, too.

2. Company and Corporation Fundraising

About $5 billion dollars are raised through workplace giving annually. You can use company and corporation fundraising if you’re looking to raise money from businesses that are willing to partner with your nonprofit.

Why use corporate fundraising tactics?

A few reasons why businesses may be looking to partner with a nonprofit include supporting or fulfilling their corporate social responsibility, reputation, and public relations.

Here are some ideas for ways you can implement corporate fundraising for your nonprofit:

Matching Gifts

The process of matching gifts is when a company matches employee donations. 90% of companies offer some kind of matching gift program. This is because these programs help companies give back while helping donors give twice as much. If you’re interested in matching gifts, consider using a tool like Double the Donation to make these programs easy to market and implement.

Volunteer and Corporate Grants

Companies give volunteer grants when their employees have volunteered a certain number of hours. This encourages employees to donate their time and holds businesses accountable for charitable giving. Volunteering can serve as a great team (or company) outing, too.

Corporate grants are sums of money that companies and corporations give to nonprofit organizations. Companies can either give these grants directly to an organization or choose from a pool of grant applicants. Nonprofits should look out for grant opportunities and ways to apply for corporate funding.

In-Kind Donations

In-kind donations describe non-monetary items given to nonprofits from companies and businesses. They usually include food, drinks, or supplies for an event, free professional services like accounting or legal services, or equipment for a construction project. In-kind donations are typically accepted from businesses with which a nonprofit already has a relationship.

Note: In-kind donations are often used as part of fundraising events, like silent auctions.

Commercial Co-Venture Donations

Commercial co-ventures, or cause-related marketing, is when a nonprofit organization partners with a business to raise money. Examples of commercial co-venture are when a restaurant donates a portion of its proceeds for an evening, or when a retail store gives a percentage their sales, to a nonprofit.

5K Walk and Run Race

Host a 5K race for employees (and community members) to participate in. To raise money, charge a race entry fee. You can also give participants the option of getting sponsorships and/ or fundraising themselves to participate in the race.

Corporate Cookbook

Ask employees to provide one of their favorite recipes to create a corporate cookbook. You can charge the employees who submit their recipes a small fee — then, once the book is printed, you can see the books to the employees as well as local community members.

Employee Events

Give employees a reason to bond, have fun, and raise money for a good cause. Accept donations throughout the night and charge an entry fee — you can also organize a raffle. You might even encourage employees to bring their family and/or friends depending on the type of event you choose.

Here are some employee event ideas for you:

• Bowling
• Karaoke
• Art show
• Wine tasting (partner with a local winery)
• Golf outing
• Silent auction