For non-profit organisations, finding sponsors and deciding a funding model for their organisation can be one of the most challenging tasks they have to do.
Every organisation needs money to stay afloat, and non-profit organisations there are, of course, no exception. Money is a common topic of conversation among non-profit professionals, and discussions about finding sponsors have become even more heated during economically unstable times.
On one hand, there are multiple financing models to choose from, which can cause confusion. On the other hand, some non-profits may feel less “flexible” and limited in their options.
To make matters even more challenging, many professional non-profit organisations are hesitant to focus their efforts on raising funds and finding sponsors, reinforcing the misconception that seeking money is somehow “bad.”
Because this is a complicated topic, to help you through this, we’ve put together a list of the top six non-profit funding sources you might want to consider.
Table of Contents
How to get sponsors for Charity
1. Individual donations
Of all donations to non-profit organisations, 71% come from individuals.
Individual donors are great options when it comes to finding sponsors for charity, as they can make one-time or recurring donations. They also give in various ways: online and offline, through events, auctions, scheduled donations, and more.
When it comes to individual donations, it’s essential to consider all your options because they are such a massive part of a non-profit’s funding. For the most part, this is a very effective source of funding, especially for those organisations with large marketing budgets and who have a target of high appeal (e.g., cancer).
2. The size of the donation
Take advantage of all categories of individual donors, from large donors to regular donors.
Large donors often give less, but their donations are considerably larger. Make sure your fundraising model nurtures key donors. What is considered a “large donation” depends on the organisation. Look at your overview of donations and select the largest donation(s) you have received in the past. For a large and established organisation, this could be a six-figure donation, while for smaller non-profits, it could be several thousand dollars. Recruiting and maintaining large donors is a little different from maintaining regular donors.
To attract large donors, consider investing in philanthropy screening software. If possible, consider appointing a team member to work with key donor leads. To secure a large donation, you usually have to attend many meetings, invite the potential donor to your office, arrange a meeting with the board, and often send relevant updates.
Regular donors tend to give more often, but their donations are smaller in size. To maintain regular donors, you can use a variety of donor acquisition and retention techniques. Many non-profit professionals recommend that you convert regular donors into recurring donors. This provides your non-profit with a sustainable income and allows you to plan your activities.
3. Online or Offline
You can receive individual donations online or traditionally (offline). While online fundraising is increasing every day and more people seek information online, don’t be too quick to write off traditional fundraising.
You will get the best results when you combine traditional and modern fundraising techniques.
3.1. Online fundraising
Crowdfunding (see below) works best for specific campaigns and when you’re telling specific stories. When you’re not running a specific campaign, your website is your best resource. It is the permanent home for your online fundraising efforts.
It is critical to invest time and effort in making your website and online donation page shine. Make sure that the potential donor encounters a user-friendly website and has a smooth experience. Make sure your donate button is easy to find. A donor should be able to find your donation link within seconds of your donation page loading. Design your donation page to match the rest of the website.
It is also crucial to design a donation page that is mobile-friendly/responsive. Keep the donation page on one page. Keep it simple and straightforward, with a call to action on the front and centre. Use powerful images and offer multiple payment options.
Simply put, crowdfunding is about many individuals, each giving a small donation – $10, $50, $100, and maybe more. Crowdfunding has become popular through the proliferation of various online platforms such as Whydonate and is used by business organisations as well as non-profit organisations.
There are many different types of crowdfunding (reward-based crowdfunding, human capital crowdfunding, equity crowdfunding, etc.), but donation-based crowdfunding is the most commonly used by non-profit organisations. To get the most out of donation-based crowdfunding, you need to post regular updates, use compelling images and videos, offer incentives, and share via email and social media. Make sure you tell a story – a story is what fuels a crowdfunding campaign.
Peer-to-peer fundraising and finding sponsors is a subcategory of crowdfunding. Instead of having one crowdfunding page where everyone donates, individual fundraisers in peer-to-peer fundraising usually set up a personal fundraising page to accept donations, which are then received by your non-profit.
This strategy leverages your donors’ existing networks. It encourages supporters to reach out to their peers, friends, colleagues and family members for donations and find sponsors.
Peer-to-peer fundraising is effective because it builds on relationships, leverages your pre-existing donor base, and contributes to providing social proof. We are more likely to trust a publication if it is created by a friend or family member. Peer-to-peer fundraising and finding sponsors also work well because it’s exponential. All of your supporters’ individual campaigns are surging out and bringing you more donors.
3.2 Offline Fundraising
Letters / Direct Mail
This offline fundraising method is still widely used by non-profit organisations because it is generally inexpensive, effective and easy to find sponsors. It’s beneficial for smaller non-profits or non-profits that work locally. In addition, older donors prefer direct mail (letters). If your non-profit has a pool of older donors, direct mail is very effective.
Events have been effective tools for fundraising and finding sponsors for many years because they provide a space for the non-profit and potential donors to interact. Events can also boost your online fundraising. Donors are more likely to give if they can name faces.
Although door-to-door fundraising has declined over the years due to its labour-intensive nature, many organisations still use them when it comes to finding sponsors for charity.
Phone requests are donation requests made over the phone and can range from an employee making a few “thank you” calls to major telemarketing campaigns. As with door-to-door fundraising, this technique has declined over the years as online fundraising grows, but it can still be effective for some non-profits to find sponsors.
Non-profit organisations can apply for grants from the government and private and public foundations at the municipal, and state levels. In general, you do not have to pay back money that has been awarded to you through a grant. Globally, In almost every country, your organisation must have charitable/non-profit status to receive a grant.
Each grant organisation has different requirements and may also depend on the country in which your non-profit is registered.
One of the benefits of a grant is that it can support significant projects, enabling them to have a large-scale social impact that would otherwise not be possible.
The downside is that it can take a significant amount of time. First, it takes time to develop the skills for writing a grant application, which actually leads to the payment of a grant, and then it can take a while to see the funds.
In addition, subsidies are often linked to specific conditions. These conditions apply to matters such as how exactly you can use the money. They also have specific reporting requirements, which you should consider before applying. The conditions can also be related to certain outputs or outcomes or the achievement of agreed milestones.
Grants can be very attractive to non-profits, but you should think carefully before applying for them. Here are a few things to consider before deciding to use grants as part of your fundraising/funding model.
- Can we invest resources for writing rewarding grant applications?
- Can we meet the subsidy conditions?
- Are the activities we would perform in line with our mission, goals and strategy?
- Can the activity be continued after the subsidy has ended?
For some organisations, grants are the ideal source of funding, while others find them too cumbersome and restrictive. That’s why it’s important to answer the questions above first to ensure that a grant is best for your non-profit right now.
If you live in the Netherlands, there is a searchable online database of funds to help you find what you are looking for.
5. Finding sponsors and corporate sponsorship
Finding sponsors and corporate sponsorships can be an excellent source of funding for non-profits.
Companies are usually willing to collaborate on projects to improve their philanthropic image or work towards a more socially responsible organisation.
Different companies will have different donation programs, some of which may work for your organisation.
There may be some reluctance to work with and sponsor companies. However, there are many socially responsible companies. As long as you accept donations from those that align with your non-profit’s mission and values, it can be a valuable source of funding for sponsors to find.
Aligning values is especially important because today’s donors demand transparency, and being very careful with who you partner with can help protect your reputation.
Corporate sponsorship usually encompasses three major forms:
- Philanthropic – no strings attached donations, similar to individual donations
- Event sponsorship – episodic or short-term support, finding sponsors based on an event
- Cause-Based Marketing – Longer-term thematic engagement and locate sponsors by engagement
There are also donation matching programs – where companies match the donations of their employees.
When considering corporate sponsorship as one of the funding sources for your non-profit, don’t forget to consider overhead. Someone has to manage the partnerships, especially if you plan to make business partnerships and finding sponsors is one of your primary sources of income.
6. Membership Fee
This non-profit funding source doesn’t always work for every non-profit, but it is worth looking into. Consider your non-profit’s mission, then decide if you want to use the revenue stream for membership fees. This funding source is particularly effective if your non-profit can offer exclusive programs and/or perks and benefits to its members.
A subcategory of the membership model is funding through former beneficiaries or alumni. This model works exceptionally well for hospitals and universities, which generate a sense of “return” in their former beneficiaries and thus find sponsors.
This particular funding source from past “beneficiaries” works if your organisation serves a large, high-turnover community. In this regard, Princeton University is an excellent example of the way it finds sponsors.
The university is very adept at approaching alumni for donations, and they have the highest number of alumni of any national university, donating at 59.2%. In 2008, more than 33,000 undergraduate alumni donated $43.6 million to their alma mater. As a result of the university’s fundraising efforts, more than 50% of Princeton’s operating budget is paid for through donations and endowment income.
This works because previous beneficiaries feel that they have received many benefits from the institution in the past and are eager to provide others with the same benefits. Past beneficiaries see the individual benefit they have received in the past as a higher social good.
Before you start finding sponsors and decide to use membership fees in one form or another as a source of funding, ask yourself the following questions.
- Do we have programs that have loyal supporters and people who want to spread the word?
- Can we invest in long-term relationships with our beneficiaries?
- Do we have the capacity to reach the beneficiaries after they use our services?
- Do we offer exclusive perks and benefits to justify a membership fee?
7. Selling Products and Services
Another source of funding your non-profit may consider is selling products and/or services.
For example, you can sell items with your brand/logo to generate income for your organisation. This usually concerns t-shirts, bags, cups, cookies and other products. Goodwill Industries, for example, is probably the largest non-profit retailer.
Many non-profit organisations also charge for some of their services.
For example, hospitals bill patients, museums charge entrance fees, theatres sell tickets, community organisations charge dues, colleges require tuition, and so on.
This can be a great source of income for your non-profit, but as always, this funding source doesn’t always apply to every non-profit.
According to the National Center for Charitable Statistics, in 2013, such sources of income provided nearly half (47.5%) of total revenue for public charities. And a quarter of the revenue came from government contracts for services.
Selling products and services is sometimes referred to as “trade” or “earned income.” Here are more examples of selling products and services:
- Sell event tickets.
- Create and sell publications.
- The sale of internal expertise, e.g. writing, training, consultations.
Non-profits can sell in most countries. If the sale of products and services is a significant part of your budget, you should seek expert advice. If these activities are not related to your primary purpose, charities will have tax and tax implications. Be careful with your earned income and track the percentage of income that consists of products and services for your organisation.
8. Donations in kind
In-kind donations are not helpful to every non-profit but can be an invaluable source of support for non-profits such as animal shelters, homeless shelters, anonymous shelters, or humanitarian aid organisations.
Examples of in-kind donations are food, clothing and medicines. If finding sponsors for in-kind contributions work for your organisational model, they can save you a lot of money. For example, if your organisation wants to bring food and water to areas affected by natural disasters, it is very helpful to be supplied in kind.
You may not be able to use the in-kind donations directly for your programs. In that case, you can always use them for auctions (depending on the type of products). If you choose to do this, you should clearly communicate (ideally on your website) which items you can accept and where your collection points – if not in the office – are.
It is important to note that in-kind donations do not only include items such as food, clothing, and medicines. Donations in kind can also be someone who, for example, gives a speech or gives a workshop free of charge, or someone who builds your website for free.
While opinions vary about what constitutes the “ideal” funding model for a non-profit while finding sponsors, using different sources to achieve sustainability is generally good practice. In general, it is recommended that non-profits never receive more than 30% of their funding from a single source. If an organisation loses 30% of its revenue, it can probably be restructured to survive.
It is important to keep in mind that we’ve outlined here possible sources of funding, but certainly not all the necessary financial models for running a non-profit.
When it comes to securing funds for your organisation, make sure you have a plan. Whether it is individuals, foundations, corporations or government funding, invest in relationships with donors and find sponsors. All these relationships take time to develop and must be maintained. You must respect any kind of support.
It takes creativity, commitment and hard work to solve income challenges. Each funding source has opportunities and challenges, and each, of course, has its advantages and disadvantages. Regardless of which one you choose, they all require effort, focus and investment for finding sponsors.
We hope this article helped you understand your options to start choosing your ideal funding sources. What is your perfect mix? Which are your main sources of income, and which do you use only occasionally? Whatever you choose, it’s important to make sure it works for your non-profit. It should help you fulfil your mission and support your activities.
For more tips for non-profit organisations and finding sponsors, visit our non-profit blog.