Nonprofit Fundraising: Start a Nonprofit Organization

Nonprofit fundraising is an essential part of learning to run a successful nonprofit. Since a nonprofit functions off of donations, without proper funding, a nonprofit will not have the monetary resources to accomplish its mission and programs. Fundraising is one of the essential elements those starting and running a nonprofit must become efficient at. However, many who start nonprofit organizations ignore the need that raising funds should to start simultaneously while starting their nonprofit. Read on and I will explain the important elements of nonprofit fundraising.

There are a multitude of nonprofit funding sources which include: individual donors, corporate donations, grants, and fundraising activities. Each of these sources of fundraising require a different approach and skill set to successfully engage them. Fundraising from any of these sources is not hard, but requires dedicated time and energy to gain success that is substantial enough to fund an aggressive nonprofit poised to change the world.

Individual Donors

Individual donors are anyone that have the ability to donate to a nonprofit from their personal finances. This can be family, friends, business acquaintances, and probably more than anyone else, individuals that learn about the nonprofit from the web, literature or fundraisers. Individual donations can be the easiest and most stable form of donations. The key to fundraising from individuals is to educate them with good, concise information about the nonprofit, then keep them up-to-date, allowing them to be a part of the team. You can never have too many volunteers involved in a nonprofit; keeping them involved and motivated keeps them a giving part of your stable fundraising.

Corporate Donors

Corporations world-wide give to nonprofit causes. Many times, a corporation is more interested in geographically local nonprofit organizations. Exposure is an important attractor for many corporations. The more publicity a corporation can get while giving to a nonprofit cause, the better. Usually there is a fair amount of competition for a corporation’s nonprofit giving, so keeping them well informed and involved is key to their continual giving. Gifts-in-kind is another way corporations give to nonprofits. Many times, a corporation can easily give gifts of products they manufacture or distribute that the nonprofit needs, which reduces the expenses of the nonprofit. An example of a gift-in-kind would be computer hardware or software. Corporations are a good stable source of funding for a nonprofit and well worth the time invested.


Grants are another source of nonprofit funding. Grants generally refer to larger type gifts that can be given from individuals, corporations or even other nonprofits. These large monetary gifts are highly sought after because its funding, like other donations, does not have to be repaid. In a single year in the United States, hundreds of billions of dollars can be given to nonprofits in the form of grants. The process of being awarded a grant vary from granting organization to another. Usually, there is a process of applying for an organization’s grant, and then a process the organization takes to determine the recipient. A nonprofit will need to check with each granting organization and follow their process to apply for grants. It is advantageous to learn to write grant requests when desiring to seek funding through grants. There are many organizations that teach grant writing and some are better than others. Funding through grants takes a lot of work and dedication. Prepare for a high turn down rate, and never write a budget with much dependence on grant money unless your proficiency in grant writing and grant awards is well proven.

Fundraising Activities

Fundraising activities can be any activity that raises funds for a nonprofit. There are millions of activities in which a nonprofit can engage to raise funds. Some common fundraising activities are walk-a-thons, marathons, bake sales, art shows, and even spaghetti dinners. Fundraisers are fun and a great way to raise awareness in the community for the nonprofit. I have even seen people bike across the United States, skydive, climb mountains, and sell candy to raise donations for a nonprofit. The sky’s the limit when creating a fundraiser. Anything that someone is willing to donate money to a nonprofit in order to see, eat, or experience, works great as a fundraiser.

A nonprofit does not “make” money to support the charitable work it does. Instead, it relies on fundraising and accepting donations from others to use in accomplishing its mission. Fundraising is a vital skill that those running a nonprofit must have in order to sustain the financial needs of the nonprofit. An error in not acquiring this skill can mean certain difficulty for the nonprofit and its longevity. Fundraising is not difficult, but does require focus and dedication. Finding a good source to learn effective fundraising strategies and skills will help assure the success of a nonprofit.

Copyright 2011 Scott Michael Ringo

Is Your Board Fired Up? Traditional Versus Innovative Nonprofit Board Development

If you’re reading this then you’re most likely either working for a nonprofit or on the board of a nonprofit and at least a tad concerned about board development and performance. Not too many articles on the subject start off by guiding their reader through a short meditative exercise but challenging times require innovative approaches – and these are challenging times. Shaking things up a bit goes a long way to discovering unique, create solutions.

So, read these short instructions, then sit comfortably in your chair – or on the floor if you’d like – and visualize the following:

Your sitting at the table waiting for the monthly board meeting to begin. Look around the table; note who is there.

What they are doing? What are the expressions on their faces? What kind of energy is in the room?

Imagine that a few reports have been given and it’s now the middle of the meeting. Look around the table again.

What are people doing? What are their expressions? Their posture? What kind of energy is in the room?

The meeting concludes.

How do you feel? How much has been accomplished?

And finally, ask yourself,

“When is the next time I will see most of these people?”

Our title asks whether your board is “fired up”. Typically, if we describe a person as being “fired up” we have in mind someone who is engaged, energetic, enthusiastic – practically obsessive about taking action to either get something done or prevent something from happening.

Even if you didn’t take that imaginary trip to the boardroom, it is quite likely that dynamic words such as “engaged, energetic, and enthusiastic” were not those you would choose to describe the usual energy found in the boardroom. Much too often, a look around that table reveals “a bored board.”

Traditionally nonprofits have placed more focus on recruiting high-level, influential decision makers than the level of passion board recruits have for their mission.

There are two quite logical reasons organizations seek high-level and influential decision makers: Sustainability and Prestige

First, let’s take a look at sustainability. If we cut through a lot of jargon, what we mean when we say we want to develop a board capable of sustaining the organization is we want board members willing and able to benefit our organization by sharing two things: their time and their money.

“Old school” board development focus on recruiting board members for the purpose of sustainability concentrates on recruiting board members who fit the same general description: High level decision makers who have the power to sign checks and are willing to do so.

We also need their time. It takes time to network with and influence others to support our mission financially. It takes time to attend board meetings. It takes time to review documents for those meetings.

Nonprofit organizations also look to benefit from the prestige of their board. The cache of having the nonprofit associated with prestigious board members who represent equally prestigious entities can increase the credibility of the nonprofit. In other words, nonprofits often seek to piggy-back off the positive brand of the firms and organizations their individual board members represent.

Additionally, traditional thinking is that prestigious boards can also serve to encourage the growth of an organization’s individual donors. Highly visible financial support from strong, reliable corporate brands can effectively cross-brand a nonprofit as strong and reliable as well – and therefore worthy of support from individual donors.

These two factors, sustainability and prestige, are actually two sides of the same coin. The tradition of seeking out high level decision makers from prestigious companies or organizations comes from the nonprofit’s need to establish and maintain resources to provide the funding their mission relies on. The obvious goal of a nonprofit organization is to achieve their mission and, in order to that most optimally, they must be consistently fully funded.

In today’s environment traditional nonprofit board development can be like trying to fit a square peg in a round hole.

Traditions can be a good thing. Doing things a certain way can provide a sense of security. Traditions can also help to unify a group of people, such as a nonprofit organization. However, when traditions become obstacles to, rather than vehicles for, continued growth and development it is time to reassess their value.

We’ve briefly discussed the factors of sustainability and prestige as two major reasons traditional board development seeks out high-level decision makers. We’ve also established that these two factors can have a positive impact on the growth and development of a nonprofit organization.

So, if we accept that sustainability and prestige are important factors when recruiting for a nonprofit board – exactly why would a nonprofit want to reassess relying on traditional board recruitment criteria and practices? Here’s why:

The environment nonprofits are working in today is inherently different.

Any nonprofit professional who was working in the 1990s wouldn’t consider using the same technology they had their desk at the time – and for anyone between the ages of 18 and 36, the 90’s are seen as akin to the Stone Age.

Over the last 25 to 30 years, updating technology became not only common place, but a standard best practice. Additionally, and even more important, is acknowledging the fact that new technologies have profoundly impacted the very culture we live in. Technology has influenced distinct and identifiable changes in the way people view, behave, communicate, and respond to others and the world they live in.

When current economic challenges are factored into the mix, it is evident that the climate nonprofits are operating in has experienced monumental change.

When living organisms are faced with significant change in their environment, they have two options: go find a better environment somewhere else, or adapt. If they aren’t able to do either, they simply don’t survive.

Nonprofit organizations are living things.

If you think of “the way things were” as a square peg and “the way things are” as a round hole, change has rendered a traditional approach to nonprofit board development as ineffective as forcing a square peg into a round hole. Nonprofit organizations can’t just pick up and go find another, more “square” environment in which to operate. Nor can they continue to operate within their status quo as if nothing has changed. Not if they want to survive.

What are the roles and responsibilities of your organization’s board of directors?

Living organisms often adapt to change in their environment by modifying or developing new capabilities and functions. It makes sense that the first step for nonprofits to take when assessing the viability of board development criteria, practices, and policies is to review the roles and responsibilities of their board of directors.

Not all nonprofit boards have exactly the same functions and responsibilities. However, historically the central roles and responsibilities of nonprofit boards and their members have included the following:

•Determine and define the organization’s mission and purpose; develop and/or approve programs and services to ensure they meet the organization’s mission and purpose; monitor effectiveness of the organization’s programs and services.

•Hire, direct, support, and evaluate the organization’s chief executive.

•Participate in the development of the organization’s strategic plan as well as assist in the implementation of that plan’s strategies, tactics, and goals.

•Perform a regularly scheduled periodic self assessment that evaluates the board’s performance in fulfilling its responsibilities and functions; include results of self-assessment when determining the organization’s strategic plan.

•Actively work with the chief executive and staff to develop funding resources at a level that allows the organization to sustain and fulfill its mission.

•Assist in the development of the annual budget as well as manage the annual budget; perform regular and consistent financial oversight to ensure necessary financial controls are in place.

•Support and enhance the organization’s public image within the community and media by representing and sharing the organization’s mission, goals, and achievements to the public. Procure the support of influencers within the community and media for the purpose of achieving the organization’s mission and goals.

•Develop and/or approve organizational personnel policies and act as mediator between chief executive and staff when necessary.

Successful nonprofits don’t hang onto “Tried and (no) longer true” criteria for optimal board development; the mantra of the successful nonprofit is “Modify, adapt, overcome.”

Unfortunately, many nonprofits exist without a clear definition of their board’s roles and responsibilities – and unless and until they do, will be unable to adequately access board performance. When reviewing or putting together your organization’s board roles and responsibilities, be open to adjusting traditional roles and responsibilities that may need to be modified in order to adapt to a changing environment.

A great example found in nature of successful modification and adaptation to change is a humble little moth called the peppered moth. Prior to the Industrial Revolution their wings were light colored which helped them hide from predators on light colored buildings, trees, and lichens. However, as pollutants increased, the walls of buildings, as well as the bark of trees, became dark with soot. Only the moths that adapted by turning a darker color survived.

The moth’s essential “roles and responsibilities” within nature did not change, but the criteria for surviving in order to achieve those goals certainly did. Prior to the moth’s revolution the criteria for survival were white wings – the Industrial Revolution changed that criteria to black wings.

Nonprofit organizations are experiencing their own revolution and would do well to follow the moth’s example: modify in order to adapt to a changed – and changing – environment.

Passion doesn’t follow money; Money follows Passion

A “Bored Board” is perhaps the most convincing evidence for a nonprofit to concede that their criteria for board development and recruitment needs to be reassessed – and this would true even if the profound technological, economic, and cultural revolution our nation, and our world, is currently experiencing wasn’t happening.

Of course, this is not to say that every board member chosen via traditional processes is a “Bored Board Member.” As a matter-of-fact, right now is a good opportunity to ask the reader to bring to mind either a present, or past, board member who was “on fire.” A board member who eagerly, enthusiastically, and with great energy engaged in the activities required to not only meet, but exceed the requirements of their roles and responsibilities.

What was different about that particular board member when compared to your current “most bored” board member? Without even knowing anything about either your organization or the two board members you are thinking of right now, here is the difference in one word: Passion.

Passion for your organization’s mission and vision is – first and foremost – the main criteria that every candidate for board membership must meet.

Forget going out into the business community trying to convince high level executives of the value of your mission. Instead, board candidates should be required to convince the existing board and CEO that they possess the passion, energy, and enthusiasm to actively engage in each and every role and responsibility required of them.

The ideal board member is no longer “just” a high level decision maker – an ideal board member is a person who lives and breathes the organization’s mission, and that just might be your son’s first grade teacher.

Can you hear the collective gasp from the nonprofit sector? What about sustainability? What about prestige? How is a first grade teacher going to influence the community and high level decision makers? We need the financial support of both these groups.

How can anyone even suggest that you put our organization at risk by placing passion first on the list of criteria board prospects must meet?

But we’re going to go farther than a simple suggestion by saying that a nonprofit organization places their mission at risk by not placing passion first on the list of criteria board prospects must meet.

Why would we say that? Simple, because passion does not follow money, instead, money follows passion.

Here’s a scenario: Your organization’s mission is to provide one-on-one private tutoring to under-served, at risk youth. Ask yourself, of the two people described below, who is more likely to make it their business to get into the CEO’s office at a local national corporate home office:

The middle-aged CFO of a local corporation who “got stuck” on your board after being assigned to take the position by his CEO who didn’t have time to sit on another board? A fellow who agreed to take it on for his CEO only because he read your board’s roster and found a couple names he’d like the opportunity to be in the room with to further his career?


Your son’s first grade teacher who just happens to be a Fulbright scholar only five years out of graduating at the top of her class? A young woman, close to the constituency your organization serves, who is dedicating her career to education? A teacher who is absolutely passionate about the power of education to improve the quality of life of every child – and their children as well? A woman who makes $30,000 a year instead of the $300,000 she could have made in any number of high level decision maker positions?

Hands down it’s your son’s first grade teacher who belongs on your board. She is the most likely person willing and able to create innovative ways to engage the support of high level decision makers. This is the person whose passion will fuel her energy to do what it takes. Here is the board member whose belief in, and passion about, achieving the mission of your organization will both sustain and add to the prestige of your organization.

Not only will your son’s teacher make it their business to get in the room with the movers and shakers, their passion fuels the energy to engage fully in each and every aspect of their role and responsibilities as a board member of your nonprofit organization.

Now, go back to that first exercise we described at the start of this paper. Perform the exercise one more time, but with this one little change: this time you are attending a board meeting after your organization modified and adapted the criteria for membership to include placing demonstrable passion for your mission at the top of your list.

It’s been a long haul, but now 85% of your board members are passionate, ardent, and energetic supporters of your organization’s mission.

Look around the table; note who is there.

What are they doing? What are the expressions on their faces? What kind of energy is in the room?

Imagine that a few reports have been given and it’s now the middle of the meeting. Look around the table again.

What are people doing? What are their expressions? Their posture? What kind of energy is in the room?

The meeting concludes.

How do you feel? How much has been accomplished?

And finally, ask yourself, “When is the next time I’ll see most of these people?”

Your answer: I will see or hear from 85% of these members by the end of the week.

Start a Nonprofit: The Lesser Risk Approach

Starting a non profit organization can be an expensive and time consuming undertaking. It is wise to consider the attrition rate in the non profit arena before creating one. A large percentage of those that start non profits decide at some point that the benefits are not worth the work and give up on their charitable dreams. Creating a nonprofit is a lot of hard work, but so is creating any successful business. The steps to success require determination and resolve, and through it all the rewards are worth the effort. Follow along and I will share some tips to lessen the risk that your nonprofit joins the failures.

Financial challenges are a top reason that many non profits do not see success. Initially, when starting an independent 501c3, processing and filing fees can be well over two thousand dollars and many months of work can be put into its creation. That is a lot of time and money to risk if the nonprofit does not find success and fails. One way that the charity can lessen the financial risk from the start is by creating a Fiscally Sponsored nonprofit rather than an independent nonprofit. A fiscally sponsored nonprofit should not run more than four hundred dollars in set up costs and a few hours work to complete the paperwork. This is significantly less than the cost to start an independent nonprofit and therefore puts less investment at risk and imposes a lower financial burden on the new nonprofit.

Through Fiscal Sponsorship, the nonprofit should have the ability to do anything it could as an independent nonprofit. Fiscal Sponsorship is a formal arrangement in which a 501c3 public charity sponsors a project that needs nonprofit status. Fiscal Sponsorship is a great way to start a nonprofit and allows the organization to do nonprofit work with 501c3 status without all the hassle or expense of starting an independent nonprofit.

There is no reason to risk thousands of dollars starting up a nonprofit if you can have it created for several hundred dollars. In addition, should the nonprofit want to spin off as an independent nonprofit in the future, that is always an option even through it started out fiscally sponsored.

There are a few other added benefits to a fiscally sponsored nonprofit that lessen its risk. Many sponsoring organizations provide lots of training to help the newly formed nonprofit succeed. One organization who provides support and training for nonprofits is Simple Nonprofit, as mentioned in the signature below. This assures that those running the nonprofit have expertise and support to help them guide the nonprofit. The more expertise and guidance a nonprofit can get the more likely it will continue on to success. Fiscal Sponsors may also provide accounting, bookkeeping, banking and other administrative services to help the sponsored nonprofit succeed.

So, while starting a nonprofit organization 501c3 can be expensive and time consuming, there are positive alternatives through fiscal sponsorship that lessen the risk. Consequently, the help a fiscally sponsored organization receives does more than lessen the risk, it enables it for greater success.

Learn more about Nonprofits and How to Make them Successful. Copyright 2011 Scott Michael Ringo