This morning, Foundation Center-San Francisco was fortunate to have Ilona Bray, author of Nolo's Effective Fundraising for Nonprofits: Real-World Strategies That Work, present a seminar about how new nonprofits can raise money. The seminar, First Fundraising Strategies for New Nonprofits, focused on some of the tougher aspects of fundraising when your organization is still getting off the ground.
One of the main factors involved in getting a foundation grant is a steady track record of effective programming; however, if an organization is brand new to the field, this track record doesn't necessarily exist (the new nonprofit chicken vs. egg phenomenon). There are a number of strategies a new nonprofit can use to mitigate this issue. Mainly, looking within the organization to discover what assets already exist and how your organization can re-purpose those assets to support fundraising.
- Individuals: An important, and occasionally overlooked, source of funding comes from individuals. According to Giving USA, 89% of households give. Of that 89%, eight out of ten individuals make less than $90,000 per year. Quite literally, the majority of donations come from people like you and me. Keep that in mind the next time your organization needs funding. It is also a good idea to look to individuals in the community surrounding your organization. Bray used the example of a neighborhood restoring a building or structure in its community. They will want to look to individuals within the community for funding as the project serves the best interests of that community. Another reason to look to individuals when it comes to fundraising: It's an excellent way to make connections and build support for your cause.
- Donations or In-kind Gifts: New nonprofits might also want to explore the possibility of cash or in-kind donations as a first fundraising strategy. Soliciting donations from businesses located within the same community is another good way to generate support for your project and become known within your community. As well, relationships between local businesses and nonprofit organizations are beneficial to both parties. Supporting a nonprofit is often positive for a business' reputation, whereas a nonprofit will benefit from the relationship financially. In-kind support from a business also generates positive PR.
- Selling Things: People forget that nonprofits are allowed to sell things in order to support their operations. It must be that whole "nonprofit" title, but let's not forget the Girl Scouts of America. The Girl Scout Cookie Program is responsible for $700 million of the organization's operating budget, yet they are still considered a nonprofit. Your nonprofit organization may not be able to kick-off a cookie campaign, but there are plenty of other ways to generate earned income. This is a good area to look at assets that already exist within your organization. For instance, your organization might already have access to a space to do business in, or you could sell the art of one of your employees, volunteers, or clients. For more information on earned income, The Society for Nonprofit Organizations’ Fundraising Guide to Earned Income is a good start. Bray reiterated that profits generated by a nonprofit organization must fall within the limits set by the IRS.
While the key to foundation fundraising is a good track record of effective programming, there are plenty of fundraising options to explore until an organization has developed their track record. Until then, it helps to look within your own organization to see what assets you already have and how they can be re-purposed for early fundraising.