by Nicole K. Bulanchuk
Published January 2021
Financing an NGO Addressing Mental Health and Poverty Even During and After a Pandemic: A Review and How-to Guide
“How are we going to pay for it?” That’s arguably the most overwhelming question facing brave humanitarians who want to start a non-for-profit organization or non-governmental organization (NGO).
Another daunting coincidental question is, “Who’s going to pay for it?”
These vital questions apply to starting the organization and also sustaining its entire existence. Like me, you can have a passion to improve worldwide food insecurity, for example, but unless you have funding for the project, how will it ever be accomplished?
Traditionally, NGOs relied heavily on government grants to fund their projects and programs. Yet, in today’s global economy, winning governmental grants and obtaining international assistance are becoming increasingly competitive and challenging (Phoofolo, et al., 2011). Grants may not even provide enough funds for a growing NGO to thrive. Indeed, countless worthy NGOs and humanitarian projects are initiated around the world, but unfortunately, funding for sustainability is limited. Thus, I am writing this guide to inform NGO leaders, including to reassure myself, that funding is available; even in turbulent times, as during the COVID-19 pandemic. This guide discusses and outlines different strategies and methods that NGOs can take to finance their projects and programs outside of governmental grants and international assistance. Specifically, I focus on NGOs that address poverty and mental health, but all the information is transferable to every field.
Financing your NGO is possible, even in a pandemic.
How to Use this Guide
This guide targets new, emerging, and existing NGO leaders to inspire them to seek other modes of funding during the COVID-19 pandemic, other than government and international financial institutions. The first section will go into detail about my experience in fundraising and organization management, which makes me qualified to write this guide. The next section briefly discusses the issue of declining government and international financial institution funding, and why this guide is so critical to NGO leaders in 2021. I also discuss how this guide is valuable when considering the United Nation’s Sustainable Development Goals (SDGs) 1 and 3, the World Health Organization (WHO) Framework and health systems, and the strive for Universal Health Coverage.
After these background sections, I then outline how to develop a fundraising plan and how and why fundraising software is important to use. Next, I go into detail discussing how to develop an effective fundraising story and how to ask for donations. Thereafter, I discuss the various avenues NGOs can seek funding from during the COVID-19 pandemic, and the pros and cons of each; including major gifts such as corporate giving, small businesses, community and private foundations, and private philanthropists; and minor gifts such as individual contributions from everyday people. Each of these sections include descriptions of the funding source, followed by examples of funders and how to search and obtain them. I also explain how to create and write an effective grant proposal for major gift contributions.
After these sections, I discuss how to sustain your existing donor network, how to create a personal relationship with a supporter, and what to do after the donation has been made (or has not been made), and how to appropriately give gratitude. This guide ends with final thoughts and encouragement that I hope will inspire you to continue to pursue funding for your programs. I have also included my contact information at the end if you have any questions or want to share with me your ideas and experiences.
Use this guide how you see fit for you and your NGO fundraising team. If you are a new and emerging NGO, and have no prior knowledge of fundraising, I advise you to read this guide in full. If you are experienced in seeking one type of funding, use this guide to explore another avenue of funding. Read and become fluent in the sections you and your NGO’s fundraising team need the most. However, I strongly encourage you and your team to utilize all of the different avenues of funding discussed in this guide, since it is important to diversify your financing to ensure the highest possible revenue for your NGO and its programs.
Background and Experience
Financing an NGO is a topic of great personal interest and relevance to me. My goal in writing this guide is to provide encouragement and guidance to all fellow NGO leaders in the poverty and mental health field.
My journey as an NGO leader began in October 2018, when I co-founded an organization called Believe New York (BNY). Due to lack of funding and insufficient manpower, BNY’s work and programs did not officially begin until July 20, 2020, when we restructured not only our leadership, but importantly, our fundraising strategies.
BNY is an NGO, headquartered in New York City, that connects vulnerable individuals and families to resources through our 24/7 GetHelp email and phone service. We also offer a food donation delivery service through our Food First Program, and free counseling sessions over Zoom through our program called The Open Space. Additionally, we host events to directly service low-income and underserved communities. For example, on Thanksgiving Day 2020, during the COVID-19 pandemic, we hosted a Hot Meal Handout in BedStuy; a neighborhood in the borough of Brooklyn, known for being a center of African American culture. During that event, I am proud to say, we handed out over 75 hot meals to underserved individuals and families.
As successful as BNY has been in providing services in a short period of time, we have relied on limited funds from two sources: family members and friends, as well as local canvassing efforts. However, as our organization continues to grow and expand, the need for more funding is not only evident but also critical to the survival of our programs.
Prior to my work with BNY, I worked full-time, for almost two years, as a Program Manager with an integrated fundraising company, Up-Fundraising. In this experience, I managed face-to-face fundraising campaigns for multi-million-dollar NGOs; primarily, Save the Children Federation and Care International, which both focus on reducing global poverty rates and improving health. I also briefly lead campaigns for The Nature Conservancy and ASPCA. This role taught me in-depth about how important donor acquisition and diversified donor programs are to an NGO. I became an expert in face-to-face fundraising strategies, in a wide variety of settings, including during events, on public streets, in parks, and in retail spaces. This time with Up-Fundraising was rewarding in that it advanced my fundamental knowledge of financing NGOs and their programs, and the various strategies and methods to use to obtain and retain these funding sources. In short, I learned NGOs cannot thrive, nor survive, without quality, consistent, and sustainable funding sources.
Prior to Up-Fundraising, I served as the Fundraising Manager, from July 2016 through December 2016, for the national mental illness advocacy NGO, National Alliance on Mental Illness (NAMI-NYS). Although I only worked there for 6 months, I was successful in raising approximately USD$50,000 for their annual NAMIWalk; a charity walk focused on mental health awareness and raising money for their life-saving programs.
Currently, I serve as the Fundraising Chair on the Alumni Board for the University at Albany student organization, Middle Earth Peer-Assistance Program in Albany, New York. I have been involved with Middle Earth for over six years. Middle Earth is a mental health outreach organization. Their programs include a student-run peer-support hotline and a peer-coaching service. In my role as Fundraising Chair, I regularly advise the Alumni Board on fundraising strategies and oversee the methods in action. Most recently, we have been running a fundraising campaign for the 50th anniversary of the organization, which includes an email campaign, producing videos promoting our work, increasing our social media presence, and hosting the virtual 50th Anniversary Celebration this past October 2020, to engage our supporters. Despite the challenges COVID-19 brought this year, we raised tens of thousands of dollars for our programs, with plenty of time left in the campaign.
Certainly, I have come a long way since my first fundraising position when I was 18 years old. In the summer of 2014, I was a door-to-door fundraiser for the NGO, New York Public Interest Research Group (NYPIRG). Since that summer, my experience and knowledge in NGO fundraising and financing has grown significantly. As described above, I’ve had many different types of fundraising experience, and now co-founding an NGO from the ground up. I am combining all these experiences with extensive research in financing NGOs, to organize this guide for growing NGOs to use.
I cannot stress this point enough: financing is the most important aspect of any NGO’s projects and programs.
As vital as funding is for the success of an NGO, one would think that governments would be actively ensuring sufficient funding for NGOs focused on notable causes. After all, governments know that they create and set policy, but implementing that policy and actually providing services to citizens is the work of NGOs. Yet, governments and international financial institutions (IFIs) are not doing enough for NGOs, specifically in the fields of poverty and mental health. Therefore, it is crucial for my fellow NGO leaders to learn how to finance their programs efficiently, outside of governmental grants and international assistance.
Sustainable Development Goals 1 and 3 and COVID-19
The government member states of the United Nations drafted an extensive 2030 Agenda for Sustainable Development, which was adopted in 2015. The Agenda outlines goals to be reached by all countries for the benefit of the people and the planet in 17 critical areas by the year 2030 (United Nations, n.d.). Sustainable Development Goal (SDG) 1 specifies the goal to “End poverty in all its forms everywhere” and SDG 3 aims to “Ensure healthy lives and promote well-being for all at all ages” which includes improving access to mental health as well as physical health.
This guide is useful in the context of accomplishing not only these SDGs, but also the WHO Framework for Action and health systems, and Universal Health Coverage. The ultimate purpose of the SDGs is to fulfill them by 2030 and improve our planet and future. The United Nation’s SDGs and the WHO Framework have created an excellent outline of the problems, and a thorough strategy on how to combat them. This helps us as NGO leaders focus our attention, centralize our efforts, and unify our impact. Thus, its useful to use the SDGs and WHO Framework as a model for our NGO’s mission and programs.
Unfortunately, the COVID-19 pandemic has interrupted progress in both these SDGs, while sadly, the problems in both these areas have worsened (United Nations, 2020). For example, due to COVID-19, the world has seen its first increase in global poverty in decades, whereby over 71 million people were pushed into extreme poverty in 2020 (United Nations, 2020). Additionally, global poverty is projected to increase by 3 percent by the end of 2020 (Dodd et al., 2020).
Further, the pandemic has exacerbated mental health problems and decreased peoples’ wellbeing. Additionally, achieving universal health coverage that is accessible and affordable has become more critical but less possible. For example, it is estimated that approximately one billion people spend at least 10 percent of their household income on healthcare in 2020, and people in low and middle-income countries spend even more (United Nations, 2020). Meanwhile, the extreme reduction of household incomes, because of COVID-19 lockdown measures, are expected to exacerbate these costs and increase not only lack of affordable healthcare around the world but also poverty rates.
Another factor complicates this situation; due to COVID-19, pre-existing mental health conditions and inequalities are further exasperated, and the mental health of vulnerable communities is at greater risk (Kesner, 2020). The increase in poverty combined with the lack of access to affordable healthcare, and rising mental illness rates, are all interconnected and are projected to worsen as the pandemic continues to rage throughout the world (United Nations, 2020).
Lack of Government Funding for NGOs
The lack of funding for NGOs focused on eradicating poverty and simultaneously improving health and wellness worldwide, is unacceptable, given the psychosocial problems issues exacerbated by COVID-19, as well as the fact that the United Nations has identified the eradication of poverty as the greatest global challenge and a necessity for achieving sustainable development (United Nations, 2015),
Yet, helping NGOs be sustainable is critical, says Dr. Judy Kuriansky, Adjunct Professor at Teachers College, Columbia University in New York City, and NGO Representative to the United Nations for the International Association of Applied Psychology and the World Council for Psychotherapy (Kuriansky, 2020), since NGOs are the “boots on the ground” which plan and execute humanitarian projects and programs that firsthand impact communities in need, and directly work to achieve the goals outlined in the 2030 Agenda for Sustainable Development (Kuriansky, 2020; Sustainable Brands, 2016).
Exacerbating the lack of funding, governments and IFIs around the world are even considering budget cuts to lifesaving organizations or being forced to do so, given their own financial restraints caused by the pandemic. Before COVID-19, governments and IFIs provided a majority of the funding to NGOs around the world. IFIs are financial institutions that have been developed or chartered by more than one country’s government. For example, the United States is a member of six IFIs and has contributed the equivalent of USD$98 billion to these six IFIs since 1945 (Sanford, 2005).
IFIs have contributed significantly to the fields of poverty and mental health through the United Nations Developing Programme (UNDP) (UNDP, 2020; Lions Head, 2018). The UNDP oversees the Sustainable Development Goals and is responsible for ensuring that the 17 SDGs can be accomplished by 2030. Since 2010, IFIs collectively contributed over USD$8 billion to the UNDP (UNDP, 2020); however, this funding is not enough, given the growing rates of mental illness and poverty worldwide. Threats of these funding sources being cut is imminent, especially considering the economic hardship COVID-19 has caused.
In the United States, for example, government agencies that fund NGOs threatened to cut 30 percent of their budgets in 2018, before the pandemic hit (KPMG, 2018). Also, in the United Kingdom, the aid budget for NGOs has been cut by £2.9 billion in 2020 alone (Lock, 2020). As a result, almost 200 NGO leaders wrote to UK Prime Minister Boris Johnson urging him not to further cut their aid budget while the country battles the financial impact of COVID-19. The letter states, “At a time when 115 million people look set to be pushed back into extreme poverty, now is the time for an international, collaborative response to COVID-19, as set out in your speech at the UN General Assembly.” The letter further argues that the UK government plays a vital role in strengthening health systems and improving poverty rates worldwide (Lock, 2020). The CEO of Save the Children, Kevin Watkins, said, “We are facing the worst humanitarian crisis in a generation… The UK faces real financial challenges; but cutting aid would do huge harm to the world’s vulnerable people while making little difference to the government’s budget overall” (Lock, 2020).
Now more than ever, in the times of the pandemic and its impacts on the economic and social structures of society, humanitarian NGOs and their programs need more funding, not less.
Additionally, in the time of COVID-19, when more people are developing mental health concerns, mental health aid is still dramatically underfunded and continues to be forgotten (Kesner, 2020). Although the World Health Organization (WHO) widely recognizes that mental health is a critical aspect of one’s overall health, on average countries spend less than 2 percent of their health budget on mental health access and care (Iemmi, 2019). In low-income countries, less than 1 percent on average of their health budget is spent on mental health programs (Ryan et al., 2016). Mental health problems place a huge burden on global health, where 14 percent of the global burden of disease is attributed to mental health problems (Prince et al., 2007). Despite this burden, mental health organizations only receive a fraction of funding from governments compared to NGOs whose focus is on other diseases (Global Citizen, 2020). Sadly, mental health aid is underfunded no matter how you compare their budgets. According to MacKenzie and Kesner (2016), more money is spent on coffee every week in the UK than expenditures on funding mental health programs in low and middle-income countries.
In this context, other reports present a more positive view. A report by financial researchers Dodd, Breed, and Coppard (2020), mentions that some IFIs reported a rise in aid to countries with high levels of extreme poverty. In this report, notably, the African Development Bank (AfDB) increased its aid to these countries from 49 percent to 54 percent between 2019 and 2020, and the World Bank increased its aid from 20 to 26 percent. Although these trends seem promising in light of the COVID-19 pandemic, the authors implicate that aid to low-income countries with the highest levels of poverty are not improving in general. Further, they emphasize that the failure to target financing resources effectively will push these countries further behind and deeper into financial hardship. The report concludes that unfortunately, despite some IFIs showing increased aid in 2020, overall data does not suggest aid providers are rising to the global challenges, especially in face of the needs exacerbated by the COVID-19 pandemic (Dodd et al., 2020).
Altogether, these factors and statistics prove the need for NGO leaders to learn, and become fluent, in alternative financing strategies outside of governmental support and international assistance, to ensure their life-saving projects and programs can stay afloat and flourish.
My message is loudly to my colleagues: Do not allow the COVID-19 pandemic to discourage you and your team from completing your mission and moving forward. Instead, take advantage of this tragic situation and produce something incredible and meaningful that will change the lives of countless people. Those of us who found NGOs are driven by passion and dedication towards improving an issue or advancing a specific cause. Now, faced with consistent lack of funding, and increasing threats of budget cuts, we NGO leaders must develop a new passion: a passion for fundraising.
Developing a Fundraising Plan
First and foremost, whether you are a new, or developed, NGO, you must develop a fundraising plan. This section is based on knowledge from the helpful book, Effective Fundraising Strategies for Nonprofits (Bray, 2016). In order to be organized and efficient, the fundraising plan must be created and utilized in conjunction with other types of planning that the NGO engages in, such as strategic planning, program planning, event planning, and budgeting.
The most effective fundraising plans capture tasks and goals within the next year but can include plans for up to five years. A plan over five years is good to keep in mind but is difficult to tangibly obtain and achieve.
Every successful fundraising plan has four key elements (Bray, 2016):
The reasonable dollar amount, namely, your fundraising goal, should be based on your annual budget (Bray, 2016). Of course, I would love to tell you how much money your NGO is going to raise in a given year, but that is not possible. Instead, start by constructing an annual budget that takes into account how much money your NGO will need to develop programs and maintain infrastructure. The annual budget should be made by evaluating how much money was raised last year compared to how much money can be reasonably raised this year, and with how much money the organization’s programs and infrastructure can actually function on (Bray, 2016). Considering these points realistically, combined with future program development goals, will bring you and your team to a reasonable total dollar amount for the annual budget. With this budgeting and strategic planning, this total amount tells you how much must be fundraised that year.
This task can be daunting, especially when your NGO is just starting out. This is why it is so important to keep these two tasks integrated:
Especially in the COVID-19 pandemic, when resources are limited, it is important to be reasonable when planning your budget and your future programs.
Once you have developed your annual budget, it is time to outline the fundraising plan. This involves identifying your key assets, which can include staff with fundraising experience, staff with grant writing skills, and passionate volunteers. Then, you are ready to create and document a reasonable fundraising strategy that works with these assets.
Introduction to Fundraising Strategies and Software
There are many different strategies and avenues a new or well-established NGO can take to fundraise and finance their programs.
An important step is to identify sources for funding. Three distinct groups an organization can look to for funding are: individuals, businesses, and foundations (Bray, 2016). These three groups will be discussed throughout the remainder of this guide, with their corresponding fundraising strategies.
In truth, there is no one best strategy for an NGO, since all or some of these strategies should be planned in a way to ensure that they work collaboratively with one another to produce the most effective fundraising plan and outcome. However, regardless of which fundraising strategy you plan to implement, the process will be inefficient without an integrated fundraising software or donation management system that helps to manage and organize the fundraising strategies and financing operations.
Many new NGOs may be quick to keep donor records themselves. But this method will prove to be very time-consuming and easily vulnerable to making mistakes, which can be avoided by an alternative method. When I worked with NAMI-NYS, we used a platform called DonorDrive, which helped manage the donations, record every amount, and efficiently organize the donors contact information for sending mailings and event invitations. At Up-Fundraising, we used a system called Waysact by Evergiving on electronic and portable tablets to help create fundraising campaign forms and communicate with donors. These platforms saved us a lot of time and energy, to allow us to focus instead on our programs, which is what really mattered to us. By using fundraising software and donation management systems, a fundraising campaign targeting donors, that would normally take two weeks manually, can easily be completed in 15 minutes (Bray, 2016).
Fundraising software can help with many tasks, from managing and organizing donor information to creating platforms for donors to make donations, to event management, and distributing tickets and invitations. Such use is extremely efficient and does not need to cost a fortune. For example, TechSoup offers free and discounted software to nonprofits, at http://www.techsoup.org (TechSoup, 2020). Sullivan, (2018) notes that before committing to a software or management system, it is important to look into its features and to ensure that it is exactly what your NGO needs. Some systems have functions which may not be applicable for your NGO, while others may not have the systems you need for the fundraising strategies you plan to implement. In other words, take extra care to ensure the software you’re interested in is appropriate for your fundraising plan. Once your software is up and running, fundraising can start.
The Art of Fundraising
Many people, including myself, who have been in the fundraising field will tell you that fundraising is truly an art. In fact, fundraising is not really even “fundraising” at its core but is storytelling. This means that fundraising is not about simply asking people for money, but about connecting on a personal level and telling an inspiring story about you and your cause (Phoofolo, et al., 2011). At a one-day Communications Workshop entitled: “Finding Funding for NGOs in a Challenging Global Economy” hosted by the United Nations Department of Public Information Non-Governmental Organizations (DPI/NGO) Relations Cluster, Mr. David Andrews, of David J. Andrews Associates LLC, said, “the best fundraisers are good storytellers.” In fact, he said, the six most powerful words in fundraising are: “Let me tell you a story.”
For example, when I fundraised for Save the Children’s programs at the US-Mexico Border detention centers, I often told stories of both my personal and learned experiences of immigration from Latin America. At the time, Save the Children was providing relief to these children by giving them hygiene kits and mental health support. While I was fundraising, I would tell stories about my own relatives who immigrated here from Colombia for a more comfortable life. Although I am multi-ethnic, I focused on my great grandfather who came to the US from Colombia and opened a small bodega in Harlem, New York. I used this story to engage supporters and show potential donors that immigrants are coming to our country for a better life and deserve humane treatment. I would also share stories I read about families living through terrible conditions in Latin America and use vivid imagery to inspire supporters to take action and help these children in the detention centers that have been separated from their parents.
According to Sandy Rees, founder of Get Fully Funded, an organization that helps fund NGOs, and partner at the Foundation Group, (2017), we have been conditioned since children to listen to stories. Thus, telling the story of your NGO in an inspirational way that will undoubtedly engage a potential donor. To do this, whether you are in-person or online, start with a powerful “elevator pitch”, which refers to a 30-second introductory version of who you are and what your NGO does.
Storytelling is impactful in all forms, whether in video, in writing, and/or face-to-face (Rees, 2017). It is important to leave out “the jargon” (insider words that may not be understood by the potential donor) and instead, to use understandable terms and words. This pitch should communicate your message clearly, about how your NGO is changing lives and improving the world. Share a story about a specific person or community your NGO has helped, as in my example above, since human interest stories captivate people’s heart and make them more willing and interested to participate and help.
Tell the potential donor about the people or community you are serving. You can add information about the issues your NGO addresses – in my case that would involve the facts of poverty and the lack of mental health care – but connect even that to the stories of the people. Remember that the best stories are short, honest, passionate, inspiring, and interesting to the listener (Rees, 2017).
Relate the story to the potential donor and their personal experiences, since storytelling is most effective if you tailor your story to the audience you are pitching to (GoFundMe, 2020). This point about the storytelling model is a foundation of all successful fundraising strategies.
Regardless of how powerful your story is, or to whom you are telling it, you still need follow the story by completing the task that arguably is the most difficult aspect of fundraising: asking for the donation. Asking for the donation can be intimating, but it is obviously the most vital part of fundraising – since you need to raise the money.
In asking for the donation, significantly, you must create a sense of urgency. Make it clear that you need money, today and now. Without this sense of urgency, potential donors may wait and consider whether to donate, requiring that you make another pitch to ask them to donate (GoFundMe, 2020). Stress this urgency towards the end of your story in order to ensure the potential donor’s attention and secure donations as quickly and efficiently as possible. In your pitch, explain a dire outcome if they do not donate, in my case, the negative outcome for children in poverty. Urgency is created using strong language, such as “now,” “today,” “immediately,” or even the word “urgent” itself. Especially in the fields of poverty and mental health, stressing urgency is critical to saving lives, allowing you to emphasize that their donation could literally be the difference between life and death. You can say, “This is why we need your donation today, to ensure these children can have food tonight.”
Be mindful that discussing negative outcomes can always be framed in a positive light (GoFundMe, 2020). For example, when discussing the high rates of depression worldwide, as a fundraiser you can stress the importance of mental health care and how their support can help reduce these rates.
My fundraising team and I often had to frame negative situations in a positive light, and stress urgency, when raising money for environmental impact projects with The Nature Conservancy. It’s no secret that we need to take action on climate change soon, so stressing urgency was natural when all we had to do was remind potential donors what’s at stake if they don’t donate to help plant trees and clean the oceans. But, neglecting environmental needs will create a negative outcome that is impossible not to address when speaking with a supporter, we had no choice but to frame these outcomes in a positive light. We used to say, “It’s not too late to reverse the outcomes of climate change with your donation today” Or “Helping us plant trees today will benefit us in 20 years when they fully grow. With your donation, we can plant them now to improve our future.”
Similarly, be creative with how you ask for donations. Add photos, videos, songs, and/or poems, or anything you can think of that will grab the audience’s attention and augment the story relevant to your donation drive. There is no formula for how to make an ask creative, so, experiment with different ways until you find one that works for your NGO and appropriately displays the populations you serve.
In addition to being creative, always ask for a specific amount, with tiers and an option to enter any amount. Specific and meaningful asks are crucial to a successful fundraising strategy because it takes the burden off the donor to figure out how much to donate, and how much money is needed for what purpose (Rees, 2017). Rees, (2017) emphasizes that since donors do not know as much as you about your campaign and program goals, it is vital that you be specific when asking for money. For example, “Donate USD$30 today to help us provide mental health assistance to people who need us now.” Or you can be more detailed with how the money is being used. For instance, “A USD$100 will help us provide one young girl with school supplies for a year.” This specificity is also shown through “Symbolic Numbers”, or meaningful donation amounts that reflect the magnitude of the issue.
I used the “Symbolic Numbers” method a lot at Up-Fundraising. Symbolic numbers are a great way to engage donors and allow them to make a meaningful donation. In the efforts of our organization, we saw that donors who gave money when we provided symbolic numbers were more likely to donate again and to retain (repeat) their donations for months or even years. Symbolic numbers are donation amounts that reflect a statistic or number relevant to the issue or NGO in question. For example, donors can donate USD$25 to symbolize the roughly 1 in 4 or 25% of Americans who have a mental health disorder (John Hopkins, 2020). Or, at Middle Earth Peer-Assistance Program, we suggest that our donors donate USD$20.20 to reflect 2020, the year we are celebrating our 50th Anniversary. These numbers don’t need to be small; this method can be transferred to any amount, or type of funder (i.e., foundation, individual, and/or philanthropist). For example, one could donate USD$69,000 or USD$6,900 for the 690 million people who go to bed on an empty stomach every night (World Vision, 2019).
Providing options for sponsorship tiers and assigning titles for specific amounts is also a popular fundraising method that may attract larger donors. When working with NAMI-NYS, we had levels that donors could join by donating that amount. For example, a diamond, gold, silver, and bronze level. You and your fundraising team can come up with the unique levels and amounts. If a supporter was to donate up to USD$250, they would be in the bronze level. If they donated USD$250-$750 silver, USD$750-$1,500 gold and anything higher than USD$1,500 would be diamond, for instance. Each level would come with their own benefits. With Believe New York, we offer our highest donors a free merchandise item from our store, and name recognition in our newsletters. Using these sponsorship tiers is a great way for you and your team to be unique and creative while providing incentives for supporters to get involved and stay involved.
In summary for this section, in defining fundraising as an art, it is actually a beautifully structured art, with many different ways to construct the masterpiece. Telling an inspiring story, as well as being urgent, specific, symbolic, and creative, are all methods transferable to any group of donors and fundraising strategy. However, some groups of donors, such as businesses, companies, private philanthropists, and foundations, may require more convincing than just simply the methods illustrated above. For some of these donor groups, the art of fundraising quickly becomes more of a business negotiation or an investment. Since a large portion of an NGO’s contributions come from these donor groups, colloquially known as “major gifts,” it’s important to discuss how to develop a funding model and address these types of donors, as will be discussed in the next sections.
Building a Funding Model
A solid funding model for an NGO is a necessity for NGOs who seek major gifts from businesses, companies, private philanthropists, and foundations. Ms. Luz Rodriguez, Training Coordinator at The Foundation Center, emphasizes the importance of proposal writing and being a good financial manager with a solid business plan (Phoofolo, et al., 2011). These donor groups do not fund “needy charities” anymore; instead, they seek viable business partners. Thus, when following this funding model, remember that donors are not customers – explaining why the term for this model is funding model, not business model.
According to William Foster, partner at the Bridgespan Group, an NGO financing consulting firm, and colleagues Peter Kim and Barbara Christiansen (2009), a business model incorporates choices and structures about costs and values, while a funding model focuses only on funding, and exactly how these funds will work to move their program and services forward. This may seem overwhelming to NGOs without a solid business or “for-profit mindset”, but in a for-profit world, it is crucial for successful NGO leaders to develop this mindset. According to Foster et al. (2009), philanthropists are becoming more hesitant about funding NGOs because funders often struggle to understand the impact and limitations of their donations. Therefore, when addressing these donor groups, the key is to write a clear and detailed proposal addressing where the money will be going, and how each dollar will be spent.
Mr. David Andrews, a fundraising expert from David J. Andrews Associates LLC, agrees. At a workshop held by the United Nations Department of Public Information/NGO section, these donor groups want to see new ideas and solutions to worthy causes, and how these ideas are relevant to current events (Phoofolo, et al., 2011). Most importantly, these donor groups want to see that your NGO can help them complete their agenda and their priorities. Hence, funders seek leverage when deciding on which NGOs to fund. Keeping this in mind, NGOs must write a clear and detailed proposal when seeking these major funders.
Additionally, NGO leaders should create and utilize fundraising models, such as the 10 models presented by Foster et al. (2009), to improve their fundraising and management, especially when approaching major donor groups. The 10 fundraising models include: Heartfelt Connector, Beneficiary Builder, Member Motivator, Big Bettor, Public Provider, Policy Innovator, Beneficiary Broker, Resource Recycler, Market Maker and Local Nationalizer. But you don’t need to use these 10, you can and should develop your own funding model that is unique to your NGO’s fundraising plan.
Business and Corporate Giving
Businesses and companies, without a doubt, have their own approach to give back and help NGOs and their community. Business and corporations, depending on their size and revenue, can give either major gifts (over USD$2,000) or minor gifts (under USD$2,000). This section of the guide offers a detailed overview of small business and corporate giving. There is not onebest method to use, so all these methods should be used collectively and adjusted according to the individual business or company. It is also recommended to have a business and/or corporate outreach liaison (person) within your NGO so that these donor groups can contact, ask questions, and coordinate donations through them efficiently (Conlin, 2020).
Remember that when addressing donors such as businesses and companies, it is important to think of them as a business partner, rather than a donor. With this mindset, businesses and companies will be more inclined to work with you and trust your NGO with their contributions. Then, you will be able to work with them to find a donation amount that makes sense based on both of your goals.
According to a survey, three quarters of small business owners donate a percentage of their profits to NGOs (Preston, 2008). Interestingly, the survey found that the companies with highest revenues were the least generous, with only 69 percent of companies that earn more than USD$1 million a year contributing a percentage of their profits to NGOs. Meanwhile, 80 percent of businesses that earn between USD$250,000 and USD$1 million give to NGOs, and 77 percent of companies that earned less than USD$250,000 give to NGOs (Preston, 2008). This study shows that small businesses do give to charity, sometimes more than larger companies; thus, you just need to find the right ones to ask. In fact, small businesses donate an average of 6 percent of their profits to charities (Conlin, 2020).
However, in the time of COVID-19 shutdowns, when small businesses have been hit the hardest, it can be difficult to secure these donor groups. One of the most attractive aspects of giving to NGOs for small businesses is the tax benefit. Therefore, encouraging the tax-deductible aspect of the donation to small business owners may encourage them to give during such a pandemic or difficult financial and economic time, despite the hardships and possible financial setbacks. The tax benefit they receive is based on how much they give, and their business revenue. So, if they want a larger tax write off, it makes sense for them to give a larger amount.
Despite the tax benefits, small businesses also give to organizations that they believe in and that fit their business values (Conlin, 2020). For example, it makes sense for a clothing company – in the business of selling clothes – to give money to charities that focus on providing clothing to low-income families, or for a health corporation – that focuses on providing healthcare to people – giving to charities that improve mental health access.
Thus, as an NGO leader in 2021, one important step you can do to raise money from this donor group is to target small businesses that fit with your values and goals. Doing this can be as simple as running a Google search on a particular business, and researching about them online, or even speaking with owners and employees from that business. Another tip that NGOs can use to attract more small businesses, is to give them something in return for their donation, aside from tax deductions. For example, offer promotions on social media and/or display of their business on your website. This may be appealing for a small business struggling to get their name more well-known, or one that wants more positive publicity.
All and all, small businesses may be a challenging donor group to approach during the pandemic, but they are not impossible to reach if your NGO targets businesses that align with your values, and if you offer them something, that encourages and rewards the donation. The pandemic has created tough times for everyone, so NGOs can show solidarity to those small businesses, that “We are all in this together.”
Corporate giving has always been a staple aspect of NGO financing. These major gifts can come from sponsorships, grants, and/or matching gift programs (Sullivan, 2018). Corporate giving plays such an integral part in any successful NGO fundraising plan because NGOs benefit from the resources companies have to offer, while companies benefit from being affiliated with a notable charitable cause (Sullivan, 2018).
Morgan Simon, Senior Contributor at Forbes, an American business magazine, is optimistic that this time of the COVID-19 pandemic is actually a great time for corporations to give to NGOs. In fact, in the United States, the CARES Act (the two-million-dollar federal stimulus response to COVID-19) indicates a desire for people, especially foundations and corporations, to support NGOs in this time of economic hardship and uncertainty (Simon, 2020).
Under the US CARES Act, the limit of an annual cash gift was increased from 10 to 25 percent of corporate taxable income (Simon, 2020; and US Congress, 2020). In other words, corporations can receive a higher tax break for their charitable giving. This was put into place for the purpose of increasing the amount of funds that go to NGOs on the ground who need financial support and assistance (Simon, 2020). With this added incentive, the pandemic is a good time for corporate philanthropy. Unfortunately, corporate giving can be hard to obtain, considering the vast number of NGOs competing for funds. So, it is important for an NGO to set itself apart from the rest, to build a solid funding model, and to spend adequate time on the proposal and/or application for financing.
One of the most popular methods of corporate giving is through corporate sponsorship. Corporate sponsorship is when a corporation provides the necessary funds for a specific event, program, or goal, in return for name recognition and promotion on all related marketing materials and disbursements. No actual money is given. Corporate sponsorships can be in various forms, including episodic and market-driven methods, such as through specific events, campaigns, or projects, or in more long-term commitments to the program or cause (Fritz, 2019). According to Mazarine Treyz, founder of Wild Woman Fundraising and NGO coach, corporations decide to sponsor for many reasons, mostly to improve their marketing and branding, and to get ahead of their competition. Achieving corporate sponsorship is not as difficult as it may seem, but in today’s competitive market, an NGO must properly position and market themselves to the corporation.
Corporations need to see proper and effective marketing strategies of the NGO, especially if their company name is going to be displayed on these items or in connection and partnership with the NGO. Therefore, all materials (media posts, banners, postcards, invitations, newsletters) must be creative, organized, and polished. Once these materials are created, the next step is to determine how to market the event or project, and how many people are expected to view these materials (Treyz, 2019). Corporations want to see the plan to not only market your NGO but also market them and their brand before they commit to a sponsorship with your NGO. Determine approximate numbers of how many unique site visitors you expect (how many new people visit your website), how many ad-impressions you anticipate, and how many people will see, hear, talk and interact with the event or program (Treyz, 2019). This is often referred to as how many “eyes” are on the campaign, equivalent to advertising dollars the business would spend on a traditional campaign or “ad buy.” Corporations will not commit to sponsoring your NGO without a thorough marketing plan.
Additionally, you must properly position your NGO and the event or project for which you seek sponsorship. For example, if you are seeking corporate sponsorship for an event, you must position your event as different than other NGO events (Treyz, 2019). Ask yourself, “What is unique about our event?” and “What is interesting and different about our event?” If you can’t answer these questions, you must go back to the drawing board and create uniqueness that will set you apart from other organizations. Once this is done, articulate those answers in all applications materials, so you can appropriately display the value of your event or program to this corporation. Similarly, you must also position your NGO itself. For instance, if you are an NGO focused on mental health, ask yourselves, “How are we different from other NGOs with the same goal?”
I say this loudly: do your research on which businesses fit your organizations goals and values and what they may already be doing to improve the issue. For example, if you are a mental health-related NGO, look into the corporation you seek sponsorship from and see if there is a mental health employee group or club. If there is, you should certainly reach out to them and ask about their initiatives. This helps build a personal relationship. Furthermore, search for people, who support your cause, that can advocate for your NGO within the company if possible (Treyz. 2019).
It is also recommended, during these pandemic times, to explore how companies get involved with a cause by being creative, as mentioned in an above section. For example, in 2017, Lyft, the ride-sharing transportation company, offered a program where their drivers can submit an application to donate half of their fares for four weeks to the NGO of their choice (Sullivan, 2018). As another example, the popular hotel chain Marriott celebrated its humble beginnings as a root beer stand in 1927 as a way to raise money for an NGO, whereby donors were able to buy a scoop of ice cream and a can of root beer on National Root Beer Float Day (August 6), and all proceeds went to Children’s Miracle Network (Simon, 2018). Since Root Beer Float Day’s beginning, Marriott International Hotels has raised over US$120 million for the charity (Erowley, 2018).
Another way companies may choose to give is through corporate grants. Corporate grants are similar, and sometimes identical, to the funding option of corporate sponsorship. These grants are local, state, or national grants that larger companies give to eligible NGOs, issued usually as part of their corporate philanthropy or corporate social responsibility (CSR) efforts (Fritz, 2019). Alternatively, companies may have a private foundation within their company run by board members or corporate officers (Fritz, 2019).
Regardless of the method, CSR has become more important in recent years because most consumers prefer to buy from socially responsible companies (Fritz, 2019). There are literally countless companies that offer grants; thus, it requires doing the research to find the ones that your NGO is eligible for. These grants are accessible through an application process that can be grueling, sometimes taking months to complete. However, if you put in the time and effort, you will see results and will be rewarded, more often than not, with a sizeable donation. I will discuss this in more detail in a later section of this guide, about building a unique and effective grant proposal.
Large companies may also choose to run a matching gift program. A gift-matching program is very popular towards the end of the year and holiday season. In this program, a company matches their employees’ donations (which means they essentially double their contribution). For example, once an employee makes a contribution, they submit their receipt and donation information to the company’s department that handles the program (Double the Donation, 2020). Then, once the donation has been completed and certified, the company writes a check to the chosen NGO with the same amount (or more, based on a per-determined equation) as the original employee donation. Matching gift programs encourage companies to exercise their corporate philanthropic goals, while helping an NGO raise double the amount of money of a donation.
These programs also help the donor give an increased amount (e.g., double, or even triple) of their initial donation without spending more of their own money (Double the Donation, 2020). This becomes a win/win/win scenario for all parties: the donor, the NGO, and the company. Once the company decides to participate in this type of program, they then have to let their employees know that it exists. As an NGO leader, I suggest that you encourage donors to find out if their company has a matching-gift program. As an NGO, you can also promote programs, of which you are aware, to a company to encourage them to institute such a program.
Private Philanthropists and Foundations Contributions
Foundations come in various sizes and types, but irrespective of size, their contribution can be substantial and significant (Fritz, 2019). To clarify, this section pertains to major gift contributions, and achieving donations and grants over USD$2,000. More often than not, these grants and funding sources are accessible through an application process. In fact, over USD$50 billion is awarded by foundations to NGOs every year (Charity Navigator, 2017). There are three main types of foundations: corporate, family or private foundations, and community foundations. Corporate foundations go hand and hand with corporate sponsorships and grants that were discussed in the previous section. In this section, funding from community foundations, private foundations and individual philanthropists, is discussed.
These funding sources can be a bit more difficult to receive, but if successful, will provide a sizeable contribution to your NGO that may last longer than a single fiscal year and become a major donor. Thus, it is crucial for NGO leaders to learn about the types of philanthropists and foundations, to effectively receive funding from these major donors.
Community foundations are some of the most popular financing sources NGOs seek. Community foundations, also known as public foundations, combine the resources from many funders to help their cause (Fritz, 2019). Community foundations are very active in providing donor-advised funds to large funders who want to donate to organizations they care about, but who don’t want to go through the process of developing their own private foundation (Fritz, 2019). These foundations are actually usually nonprofit organizations themselves, or are run by a nonprofit, as way to broaden their reach and to help other organizations receive funding (Double the Donation, 2020). Most of these foundations work to improve their local communities and give funds through not only grants but also scholarships.
Additionally, community foundations often organize “giving days” to help local NGOs raise money. For example, Arizona Gives allows local NGOs to register and receive funds after they’ve raised money on their annual giving days. To date, Arizona Gives has helped raised more than $23 million for Arizona’s NGO sector (Arizona Gives, 2020).
With this in mind, community foundations present an excellent source of funding, especially for new and growing NGOs. One of the most notable community foundations is the New York Community Trust, which focuses on ending hunger and improving women’s health, amongst other initiatives.
Community foundation grants or scholarships are applied for, and gifted, annually. Some community foundations may decide on the grant amount to the NGO they choose internally without any application process, meaning, the leadership of that foundation decides on their own who receives funding from them. Most community foundations have an intense application process which includes submitting detailed program information, proposals, and sometimes interviews. If you are fortunate enough to receive this type of funding, this can become a steady stream of revenue that lasts for years, which is extremely valuable for an NGO. Thus, it is critical to spend the needed time and care in writing the proposal and developing the application materials when applying for funding from these community foundations.
Private foundations, which are also family foundations, are very similar to community foundations, with the only true difference being the source of income (Double the Donation, 2020). Private or family foundation grants and scholarships are usually created from endowments from wealthy families, corporate board members, or private philanthropists (Frtiz, 2019). Some of the most well-known and wealthy private foundations that focus on mental health and poverty include The Bill and Melinda Gates Foundation or The Rockefeller Foundation. It is worth mentioning that health is the primary sector receiving funds from private foundations and philanthropists, giving 53 percent of funds from 2013-2015 (Lion’s Head, 2018). The Bill and Melinda Gates Foundation is notably the largest donor, at 72 percent total philanthropic giving for health, mental health and reproductive health care (Lion’s Head, 2018).
Private foundations and community foundations have similar philanthropic goals, namely, to service the community, but private foundations, especially wealthier ones, sometimes a more wide-ranging international reach. Don’t let this discourage you, as there are limitless private foundations out there. Although numerous foundations have endowments in the billions of dollars, there are much smaller foundations that tend to fund local, community NGOs (Fritz, 2019). These foundations may have little-to-no professional staff and are more inclined to give funds to growing NGOs that focus on their hometown community (Frtiz, 2019). However, most of these private foundations have similar rigorous application processes as community foundations. Therefore, it is important, as mentioned above for community foundations, to take extra time and care in developing the grant proposal and writing the application materials. In this way, your NGO can remain competitive against other notable organizations seeking funding from these foundations.
During the COVID-19 pandemic, private foundations have been called upon to give money and invest in NGOs even more urgently because of the crisis caused by the pandemic itself (Simon, 2020). While foundations are not “explicitly incentivized” in the US CARES Act, many private foundations have been urged to step up their philanthropic efforts (Simon, 2020). Although some private foundations have had to put a freeze on their aid until they create a strategic plan for giving, others have responded to the need and significantly increased their giving. Notably, the Mary Reynolds Babcock Foundation, which focuses on partnering with organizations to alleviate poverty, has committed to doubling their annual giving as a result of the pandemic (Schneiderman, 2020). Accordingly, many foundations have streamlined or minimized their application requirements and reduced barriers to receiving funds (Simon, 2020).
Individual and private philanthropists are the most encouraged donor group during this COVID-19 crisis by governments (Simon, 2020). This is especially the case in the United States, where, as pointed out above, with recent changes in tax code that specifically apply to wealthy individual philanthropists (Simon, 2020). According to Section 2205 of the Tax Code, there is no limit to the deductions an individual can take for charitable donations if you itemize, or list out explicitly, your contributions (Simon, 2020; and US Congress, 2020). Prior to this change, individuals could only deduct 60 percent maximum of their adjusted gross income (AGI) through donations. Now, 100 percent of the donation is deductible. This means that, for example, if an individual’s taxable income is USD$500,000 in 2020, and they donate USD$500,000 to official 501(c)(3) nonprofits or NGOs in 2020, these individuals will not have to pay any taxes on their income. However, this tax benefit only applies to cash gifts, and does not apply to foundations or donor-advised funds. Regardless of this restriction, this change is a huge incentive for wealthy individual philanthropists seeking to help charities during the pandemic.
It is important to note that most individual and private philanthropists donate to either their own foundation they founded, or to another community or private foundation (Double the Donation, 2020). For example, the Stavros Niarchos Foundation is a foundation started by Greek philanthropist Stavros Niarchos, recently working on increasing mental health care throughout Greece and the world, during the COVID-19 crisis. Philanthropists also sometimes give directly to NGOs. For example, famous guitarist and vocalist David Gilmour from the rock band Pink Floyd, sold his London home in 2003 for £4.5 million and then gave his money to the British NGO, Crisis, focused on helping people experiencing homelessness in the UK (The Independent, 2002).
Another example of private philanthropist is MacKenzie Scott. The ex-wife of Jeff Bezos, CEO and founder of Amazon. Scott is the second-wealthiest woman in the world and has certainly given back to her communities with her fortune. Unlike the Bill and Melinda Gates Foundation, and other wealthy individuals, Scott does not have a foundation nor a website. Since her divorce to Jeff Bezos last year, Scott has donated over USD$6 billion in 2020 alone, and mostly has given to small charities and NGOs focused on ending poverty and improving health (Kulish, 2020). Scott, Gilmour, and Niarchos are just three examples of the innumerable philanthropists in the world. Indeed, there are so many options for private philanthropists and many ways to get in contact with them. All you need to do, as an NGO leader, is find them. Searching for these philanthropists is discussed in more detail in the below section.
Searching for Foundations and Philanthropists
It can be overwhelming to search for private or public foundations, or to find individual philanthropists. But all things considered, funding is available for NGOs, even during the tragic pandemic. The process requires passion and persistence. The key is to find foundations and philanthropists, just like when searching for corporations, that fit your NGO’s goals and values.
I highly suggest using search engine. An excellent, and low-cost search engine about foundations that NGOs in the United States can use, is Candid. This search engine allows searching for foundations or Grantmakers around the country, accessible at www.candid.org. In Europe, the European Foundation Centre offers a similar service at a low-cost to NGOs, accessible at www.efc.be.
Here are a few other recommendations:
Creating Grant Proposals
Once you search for, and find, foundations, corporations, and philanthropists which are the right fit for you, the next step is to create the grant proposal and complete the application that appropriately highlights the work your NGO accomplishes or hopes to accomplish. I cannot stress enough – the most important part about seeking funding -- whether from a philanthropist, corporation, and/or private or community foundation -- is applying to a funder who fits your NGO’s goals and values. For example, it does not make sense if you are an NGO focused on ending poverty, to apply for a grant focused on aiding efforts to combat climate change.
Carolyn Skyrm, a 25-year professional fundraiser for international NGOs stresses the importance of writing donor-specific proposals (Phoofolo, et al., 2011). As I’ve mentioned in sections above, your proposal must relate to the overall mission of the funder. Towards this end, a personal touch is always valuable, if creating such a relationship is possible. You can get to know your funder by talking on the phone or over Zoom to learn about them and their values (Tabeck, 2020). This is where the art of fundraising model – that I mentioned above – comes in, where you tell your story. Storytelling adds an important human connection to the proposal, that many NGOs neglect to do (Tabeck, 2020). Tell your story, emphasize the importance of your work, and display well-polished marketing materials or other materials which augment your story.
Also, be sure you are answering the questions addressed in a formal application. Daria Tabeck, Lead Product Designer at Flipcause, an NGO management company (2020), notes questions all grant proposals require answers to, including:
Tiedan Haung, a grant writer for the Center for Developing Urban Educational Leaders, outlines what should be included in every grant proposal, including an introduction; mission and vision of your NGO; specific needs of your NGO and/or the program; capabilities and feasibility of your work; goals and objectives; impact of your work; and how you plan on implementing and evaluating the impact of these goals and objectives (Phoofolo, et al., 2011). Donors always want to her about results. And of course, describe your funding model in detail.
Also, as described in an above section of this guide, use simple and effective language to “sell” your NGO and/or program to the donor (Tabeck, 2020). In other words, do not use trite wordings, jargon, “flowery” or overly complicated language in your pitch and proposal (Tabeck, 2020). Be concise, detailed, and thorough.
Ask several people to review your grant proposal before submission. These advisors can preferably know something about your subject, but in fact, any intelligent person can help you in this step as what you are looking for is feedback about whether your pitch is understandable, and whether this person feels inspired to invest in you (Tabeck, 2020).
Double the Donation (2020), suggests, especially if your NGO is growing, hire a professional grant-writing resource if you need help. If your staff members do not have experience in grant writing, there is no shame in hiring a professional grant writer for help – if your budget allows (Double the Donation, 2020). An affordable grant writing service for NGOs is Professional Grant Writers – they offer a free consultation and price estimate (Professional Grant Writers, 2020). If this is not within your budget, are plenty of free-lance grant writers who charge reasonable prices. If hiring someone to help write your grant proposal is the most cost-effective and productive, make sure you fully brief them on your NGO, to appropriately and effectively showcase your NGO’s story, strengths, and aspirations.
Post-Grant Proposal Submission
If you are fortunate enough to receive grant funding, Skyrm strongly suggests consolidating the relationship. Contact the donor immediately in person, over the phone, email, and/or letter, and thank them for their generosity. Then, be sure to clarify their donor reporting requirements and preferred means of reporting recognition of the contribution, and clarify the use of the budget (Phoofolo, et al., 2011).
If you did not receive funding within a particular grant, do not see this as the end of the world. Be reassured that there are other grants and grant cycles to apply for. It is a good idea to contact the funder anyway, and thank them for considering your proposal (Phoofolo, et al., 2011). Furthermore, you can kindly ask for feedback as to why your proposal was not funded, how you can improve, and if it is worthwhile to apply again in the future and even ask them if they want to be included on your NGOs mailing list. In other words, it is worthwhile to keep in mind the advice to “Keep asking!” (Phoofolo, et al., 2011) since you never know the kind of support you might acquire; especially in a pandemic when people might be feeling sympathetic to others’ needs and want to help others.
Persistence is again the guiding quality, to keep searching, writing proposals, and asking. Eventually, you will receive support you need from a funding source.
Individual, smaller, contributions from people in the public are an extremely important funding group. In this section, individual contributions are minor gifts or anyone who donates less than USD$2,000. This is not to be confused with individual and private philanthropists or major gifts in the previous section. These two are different because, as discussed in the prior section, private philanthropists usually need carefully articulated proposals to acquire donations. Meanwhile, the smaller, individual contributions discussed in this section are sought differently than major gifts.
Although NGOs receive financing from all different sources and donor groups, individual contributions and minor gifts are the largest source of charitable donations for NGOs, especially in the US (Fritz, 2019). This is because NGOs and nonprofits, or 501(c)(3) charities, need to receive a large part of their support from the public to help them qualify for tax-exemption status by the IRS in the US (Fritz, 2019). According to Giving USA (2019), the total charitable donations in the US reached more than USD$427.71 billion in 2018, and of that amount, 68 percent came from individuals and minor gifts. Real, everyday people who support your organization can be the bread and butter of your support system (Bray, 2016). Within this section, I will outline multiple different fundraising strategies your NGO can use to engage this donor group during the pandemic.
Reoccurring Giving and Memberships
One of the best and most prominent ways to engage and retain individual supporters is through reoccurring giving, meaning weekly, monthly, quarterly and annual donations (Double the Donation, 2020. Another similar model is through memberships. Essentially, these operate in a manner as their name implies – reoccurring donations that donors choose to make on a regular basis (Double the Donation, 2020). Many integrated fundraising companies, such as my past employer, Up-Fundraising, primarily use the reoccurring giving or membership model to acquire long-term supporters or “sustainers” for a given NGO (Fritz, 2020). What’s unique about these donations is that they are automated, like a subscription to the Netflix entertainment service.
Reoccurring donations have increased in popularity within the last few years and are expected to become even more commonplace. For instance, reoccurring giving increased to 16 percent of total online revenue in 2017, up from 13 percent in 2016 (Fritz, 2020). Furthermore, in 2018, NGO revenue from one-time gifts decreased by 2 percent, while income from reoccurring donations increased by 17 percent (Fritz, 2020). Recurring donations boost donor retention rates, since few people who sign up for recurring donations end up cancelling their donation (Double the Donation, 2020; Fritz, 2020). In fact, the act of signing up for a reoccurring donation is a good indicator that this donor is dedicated to your cause and NGO and thus will continue to do so. Interestingly, research by the Network for Good, a popular donation application, confirms that reoccurring giving programs score higher and stronger retention rates over time, with new reoccurring donor retention averaging less than 23 percent, but after one year this retention goes up to 80 percent and then 95 percent after five years (Network for Good, 2020).
There are other important advantages to including reoccurring donations as part of your NGO’s fundraising strategy. For example, younger donors are more attracted to reoccurring donations. The Millennial Impact Report (2017), an NGO focused on researching how millennials interact with social causes and issues, found that 52 percent of Millennials are more interested in giving monthly to causes they care about, to stay engaged, rather than giving one-time and forgetting about their impact.
Reoccurring donations are also inexpensive and low maintenance for NGOs (Fritz, 2020). The reoccurring donation program can easily be added to any other fundraising strategy your NGO uses. Once the reoccurring donation system is set up, it requires very little maintenance because most electronic donations systems or fundraising software offer organized methods to manage reoccurring donations (Fritz, 2020).
It may seem difficult to acquire reoccurring supporters, but actually it is easier to recruit and retain these types of donors. By giving people the option for an affordable reoccurring gift amount on your online fundraising page, donors will come with time (Creative Science, 2019). As opposed to one-time donors, who normally have to decide when to make a new donation, reoccurring donors know they are committed to the cause, and their default decision is to give (Creative Science, 2019). Any successful reoccurring giving programs makes it easy for a donor to cancel, with clear information at the bottom of all emails and notifications (Creative Science, 2020). Despite this, research shows there will be few cancelations. There are also anecdotal reports that a recurring donation remains reoccurring because cancelling the donation requires energy and attention that most people ignore.
Therefore, in the times of COVID-19, adding affordable reoccurring giving programs to your fundraising strategies is a small action that could have substantial financial results.
Social Media, Online Fundraising and Crowdfunding Campaigns
During the lockdowns imposed during the COVID-19 pandemic, when people are confined at home and using the internet more than usual, social media and online fundraising is especially critical to raising funds. It is important for any size NGO to have an expansive social media presence where you can engage these donors and showcase your work. Whether you decide to use any or all platforms like Facebook, Twitter, Instagram, TikTok, Reddit, LinkedIn, SnapChat, make sure there is easy access to your donation button on those channels (Gardiner, 2017). When deciding on which social media platforms to use, consider your target populations. Digital strategist Ian Gardiner emphasizes the need to discover every detail you can about your target audience, including their demographics, geographic location, interests, and how they often take action (i.e., how often they open emails, how often they participate in activities/events). From this information, you and your team will be able to develop the best posting schedule and the best type of content to publish targeted to your audiences (Gardiner, 2017).
Research supports the idea that NGOs should create an emotional connection with donors on their social media platforms using human interest stories in their posts, in order to increase their donations (Di Lauro et al., 2019). This content should reflect the organization’s voice and tone, which should be evident and consistent on all platforms. Furthermore, an NGO’s social media content should increase their reputation for being a friendly and trustworthy organization (Di Lauro et al., 2019). Researchers found that the more trustworthy the NGO appeared on social media, the more likely it was that people donated to their fundraising campaigns (Di Lauro et al., 2019).
Social media and online fundraising go hand and hand. NGOs can fundraise 24/7 with online fundraising. Online donations are contributions that a donor can make through the NGO’s online donation page so of course, this approach only reaches donors with access to the internet (Double the Donation, 2020). Donations can be made on the NGO’s website but can also be on other platforms, such as GoFundMe or Patreon. Online fundraising pages are extremely useful, as they reach potential donors around the world. Thus, your fundraising efforts are no longer constrained by a physical location. Also, reliable payment processors, such as PayPal, allow donors from countries all over the globe to make donations. To make this approach work, NGOs must develop a polished and aesthetically pleasing donation site that supporters will want to utilize during the donation process (Double the Donation, 2020).
Crowdfunding is also a very successful online fundraising strategy. In times of the COVID-19 pandemic, when so much of life is online, this strategy can reap substantial profits for you and your organization’s program. When my organization Believe New York was looking for initial funds, we used GoFundMe to raise our foundational revenue. Crowdfunding campaigns do not work as efficiently as they could without social media to promote the campaigns; thus, social media is important, as well as the best and easiest way, to spread information about a crowdfunding campaign (Sullivan, 2018). Indeed, these fundraising strategies go hand and hand. Crowdfunding is a novel method for funding a variety of projects and programs, and raising money from different types of people, and researchers are still discovering its long-term impacts (Mollick, 2014). A host site handles all the donations and financial transactions on their end, for convenience. Attractive websites make it easy, and fun, for supporters to donate. In fact, crowdfunding usually gains lots of small donations, rather than a few larger donations. The two most popular crowdfunding sites are GoFundMe and Kickstarter.
Face-to-Face Fundraising and Virtual Events
Face-to-face fundraising is colloquially known as canvassing, that can be carried out on public streets, in parks, in retail settings, in airports and at events. This is one of my favorite ways to fundraise because it is fun and directly engages donors you might have a tough time contacting. Unfortunately, with the lockdowns imposed during the COVID-19 pandemic with strict physical distancing, face-to-face fundraising strategies are put on hold, including activity from my former company, Up-Fundraising. Yet, you can still engage supporters using a revised version of this method. One of the strategies I’ve personally seen successful, is hosting virtual fundraisers and/or virtual events over Zoom or Google Meet. Virtual events can be just as fun and engaging as normal face-to-face strategies, especially as people are becoming more and more familiar with these video-calling platforms. Just because we are in a pandemic, doesn’t mean we can’t engage and interact with our supporters!
For example, with the Middle Earth Peer-Assistance Program, we recently celebrated our 50th Anniversary. Before COVID-19, we planned to have a big celebratory in-person reunion with our supporters. Instead, we planned and hosted a virtual reunion on Zoom. Our supporters obviously would have preferred to be in person, but all of them appreciated and enjoyed the virtual event. Afterwards, we received a large influx of donations to our campaign. So, planning events over Zoom or Google Meet can lead to unexpected great success. Example of events you can launch include program updates, interesting workshops, games and activities, and/or discussion groups.
Be creative and have fun with planning your event. Promote the event on social media, over email, and through mail invites. Then, during the event, stress the importance of making a contribution to support your NGO. You can even set up mobile giving options that use your mobile device to pledge a donation, so attendees can send donations during the event (Sullivan, 2018). In any case, after the event you should certainly send information about how to donate immediately after the event ends. Your supporters will be more inclined to donate after they physically see your team, even online, and directly hear about the impact you all are continuing to make, despite limitations imposed on in-person meetings during the pandemic.
Another example of an event is the virtual event hosted by the NGO Hope for Haiti, called “Hike for Haiti Challenge” to raise money for people in need in their community. From April 17 – May 17, participants paid USD$30 to participate virtually in a hike alongside a real in-person hike taking place in Haiti. Participation consisted of a live-streamed hike-inspired workouts and general wellness sessions led by campaign partners and “ambassadors” while the real hike took place in the rural community of Marre à Coiffe, Haiti, where students and families climbed the equivalent of 200 flights of stairs from the bottom of a mountain, so that they could have access to clean water, healthcare, and education (Hope for Haiti, 2020). The virtual hike expressed solidarity among the students, teachers, and healthcare workers fighting to keep Haitians alive and well during the pandemic. This event by Hope for Haiti is just one example of the many unique, virtual event ideas you and your NGO can host during a pandemic.
Peer-to-Peer and Pledge Fundraising
Peer-to-peer and pledge fundraising are fundraising strategies that usually occur in conjunction with an event, such as a walk-a-thon or a charity run. Peer-to-peer fundraising is when your supporters fundraise on behalf of your organization, and ask their friends, coworkers, and family members to donate to an NGO they care about (Double the Donation, 2020). Similarly, in pledge fundraising, supporters “pledge” to fundraise a certain amount in a specific period of time (Double the Donation, 2020). Both methods are excellent ways to gain momentum for a fundraising campaign and attract new supporters. Of course, peer-to-peer and pledge fundraising is usually attached to an event, and in-person events may be difficult to host during the pandemic. Therefore, creativity and novelty is required when planning and implementing this fundraising strategy.
For example, I recently participated in the “Virtual Step Challenge” hosted by the NGO Pink Forward, held in place of their annual Breast Cancer Awareness Walk, to raise money for the American Cancer Society. After paying the event registration of USD$25, participants pledged how much they would aim to fundraise. Then, they participated by simply walking in their community and keeping track on their website of how many steps they took while simultaneously raising money for the cause from friends and family (Pink Forward, 2020). Supporters could participate on their own, or form teams and raise money together. Fundraising incentives were built in, whereby participants could receive prizes if they raised a certain amount of money. The approach also included a referral program, whereby if you invited five friends or family members to join the event, you could receive 50 percent of your registration amount back. Timing should be appropriate; in this case, the event was held during the month of October, which is Breast Cancer Awareness Month. Pink Forward and their supporters were successful in taking over 50 million steps for breast cancer awareness during this event (Pink Forward, 2020). This example shows how this type of fundraising is possible, and impactful, during a pandemic.
Sustaining Existing Donors and Networks
Whether you have received major gifts or minor gifts, sustaining your NGO’s existing donors and networks is essential to finance your NGO during the pandemic. After all these methods and strategies are implemented, you must ensure that your existing funders are appreciated, fundraising expert David Andrews emphasizes the importance of keeping donors, regardless of the level of their investment, interested, excited, and involved with your NGO (Phoofolo, et al., 2011).
Email campaigns, for example, are effective ways to not only spread the word about your NGO’s crowdfunding campaign, social media pages, events, and/or online fundraisers, but to keep your supporters involved. In my experience, sending emails frequently – about once a week or once every few weeks – secures increased donations from existing supporters.
Additionally, research supports that higher donor retention is related to receiving something in return for making a donation, such as a shirt, prize, and/or an award, with the NGO logo (Di Lauro et al., 2019). Your NGO’s existing donors are the blood and backbone of your organization. Especially in pandemic times, when people are isolated from physical distance and lockdown restrictions, it is important to build deeper connections with your funders and give sincere gratitude for their contributions.
Creating Personal Relationships
Ms. Lesley Vann, a partner from Community International Consulting and expert in NGO financing, encourages NGOs to create and nurture personal relationships, and that many deals are made during personal outings and conversations or even “forged on the golf course”, whereby people share an enjoyable experience together where they bond (Phoofolo, et al., 2011). After all, donors are not ATM machines, but people, who want, and deserve, to be treated as such (Rees, 2017).
In other words, your NGO cannot just show up to someone when you need and want money. Instead, you need to build relationships with your donors, so they know you genuinely care about them and their support. Supporters see every interaction with your organization as a reflection of how well you deliver your services and uphold your mission (Bray, 2016). Therefore, while creating and maintaining this relationship, always be prompt, kind, and professional in every interaction. Another key aspect to building this personal relationship with supporters is by regular communication (Rees, 2017). Communicate the progress of your programs often, through phone calls, emails, newsletters, direct mail, and creating events that show appreciation (Phoofolo, et al., 2011).
For example, when I worked with NAMI-NYS, every year we would host a “Recognition Dinner” with our supporters. During this event, we would buy and host dinner for all our top and consistent supporters. Then we would hand out awards, certificates, and prizes to every supporter who attended the event. The Recognition Dinner was always a favorite for supporters because it was usually held in December at the end of the year to show them how much we appreciated and valued their support throughout the entire year. This follows the theme that I have shown throughout this guide, that “Fundraising is about building good relationships” and “People give to organizations they know and trust” (Phoofolo, et al., 2011). Thus, building and maintaining personal relationships with supporters is key to any successful fundraising plan. Reaching out to supporters during the pandemic is crucial to their continued support, so they know they are appreciated and cared for, especially for their support and generosity in these difficult times.
Similarly, with each and every fundraising strategy your NGO implements, ensure that you always give sincere gratitude, and thank donors for their support. Regardless of the size of a donation – a large grant or a USD$5 donation – thank the funder immediately and sincerely (Rees (2017). Expressing this gratitude has four benefits:
Always send a “thank-you” letter, phone call, or email, within two days of the donation (Rees, 2017). With the Middle Earth Peer-Assistance Program, we send out handwritten thank-you cards, designed based on the season. For instance, this past December we sent out thank-you cards with snowflake stickers and holiday stamps on them. Handwritten cards are always a nice gesture, since they show the donor you put the time and care into appreciating their support. However, hand-written cards are not a requirement; a phone call or well-written email is sufficient. Regardless, a timely and kind thank you is always appreciated, and will elicit a positive reaction from your donor. During the COVID-19 pandemic that imposed loneliness and isolation, people particularly need more love and care. Therefore, it is especially important to give gratitude and appreciation for your donors as quickly and as often as possible.
Continuing Education with Useful Books
As we reach the end of this guide, it is important to share some useful books that have helped me expand my knowledge about fundraising and financing NGOs. During the pandemic, it is especially important to have many perspectives on funding your NGO, in order to have the best outcome. I advise you to look into these books to continue your education on fundraising and financing, as they all have their own unique knowledge and skills to share with emerging and existing NGO leaders.
Final Thoughts and Encouragement
Without a doubt the COVID-19 pandemic has forced NGOs to become creative with the ways we fundraise. Also, as in the theme throughout this guide, it is not impossible to finance an NGO during such a devasting worldwide pandemic. In fact, it can be easier to fundraise for an NGO during this pandemic because donors can be more emphatic, compassionate, and generous, and more desirous of connecting with others and doing “good.” Altogether, there are possibilities for growing, as well as established, NGOs, including those in the poverty and mental health field as my own, to obtain sufficient financing for our programs. Even though government funding and international assistance may be limited, funding from other sources and avenues is growing steadily.
To my fellow growing NGOs, I offer support and encouragement, to not be disheartened this year. I recall the adage that “Rome was not (and could not) be built in a day.” Most major NGOs started small, with few projects. For example, the large multi-million-dollar NGO Save the Children Federation was started in 1919 in Great Britain with just one project by a brother and sister team, Eglantyne Jebb and Dorothy Buxton. They first provided food for starving children in Germany and Austria-Hungry during the allied blockade during World War I (Watson, 2017). It wasn’t until Save the Children employed innovated fundraising and advertising techniques, year after year, that they were able to expand to become an NGO today that services over 120 countries and just celebrated 100 years of helping children in need (Watson, 2017). Their story is just one success of many, and proves the importance of being creative, consistent, and compassionate in their fundraising efforts, especially during a worldwide crisis.
I hope that in reading this guide, you and your team feel inspired and hopeful that funding is possible for your programs and projects.
My utmost advice is: Don’t give up, despite it seeming challenging, difficult or even impossible at times. If the strategy you are using isn’t working, fix it, change it, or try something else.
In this guide, I have shown that funding is possible even during a pandemic – but you need to put in concerted effort to secure it. In my case, ending poverty and improving mental health is such an important goal, that I do not and will not give up. I constantly remember that millions of lives depend on my NGO and on all of us in this field, to help. The world needs your NGO, and the important work you have accomplished and will continue to accomplish.
In closing, I hope this guide assists and encourages you and your team. Feel free to contact me, with any questions, and with your progress and successes, as I look forward to witnessing your NGO’s important work that will improve this world, especially in these unstable times.
Nicole K. Bulanchuk
Primary email: email@example.com
Believe New York Philanthropies, Inc.
Administration email: BelieveNewYork@gmail.com
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Reported by Nicole K. Bulanchuk, a mental health advocate and student pursuing her master’s degree in the Department of Clinical Psychology, Columbia University Teachers College, and a student in Professor Judy Kuriansky’s class on “Psychology and the United Nations.” In addition to Nicole’s academic work, she has extensive background in a variety of areas including research, leadership, clinical methods, and public advocacy. Throughout her experience, she has developed advanced skills in NGO management and fundraising, public speaking, interpersonal listening and communication, crisis intervention, counseling, mentoring and critical thinking. She aspires to become a public servant and clinical psychologist, with a specialization in trauma, resilience, PTSD, and suicide, in order to not only research and treat individuals and families whom have undergone devastating losses, but also to make the biggest impact she can in areas of social justice. Overall, she is devoted to helping all people achieve happiness and security and reach their full potential in life.
Cite this article as: Bulanchuk, N. K. (2021, January 31). Financing an NGO Addressing Mental Health and Poverty Even During and After a Pandemic: A Review and How-to Guide. International Association of Applied Psychology: IAAP at the United Nations. https://iaapsy.org/iaap-and-the-united-nations/reports-meetings-events/financing-an-ngo-addressing-mental-health-and-poverty-even-during-and-after-a-pandemic/.