What is fundraising & its types – All that you need to know about fundraising

FUNDRAISING through online platforms helps people from anywhere in the world to donate to a cause they believe in. In this blog, we will present a beginner’s guide to fundraising. The articles on this page represent the basic knowledge you need to get started with raising money for any NGO or non-profit organization. 

What is fundraising? 

To define fundraising, it is a process through which individuals or groups collect donations for various causes. Both for-profit and not-for-profit organisations could engage in fundraising activities. The person or a group raising funds for a particular cause is referred to as a ‘fundraiser’. The meaning of fundraising does not lie in finding donations for a traditional business venture or to enrich investors, business owners, or organizational shareholders. But it is the process of providing support for a cause.

Nonprofit fundraising refers to garnering donations to support a charitable cause. Nonprofits raise funds for charity through various traditional means. But it is through the digital medium that they can reach the maximum number of people to raise funds. Give is one example of a fundraising site where one can raise funds for charitable causes with great ease. Give is India’s largest and most trusted crowdfunding platform.

Why is fundraising a good thing to do

Online fundraising by crowdfunding organisations could be for meeting business needs, urgent medical funds, upliftment of women, education of the poor, etc. Of course, nonprofits’ raising funds could be for various social activities and even religious.

To explain fundraising meaning, an example could be that of the United Nations World Food Programme (UNWFP) is one. UNWFP raises global funds to tackle hunger and poverty. Nonprofit organisations do not retain profits — all money received is spent on specific social causes and administrative expenses.

Types of fundraising

The fundraising process is riddled with challenges and complexities. Before setting up a crowdfunding campaign or event, one must understand the ultimate meaning of fundraising & the best approach in navigating through the fundraising process and then decide which type of fundraiser is best suited to the specific requirement.

1. Corporate Fundraising, also known as cause funding, encourages corporates to contribute to a nonprofit or a charitable cause. Here, the nonprofits approach corporates with their cause and the need for funds, and the corporates donate accordingly. This takes care of two purposes. Firstly, the NGOs are able to raise substantial funds to meet their needs in one place, and secondly, a company includes the same as part of its Corporate Social Responsibility activity.

2. Online Fundraising has widespread outreach, and has thus proven to leverage a larger audience as well as a quicker turnaround time than physical raising of funds activities. One can create a fundraiser on an online giving platform like Give, and request funds for the cause. Raising funds for medical emergency can also be done online, and it is being done rather effectively on Give and other platforms. 

3. Direct Fundraising, similar to direct marketing in the corporate world, is a process of reaching out to people through emails and social media messaging. This process directly targets people who are habitual donors, or have previously contributed to your cause or organisation.

4. Event Fundraising is an integral part of nonprofit organisations’ activities to raise money. These can happen through social events such as marathons, cooking competitions, book fairs, art exhibitions and blood camps. Through such activities, contributors partake in and enjoy the event, as well as spread the message about the event’s primary goal – is how to raise funds and spread awareness for a specific social cause. For instance, one can organise a half marathon and fundraise for people with disabilities. Participants contribute monetarily in support of the cause and help promote the cause through word of mouth, besides also benefiting their own health and well-being in the process.

What is the difference between fundraising and crowdfunding? 

1. One can look at various types of fundraising from a historical perspective. They have been mainly offline. These could be in the form of offline events, physical donations, bank transfers, or large get-togethers. Here a large number of people participate and raise funds for an individual, organisation, NGO or charitable cause. 
2. As the world underwent a digital revolution, many other types of fundraising started taking place online. One of them is crowdfunding.
3. Simply put, this crowdfunding is a type of raising funds that involves a large number of people, mostly online. 
4. Crowdfunding can aid a business, a fresh start-up or others. Profit could be a motive here, depending on what the people raising funds through crowdfunding are seeking. 
5. Then there is online crowdfunding for nonprofits. This remains nascent if you look at the amount of money raised online for various causes. But online crowdfunding for NGOs and charities is growing at a fast pace.

Why crowdfunding is important for NGOs

Why fundraising is important for NGOs is that they can allocate resources for the most important objectives and achieve their goals. Fundraising for NGO on Give is a simple process. There are various types of raising funds for charity that NGOs can resort to. But the most effective one is crowdfunding and it is also appealing to a wider audience. It is through crowdfunding and other types that nonprofits can work towards the eradication of various social problems.

How is fundraising regulated?

The nonprofit fundraising sector is highly regulated by the state and central laws in India. This structured system of checks and balances helps ensure that nonprofit organisations follow ethical practices when it comes to raising funds. And that donors give money to genuine entities. To qualify as a tax-exempt organisation (i.e. donations are tax-deductible with a donation receipt), a nonprofit organisation must receive a substantial portion of its income from the general public. Non-exempt organisations can still raise money, but their donors cannot claim a tax deduction on their donations.

Given the growing popularity of online raising of funds for charity in recent years, many digital platforms are helping people to raise funds for specific causes.

FAQs:

1. What does fundraising mean?

Fundraising is a process through which individuals or groups collect donations for various causes. Both for-profit and not-for-profit organisations could engage in this. The person or a group raising funds for a particular cause is referred to as a ‘fundraiser’.

2. What are some most popular forms of fundraising?

Peer-to-peer fundraising, charity auctions, online donations, an crowdfunding are some of the most popular fundraising ideas for nonprofit organizations. Check these 5 creative Fundraising Campaign ideas here.

3. When can a new non-profit organization start fundraising?

• All non-profits listed with Give are eligible for raising funds. 
• In fact, once onboard, Give has an induction and training program for the new NGOs through a series of emails comprising video tutorials on how to leverage crowdfunding. 
• Non-profits can initiate their onboarding request by emailing us at membership@give.do, along with a confirmation of their possession of a valid Registration Certificate/Trust Deed and 12A Certificate. Our team will get back to you with the required assistance.

Explore fundraisers on Give.do here and start your journey as a changemaker today!

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Established in 2000, Give.do is the largest and most trusted giving platform in India. Our community of 2.6M+ donors have supported 3,000+ nonprofits, impacting 15M+ lives across India.