A few tips for fundraising for startups and small organizations
This short article is not intended to be an exhaustive survey of fundraising methods for every particular circumstance or need. Further, although some of the tips below could certainly be used by for-profit ventures, this article is more directed toward social enterprise or non-profit causes.
Whether you are a for profit, nonprofit or something in between – all organizations and business concerns need money to get going and to keep going. So whether you are a startup or simply a small organization here are a few general tips for fundraising.
A few basic starting points:
- Self-funding. Self-funding includes more than just writing a check. This might seem like common sense, but every entrepreneur of a business or founder of a nonprofit has likely contributed their own talent, time and treasure to their vision. These contributions are analogous to self-funding. But at some point even someone with deep pockets can get maxed out. So self-funding is never a sustainable model. Let’s keep digging:
- Sphere of Influence. Who do you know? Would the people you know be willing to invest in your business or donate to your cause? It can be awkward to ask family and friends for assistance. But do the people in your sphere of influence even know what you are up to? Be sure to let folks know about your vision. Maybe someone you know will contribute time or make important introductions for you.
- Contact Management. Your sphere of influence is who you know. Your contact list is who you know relative to your cause. Ask people you know to subscribe to your list. Put out social media posts inviting the same. Using services like Mailchimp or Constant Contact you can work to build up a list of people who have opted-in to support or receive updates on your cause.
Fundraising for non-profits and causes: Fundraising (for non-profits) requires recognition by others of your need and the opportunity for supporting that need. You need people to recognize what you are doing. You need people. Absent one or two major sponsors or donors building a contact list becomes an ongoing challenge for causes of all sizes. So fundraising and contact-management go hand-in-hand.
- Host a physical event. This doesn’t have to be a fundraiser gala or banquet to generate revenue. Instead, if you have a start-up or small organization, hosting an event might be a great way to expand your contact list. Events can also attract sponsors who might be willing to pay a few for exposure. Sponsorships can be a win-win because the cause receives sponsorship revenue and the sponsor receives exposure for their brand and usually other perks such as admission to the event. You can entice sponsors by allowing logos to be placed on event materials such as flyers, programs, website and banners. Larger events might even broadcast commercials. Naming rights can be sold for events. In addition to sponsorships events can raise money through ticket sales, merchandise and other items that can be sold or marked up. Booth space for exhibitors as another example. Some groups are able to combine fundraising asks (asking for money from attendees) with sponsorship, exhibit and ticket revenue to maximize fundraising amounts. For start-ups and small organizations that have few contacts, consider using an event as a tool to promote your cause and to network with new people. In other words: grow your list.
- Create a virtual event such as a webcast. Webcasts can be great to quickly expand your contact list and to generate financial support for your cause. But getting people to attend your webcast can be tricky. I have witnessed social media ads on Facebook by companies offering a free book or tips for success by joining their live webcast. During these webcasts the organizers offer some tips but to unlock more some step is required. These steps can be completing a survey or paying some fee. People are weary of bait and switch marketing tactics. But the idea of promoting your event with a Facebook ad or similar social media ad might have merit for your particular cause. The biggest trick is to have a reason for people to attend. Do you have a cool or compelling story? Can you invite an influencer to be a special guest on your webcast? Has your cause been in the news? Once you discover your hook you can cast your line. Webcasts can be useful for growing your list, fundraising and for building content.
- Branding. The most successful fundraisers are built around a brand or cause that people feel compelled to support. To be successful at fundraising it is critical that people know the brand, recognize the need and trust the cause. Get yourself out there. Think of ways to build your brand and your reputation relative to a particular cause.
- Mail and Prospecting. For groups with a budget, there are countless services that offer mail (or email) prospecting lists. Some lists are more valuable than others. Some are spam. Some are junk. But others can be excellent investments. To find a reputable list-broker ask around. Check with groups you trust and ask who they use. Mail can be expensive and often requires six to twelve months to test. But successful mail campaigns can create repeat donors and can pay for themselves. This method is for groups that have the budget to risk. In addition to budget you need compelling and effective content for the mailers. Something to think about.
- Crowdfunding. Crowdfunding using social media sites can be great. By now you have probably heard of or even contribute to a crowdfunding campaign. The trick here, absent your campaign going viral, is to have people to promote it too. Having a list of contacts is essential for these campaigns to be successful. If you build it – they will not come unless you tell people about it! That said, I am a fan of crowdfunding in certain circumstances because these can campaigns can be financially successful and create direct engagement with your supporters.
- T-shirts and products. Selling products can be a fun way to build your brand and at times to fundraise. Just be careful about tight margins. Also if you are a 501c3 talk to your tax professional about any unrelated income business tax concerns.
- Games. I know several groups that host BINGO or other game nights. These can be fun events and can provide wins for both the cause and for the winners. But beware of federal, state and local rules for gaming, raffles and lottery.
Last – be creative. If you are just getting started keeping it simple is a good idea. But sometimes it is okay to be creative and try fundraising ideas. Just make sure you understand any local laws or rules.