A Marketing Approach to Fund Raising

In most marketing transactions, a buyer pays a price to a seller for certain goods.  Public goods, those marketed by government agencies, are paid for primarily by taxation.  However, it is estimated that some 5 percent of the economy, the non-profit sector, is financed by voluntary contributions.  People pay these resources whether or not they consume what they are paying for, and they do so by choice, not by necessity.  These resources are amassed largely through the efforts of fund-raising planners.

Government agencies also engage in fund-raising activity, although to a lesser extent.  This category includes the campaigns of state funded hospitals and sales at the gift shop in museums.  When we contribute to social and fraternal activities of fire and ambulance groups, “Friends of the Library,” county zoos, and town playgrounds, we are supporting municipal services.

Fund-raising is one special type of social marketing, one of the most vital and yet one that is too often seen in a negative light.  Few individuals relish the prospect of soliciting contributions.  At the giving end, many are uncertain whether and how much to give, and how to select the most deserving charities.  Tax deductibility is another important issue.

Fundraising

What your not-for-profit does–your programs–is the highest priority for any not-for-profit manager. Fundraising is the second.

New fundraising techniques and methods come into existence every year, but the basic ones should be the backbone of your fundraising efforts. These are, literally, your “bread and butter.”

A Total Development Program

A Marketing Approach to Fund Raising means fundraising is not begging!  There is a world of difference between people who raise funds like beggars and those who believe that what they are doing is offering people the chance to support a worthwhile activity and to feel good by doing so.

Too often around the world, (and especially in this part of the world,) we speak of charity.  We call our agencies charities.  We get involved in fundraising very reluctantly because it feels uncomfortable.  We basically believe we are asking for a handout.

Fundraising is a modern marketing exercise these days.  Not-for-profit agencies deserve Board Members, Managers and fundraisers who are every bit as sophisticated as their counterparts in the commercial world.  There are big monies involved and lots of people dependent upon the success or failure of your agency.

A Marketing Approach to Fund Raising concept of a Total Development Program needs explaining.  It’s just like a marketing plan to sell a product.  And make no mistake about that – we are all selling a product in fundraising.  It may surprise you to learn that the product we are selling is not what you think it is.  It is not the service provided by your agency – it is selling the donor the feeling of being needed.

Our product in fundraising is the greatest product in the world – it is the “feeling of being needed”.  When a donor gives to your cause they identify with you as people and they feel needed.  People give to people, not to causes.

When you accept that concept of fundraising you will easily believe that people donate because they believe in you and they want to get involved.  They are not just giving a handout – they actually feel good about what they are doing.

That is the attitude that good fundraisers must develop.  When we do that, we can go about our task without apologies, without hesitation and without embarrassment.

Our attitudes, and those of our Boards of Management, Trustees and Chief Executives must gradually change so that we approach fundraising as thorough professionals.  We must realise that Governments will no longer provide adequate funding to maintain existing services let alone provide for expansion.  In the absence of increased Government funding, not-for-profit agencies must accept the responsibility to find other income.  Hence the growth in fundraising and the trend to employ more and more professional fundraising staff.

So what we find now is that within the last few years a new and exciting profession has evolved.

So, where does the money come from?

Individuals are the largest source of funding for not-for-profit organisations. Aprox 75% comes from individuals.

Corporations give in order to get…exposure, publicity, community respect, market share. Their funding is more episodic, revolving around particular campaigns, events, and projects. Corporate funding can be a good source of support for new initiatives, special programs, and special events. Look for opportunities to form partnerships for sponsorships and cause-related marketing.

Federal, State and Local Governments. Many not-for-profit institutions benefit from all levels of government. Obvious examples are public education, higher education, and the public media. Federal, state, and local government grants fund many programs provided by not-for-profits, especially in areas such as social services and healthcare.

Federated Funds can be steady sources of relatively large amounts of money. Available only to well established not-for-profit organisations.

Grant making Public Charities. These organisations are a cross between a private foundation and a charity. They typically receive funding from the general public, government and private foundations. They may do public service, but primarily raise funds and provide grants to charitable not-for-profits that provide direct service.

Foundations come in various sizes and types but their grants can be important and substantial.

Corporate Foundations are private foundations, but their boards are often made up of corporate officers. Their endowment funds are separate from the corporation and they have their own professional staff.

Family Foundations receive endowments from individuals or families. Many large, iconic foundations are family foundations. These family foundations have endowments in the billions, but most family foundations are much smaller, tend to fund locally, and often have little to no professional staff.

Community Foundations are public foundations and pool the assets of many donors. They work to improve their local communities through grant-making, awarding scholarships, and providing services to donors. Community Foundations have become very active in providing donor-advised funds for donors who want to become more purposeful in their giving but don’t want to set up their own private foundations.

Reciprocal Benefits from Social Marketing

Strategies for corporate giving have changed over the years, and corporations are looking for new ways and places to give.  Two successful approaches devised in recent years-in-kind philanthropy and cause-related marketing-rely on commercial firms to assist in promoting NFP’s and their causes.  This has proved beneficial to the firms themselves,

In-Kind Philanthropy

It is not uncommon for a firm to be called upon to contribute in-kind goods and services to NFP’s.  Advertising agencies in particular, are in a unique position to contribute in this way, and to benefit as well.  By donating talent to create social ads, the agency gains an opportunity to display its work publicly.  The audience is likely to include at least a few prospective corporate clients who will take note of the agency credited in the fine print.  How better to advertise advertising!  No wonder the practice is so widespread.

Virtually all businesses are called upon to donate goods and services to organisations, most notably on the occasions of church bazaars, grand openings, and emergency fund-raising events.  NFP’s make up an industry in which “freeloading” is not only respectable, but often mutually beneficial.

A great many companies promote voluntarism in order to increase their visibility. Both the private and public sectors have much to gain by promoting voluntarism and community service.  If these deeds can also serve as marketing tools, they are also defensible as contributors to company profits.

The types of possible joint ventures are endless and provide unlimited opportunities for stretching one’s creativity

Find this interesting and want more?  There is a MAANZ MXpress digital short course available (Fund-raising for Worthy Causes MKT1922) that includes full notes a set of PowerPoint slides and a certificate.  Visit http://www.marketing.org.au

Fund-raising for Worthy Causes $35.00 MKT1922
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4 thoughts on “A Marketing Approach to Fund Raising

  1. Giving to NFPs is not all altruism. Let’s not forget that one of the big benefits to giving to NFPs by corporations and wealthy individuals is tax deductions (and other tax benefits). I do work for some NFPs and the tax angle is often an important (but not over emphasized) ingredient in their marketing messages.

    • Hi, Thank you for the comment

      Certainly there is much more to it than what appears in this article – which is part of a bigger course (see the bottom of the article)

      Brian Monger

  2. You provide very thorough information here. Very valuable insight as well which I will be passing along to several friends who work with NGO’s and other Charitable Orgs.

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