Overview of Fundraising
Every organization needs funds to secure consistent growth and prosperity. Fundraising is a very challenging job. Over the year, Corporate Fundraising has progressed a lot with the change in technologies. It refers to a process of obtaining a fund, essential to start or run an existing company, and ensures that the investor can continue funding which helps the organization in achieving its goals.
Fundraising is the procedure of pursuing and collecting the free will financial contributions by interesting individuals, businesses, charitable trusts, or federal authorities. It refers to an attempt to infuse the capital in such a way to convert an idea into a business. Further, it also refers to the recognition and requisition of investors or other sources of capital for Profit organization.
Objective of the Fundraising process
It is the process of accumulating money as a contribution from individuals and businesses. Earlier, the objective of the Fundraising process was to gather money for non-profit organizations, but, with time, the process of raising the fund has changed a lot and is used for various reasons. Those are as follows:-
- Traditional fundraising
- Great platform to structure a new company
- To run an existing company
Why Fundraising is required?
The purpose of fundraising is to hold up the capital projects, funding, or operating expenses of current programs. It is not just a way of raising money, but also a way to promote the start-ups and the existing companies. It ensures that the investor can continue funding which helps the organization in achieving its goals. Fundraising is also important for the success and well-being of nonprofit organizations.
Below-mentioned are the checklist of the things to be considered before Fundraising-
- Accurate Legal structure
- Proper Market analysis
- Competition in the market
- Growth Factor
- Creating a business model
- Building Investor’s trust
- Equity capitalization
- Creating a good network.
- Research on Potential investors
Fundraising for NPO’S – How Non-Profit organizations get sponsored fundraising by the Companies?
There are two main reasons for which the companies provide funding sponsorships to nonprofits organizations. Firstly, the Companies sponsor fundraising because they understand the objective of the organization, and secondly, the company expects the benefit from the marketing opportunities offered by the nonprofit. The non-profit organization getting sponsored fundraising for the companies. To maximize the sponsorship revenue, the organization should focus on both mission and marketing
Exhibiting the Mission
Nonprofits should highlight their mission and present the mission to the prospective sponsors. The companies want to know that their money will be used by an organization that carefully stewards finances to provide excellent outcomes. The philanthropist should explain the overall vision of the organization and provide narrative and recommendations from those who have been helped by the nonprofit organization.
Offering Marketing Opportunities
Non-profit Organizations offer marketing opportunities to sponsor companies. The sponsor company’s do not face challenges while raising funds because such funding can come from the company’s marketing expense as well as their public-spirited budget. Offering Marketing opportunities to the sponsor company includes-
- Identification at events,
- Advertisement on the nonprofit organization’s website or,
- Nomination opportunities at the organization's facility.
Approaching the perspective of person
For fundraising sponsorship, the organization needs to approach the perspective person. The best person to approach for the sponsorship shall be a person who is a decision-maker at the company i.e. the organization should try to find a board member or other key supporter who can take proper decision making on behalf of the company.
Direct and Clear Communication
For Fundraising sponsorship, a nonprofit organization should be clear and direct. The organization shall raise a direct concern, not a vague statement. The organization should ask a clear question with the sponsor company.
What is the required procedure to apply for Fundraising in India?
- Preparing a Fundraising Plan
Preparing a fundraising plan is the initial step that allows your organization to recognize the purpose of raising the funds, the steps of the organization needs to follow to put the fundraising plan in place, deciding what the organization needs.
- Setting Fundraising Goals
Before initiating the Fundraising process, the organization needs to know what kind of resources it needs to achieve its goals. The organization needs to determine what will be the goals for the upcoming year, the amount and type of funding needed, and how the funds will be used.
- Sources of Fundraising
The sources of Fundraising help the organization in running its operational activities or starting the new business. The major sources of Fundraising are: Individual, Foundations, Corporations, and Government
- Recognizing the Prospects
The growth and longevity of the organization depend upon the contributors who have the desire and capacity to support the organization. Possibility research helps in determining and evaluating the direction of the power and development of staff resources. To determine or building a relationship between the contributor’s prospects, recognition, and research work must be performed.
- Creating Your Fundraising Plan
Before starting the process of raising the fund, the organization needs to know how to create its fundraising plan. Certain key factors that are required to be kept in mind before creating a fundraising plan-
• Return on Investment-An easy way to decide the viability of raising the funds is to evaluate your return on investment. ROI helps in determining the cost-effectiveness of the organization and helps the organization financially.
• Ensuring that adequate funds are present- The Board members are responsible for determining the organization’s mix of programs and services and ensuring that adequate funds are present to carry out those programs and services.
• Contributor’s Growth and Retention- Proper fundraising plan helps in persuading others to donate to your organization and it helps in ensuring the organization retains its current donors. The basis of contributor’s growth and retention is building meaningful relationships with donors to earn their loyalty and support.
What Methodologies are used by the Organizations for Fundraising?
What are the Key requisites for Fundraising Success?
The key requisites for Fundraising Success are-
1. The first key step is to identify why the organization needs to raise money. The Following key points shall be kept in mind while identifying the ‘Why’-
- The objective of the organization.
- Motive and Inspiration.
- Defining the reason for raising the funds
- Approaching the potential Donors.
2. Choosing an appropriate fundraiser.
3. Proper organization i.e.
- Creating a Goal,
- Implementing a proper cost to profit ratio
- Setting a Budget
- Corporate Sponsorship and contributions
- Deadlines to meet the goal.
4. Proper and effective teamwork.
- Involvement of experienced staff.
- Increased responsibility of every member
- Presence of enthusiasm in the group members.
- Proper communication among the team members.
5. Proper Execution of activities and regular follow up.
6. Maintaining a good relationship with existing and potential investors.
Fundraising in Companies
Fundraising in companies refers to a process of obtaining funds required for running or starting a company. It is a process of financial investment for product manufacturing, development, sales, and marketing, working facilities, and inventory within a company.
However, raising the funds for start-ups means an infusion of capital required to turn the plan into execution. It is very difficult for start-ups to acquire funds for their survival. Every start-up needs resources i.e. Initial capital, to finance product development, purchase machinery, and inventory, or pay salaries to its employee. Before approaching the investor, the company must have a detailed financial analysis and well -prepared Business plan and must be clear about why the company needs to raise the funds.
The company needs Fundraising for-
- Processing of working capital
- Marketing and advertisement.
- Managing the organization in a way planned to make a profit.
- Office segmentation, rentals, and other management costs
- Creation of the first model, product, and application development
- Recruitment of staff
- Legal and consulting services
- Raw materials, stores and spares, and equipment
- Certifications, Registrations, and Permission required from the authority to start the business.
Private Limited companies raise their funds through various modes-
- Venture Capital
- Public Deposit
How Corpbiz helps in Fundraising?
Corpbiz as a Legal consultant is specialized in the areas like-Fundraising Planning, Administrating Capital Campaigns, and add value to fundraising operations by helping its client in building long-term success. Corpbiz provides-
- A strategic roadmap that indicates the business priorities.
- A Factual Business plan that helps in creating a business model
- Proper marketing analysis and recent trends to follow before starting the process of raising the funds.
- Corpbiz helps the entrepreneur start and manage their existing business.
Corpbiz has a dedicated team of professionals that helps potential companies and start-up companies with the best fundraising services to enhance their business growth. Corpbiz helps its client by providing comprehensive knowledge required for raising the funds. It provides systematized content to its client on how to approach fundraising.
We, after taking into consideration the phase and area of the client’s business funding, we connect the client with the investor who is best suitable for their business. Corpbiz helps in-
- Investment advisory,
- Investor pitch deck and
- Invest or connect
What are the Difference between Crowd funding and Fundraising?
Often, people get confused between the concepts of crowd funding and fundraising and use the word interchangeably, but practically both the concepts are a bit different. Below- mentioned are the basis of difference between the two terms-
- Crowd funding is the procedure of funding the project by collecting the money from various individuals, whereas, fundraising is the process of raising financial support for various causes or initiatives.
- In India, Crowd funding is used to be difficult in the initial phase, as there were no proper online platforms an organization can use to create an initiative and attract the public towards the initiative. Whereas, in Traditional Fundraising, all the activities, from marketing to branding and conducting the initiative has been done offline. However, any fundraising campaign, whether online or offline requires ingenious and skillful implementation.
- Crowd funding is a part of Fundraising. It can happen from any means, i.e. the organization or an individual can raise funds from a bank, a corporate, or particularly a Venture Capitalist for the business startup, whereas, crowd funding comes from various individuals who believe in your cause.
Frequently Asked Questions
- Support from the corporate sector,
- Organizing special events,
- Support from the corporate sector,
- Membership Campaign i.e. converting the potentials to a regular donor.
- Opting for a good platform for raising the funds which will suit the need of the organization.
- The second step is to register as a fundraiser and begin with the initiatives.
- Enter all the details of the purpose for raising the fund. The purpose can bethe charitable, social, or personal cause.
- Entering the required details and fill the details with appropriate pictures.
- You must enter a set goal of how much amount of money would be sufficient for the organization’s needs.
- Analyzing potential sponsors.
- Communicating funding proposals and sending proposals to potential sponsors.
- Initiating marketing and promotional activities.
- Building fundraising events.
- Keeping the records of sponsors.
- Arranging the campaigns that will lead to contribution.
- Imparting training to the volunteers.
The Fundraising Committee is a committee having theaim of raising funds to enhance the financial viability and stability of the organization. The committee is responsible for supervising the overall fundraising of the organization.
Crowdfunding is taking place online, individual from various parts of India have been provided an opportunity to look and understand the importance of the cause. Once they are satisfied with your cause they can simply donate by just clicking on one button. The amount of funds varies from person to person depending upon their willingness to pay the amount.
- Crowdfunding is not restricted to the boundaries.
- Less time-consuming and inexpensive:
- Crowdfunding is a cheaper alternative.
Even though there are numerous advantages crowdfunding has over traditional fundraising, but traditional fundraising still has a vital role to play in the world of investments.
- Finding potential product/service idea
- Substantiate by hitting the market and looking for potential clients
- Monitoring the ways to increase customer base
- Measuring through the development of the business in a sustainable manner
- Organizing a special event
- Online Fundraising
- Organize an auction
- Corporate support
- Earned Income.
Online Fundraising is one of the easiest ways to raise funds for a purpose. Through Online Fundraising, an individual can reach a larger audience which in physical is impossible. It helps the NPO to raise money through an online platform.
A Membership Campaign is an effective way of collecting people to know more about your organization and the work that you do. Bringing the members increases the chances to collect more funds for the campaigns as most of the members get converted to contributors in a short period.
For Fundraising, it is important to find a potential investor. Once an investor has communicated its interest in investing in the company and a term sheet is signed by the investor and the organization, the process of fundraising could take anywhere between 3-6 months on average. However, this is only indicative and practically the timelines could differ.