The short answer: New nonprofits can raise money through several practical channels: host a community event, run a product fundraiser, solicit in-kind donations of goods and services, set up planned giving, and use crowdfunding to pull supporters into the work. Each one does double duty, raising funds while spreading the word about your cause. Start with one or two, keep your administrative costs low, and track every gift (cash and in-kind alike) so you can see what is actually working.

You’ve done the research, written a mission statement and taken all the necessary steps to officially set up your nonprofit organization. Now it’s time to determine how you’ll raise the funds needed to support your efforts and keep your nonprofit running. Here are six ideas for raising funds to help you get started.

Host an Event
Events are a great way to get the word out about your cause, and typically prove to be key fundraisers for your nonprofit. When planning the event ask for sponsorships from supporters in your community. In return for crediting their business or family for their support, ask them to donate things like; items for auction, food and drinks, invitations or even the use of a venue. The more you can reduce the costs associated with the event, the more money you’ll raise for the people you’re trying to help. Also, consider forming a committee to help with planning and implementation for your events. Committee members can help to solicit sponsorships and draw interest from their own circles of influence.

 

During the event, assign tasks to volunteers or staff so you can spend quality time talking with your guests. Taking time to discuss your mission is valuable for building relationships. Share your story, let the people you’re talking with know what motivated you to do what you’re doing. Don’t miss the opportunity to grow your donor base and help others catch your vision.

 

Try a Product Fundraiser
Nonprofits raise nearly $2 billion each year through sales of popular consumer products. Research has shown 45% of Americans purchase fundraising products each year. There are many fundraising opportunities to choose from. Here are just a few examples of products that produce the best results. T-Shirts, Cookie Dough, Candy and Coupon Books.

 

Some nonprofits sell items from inventory, either purchased or donated. When you’re first getting started it’s important to go slow ordering inventory. Inventory that sits in your storeroom does not generate sales or profits and shrinks your bottom line. Losses caused by excess inventory can create debt, additional taxes on unsold inventory and higher insurance costs on the greater value of inventory. It is critical to have a method for tracking inventory. Argenta Software for Nonprofits offers a fully integrated inventory system, complete with orders, vendors, products and invoicing. Using a system like Argenta will allow you to plan you purchases intelligently.

Amazon Smile
Amazon donates 0.5% of the price of eligible Amazon Smile purchases to the charitable organizations selected by their customers. You can register to participate by going to https://org.amazon.com/  To register you must be an official representative of an eligible organization. You will receive your donations by electronic transfer. Visit org.amazon.com to access tools to help you spread the word to your supporters. Sign in to your organization’s org.amazon.com account and click on “Marketing Tools” to obtain a link to a customized Amazon Smile landing page for your organization that you may use in email newsletters, on your website, or in social media posts. Also, access a downloadable website banner and social sharing widgets to reach your Facebook and Twitter followers.

 

In Kind Donations
Goods and services, not cash, given to help with nonprofit operations are considered in-kind donations. It’s very important to solicit these types of contributions. For example, let’s say you need a website. You could use funds donated to pay someone to create one for you, but the cost of building the website is counted toward your administrative costs. As an alternative, if you find a supporter who will build a site for you and donate it, money would not be exchanged and therefore never counted as funds used to support your infrastructure. The less money that goes toward administration, the better. Donors usually have a bad feeling about contributing to organizations with higher administrative budgets.

 

Make sure to record a fair market value for the goods and/or services you receive. Use donation tracking software to do this. Argenta software for nonprofits, allows you to categorize in-kind donations separately from your administrative costs in your annual financial report.

 

Planned Giving
Any contribution that is arranged in the present for a donation that will be given in the future is considered planned giving. The most common example of this is when a donor commits to give cash, stocks or equity, from their estate upon their death.

 

It can be hard to ask someone about estate planning. No one really wants to talk about someone’s death with them. Consider alternative ways to promote the idea. One way is to find a few loyal supporters, possibly board members, who are willing to make this type of commitment, then ask them to share their plans with other potential donors. This may encourage others to do the same. You can write about the generosity of these donors in your newsletter or on your website. Getting the word out could help build strong future support for your organization.

 

Crowdfunding
Recruit your supporters to raise funds on your behalf. Crowdfunding is one of the best ways to raise money for your cause because it directly involves your donors in the fundraising process and can help you raise a lot of money. Another benefit is spreading the word about your organization. Donors can learn more from each other which will create an organic reach, that could potentially double your constituents.

 

You’ll need to decide on a crowdfunding site to use. Here are a few of the top crowdfunding sites available; Causes, Crowdrise, Kickstarter and Indiegogo. Razoo is the most popular among nonprofits with over 14,000 who have raised around 100 million.

 

With any fundraising even crowdfunding it is very important to remember there are certain rules and regulations such as Charitable Solicitation Registration. This article from Grantspace http://grantspace.org/blog/risks-and-rewards-of-crowdfunding-for-nonprofits  provides great information on these regulations.

 

Fundraising is imperative for the success of your nonprofit. Remember every staff member, volunteer and board member should be working toward development in one way or another, whether they are soliciting funds directly or just helping people to understand the value of your mission.

Frequently asked questions

What are the best ways for a new nonprofit to start raising money?
The fastest starting points are hosting a community event, running a product fundraiser, soliciting in-kind donations, setting up planned giving, and crowdfunding. Each one raises money and spreads the word about your cause at the same time. Pick one or two to begin with, then add more as your donor base grows.

How can a small nonprofit keep event costs down while fundraising?
Ask local supporters and businesses for sponsorships. In exchange for crediting their business or family, request donated items for auction, food and drinks, invitations, or even free use of a venue. The more costs you cover through donations, the more of what you raise actually reaches the people you serve. Forming a planning committee helps too, since members can solicit sponsors and draw interest from their own circles.

What is an in-kind donation, and why does it matter for a new nonprofit?
An in-kind donation is goods or services given instead of cash, like a donated website, printing, or professional help. It matters because it covers real needs without pulling from your budget, which keeps administrative costs low (something donors pay close attention to). Always record a fair market value for what you receive and track it separately from your administrative expenses.

How does planned giving work, and how do you ask donors about it?
Planned giving is any gift arranged now but given in the future, most often a bequest of cash, stock, or equity from a donor's estate. Because estate conversations feel sensitive, a gentler approach is to find a few loyal supporters or board members willing to commit first, then let them share their plans with others. Writing about their generosity in a newsletter or on your website can encourage more people to follow.

Why is crowdfunding a good fundraising option for new nonprofits?
Crowdfunding works well because it pulls your supporters directly into the fundraising and turns them into fundraisers on your behalf. It can reach a wide audience quickly, and as donors share with each other you gain organic reach that grows your constituent base. Just remember that fundraising, crowdfunding included, comes with rules like Charitable Solicitation Registration, so check the requirements before you launch.

How should a new nonprofit track donations and inventory?
Use donation tracking software so every gift is recorded, including in-kind contributions kept separate from administrative costs. If you sell products or carry inventory, track that as well, and order slowly at first, since unsold inventory ties up cash and can add taxes and insurance costs. An all-in-one platform built for nonprofits, like Argenta, can handle donations, inventory, orders, and reporting in one connected system.