Unit 2 Fundraising course ‫בס''ד‬

This unit will introduce you to the many different ways of generating income for charities and the
importance of diversifying income to ensure sustainability. It will provide a short overview of key funding
sources and allow you to explore the pros and cons of each, considering ROI (return on investment),
resources/capacity and suitability.
Fundraising events
Community fundraising
Crowdfunding
Contracts
Grants (Trusts & Foundations)
Earned income
Corporate Giving
Direct mailings
Building a sustainable funding model through diversifying income streams is crucial for the longevity and
success of any charity. By exploring various funding sources, cultivating strong relationships, and
continuously adapting strategies, charities can ensure they have the necessary resources to achieve their
mission.
Charities can consider diversifying their income by investing reserves, applying for a savings account, or
getting a flexible loan. Some suggest that no one income source should account for more than 25% of an
organization's income. Here are some ways charities can diversify their income to ensure sustainability:
ROI stands for return on investment, which is a financial metric that compares the value of an investment
to its cost. It's calculated by dividing the investment's profit by its cost, and is expressed as a percentage. A
high ROI indicates that the investment's gains are favourable compared to its cost.
ROI can be used to: Evaluate the efficiency of an investment, Compare the efficiency of different investments,
Assess the potential profitability of an investment, Measure the effectiveness of marketing campaigns, and
Develop business plans.
𝑅𝑂𝐼=(𝑝𝑟𝑜𝑓𝑖𝑡−𝑐𝑜𝑠𝑡)/𝑐𝑜𝑠𝑡
For example, if a company invested £10,000 in marketing and generated £17,000 in gross profit, the ROI
would be 70%. Diversifying income can help ensure sustainability by reducing risk and increasing
stability:
• Risk reduction
• Having multiple sources of income can help protect against the risks of relying on one source that could
fail. This can help charities weather economic downturns, job loss, or unexpected expenses.
• Stability
• A diversified income can provide a more consistent cash flow, which can help charities maintain operations
and invest in growth.
• Growth
• Diversifying income can help charities adapt to changing user needs and offer opportunities, which can lead
to growth.

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• Competitive advantage
• A diversified income can help charities offer a broader range of products or services, which can attract
more users.
Here are some examples of how to diversify income:
• 1.Fundraising events: Charities can host events to raise funds, such as fun runs, cupcake contests, galas,
and special events. A fundraising event is a planned occasion that raises awareness and funds for a charity
or non-profit organization. These events can be small or large, and can include a variety of activities, such
as:
concerts, auctions, marathons, neighbourhood cookouts, galas, dinners, competitions, and sales.
Fundraising events are important for charities because they:
Raise funds: Events are a way to gather financial support for a charity's mission.
Raise awareness: Events can help the public learn more about a charity's cause.
Build community: Events can bring people together to support a cause and foster a sense of community.
Connect with donors: Events allow charities to meet with donors and discuss ways to get more involved.
Showcase achievements: Events can be a way for charities to show off their accomplishments.
Charities can run fundraising events themselves, or they can hire volunteer fundraisers. Events can be part
of a national campaign or a one-off event.
• 2.Community fundraising is a way for a charity or non-profit to raise money by engaging with a local
community. It can involve a group of people with a common interest, such as residents of a particular area
or people who benefit from a cause.
Understanding Community Fundraising
Community fundraising is one of the oldest, best known and most resilient forms of fundraising. It involves a
charity or non-profit running events and campaigns to engage with its local community, or asking the
community itself to hold events and raise funds themselves on behalf of the organisation. When done well,
it can mobilise large numbers of supporters, raise substantial sums and increase awareness of and
engagement with a charitable cause.
Central to community fundraising is an engaged, knowledgeable and passionate community that needs to
be mobilised by your fundraising managers and coordinators. It’s their job to set your community fundraising
strategy, engage with your community and build successful community fundraising teams.
We’ll explore each of those points in detail and offer practical advice to boost the success of your community
fundraising.
Your fundraising strategy will be the plan that sets out your organisation’s funding needs over a specific
period. It provides an overview of the actions, timescales, and possible funding resources/approaches that
you need to put in place to achieve the plan.
In your strategy, you can focus on what has been successful in the past and include recommendations for
the future. You should also make sure it’s closely aligned to your organisation’s business plan. (this will be
discussed) Your strategy should help you implement your fundraising campaigns and events, but remember
it shouldn’t be completely rigid – you still want to be able to respond to funding opportunities that come up
unexpectedly.
In your fundraising strategy, you should focus on:

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▪ Setting your fundraising goals: This could be to raise a certain amount, reach a number of people in your
community or engage with specific community groups.
▪ Identifying your target audience: You will likely have more than one, whether parents within the community,
businesses or other organisations.
▪ Communicating with your target audience: You will need to tailor your communications in line with the
needs of your different audiences.
▪ Establishing your fundraising methods: This could include online methods like crowdfunding and social
media challenges or offline methods like community fairs, talent shows or coffee mornings.
Before developing your fundraising strategy, it’s important to look back. Focus on your past successes.
Where did your income come from previously? You can’t implement measurable goals to improve things if
you don’t have an initial starting point. Also think about where you get your best donors or community
heroes? Which sources of community fundraising offer the best ROI? Do you need to diversify your efforts?
It’s also important to do a SWOT analysis. This helps you understand your existing fundraising position as
well as the current climate. A SWOT analysis focuses on the following:
▪ Strengths: What are you good at? Do you have an existing engaged community base that want to get
involved in your community fundraising initiatives?
▪ Weaknesses: Which areas need improvement? Has your online promotion not been up to scratch in the
past?
▪ Opportunities: What’s coming up? Is there an upcoming date in the calendar you can hang your fundraising
efforts on?
▪ Threats: What could prevent you from achieving your goals? Is there increased competition? Will the cost-
of-living crisis impact your potential fundraising?
Analysing each of these areas in turn will help you to build a strategy that’s tailored around the needs of
your organisation and your community.
So, what are good examples of community fundraising strategies?
Macmillan Cancer Support Coffee Mornings provide a fantastic model of a well-executed community
fundraising strategy. First and foremost, it’s a cause that a lot of people care about and have been touched
by in some way. The charity is dealing with an engaged community that want to do their bit. The onus of
running and hosting each coffee morning is placed on the community. The charity simply provides a
fundraising pack and the functionality for community fundraisers to create their own online page. Within
the pack are recipes, a collection box, event posters and games for the event. Having done the hard work
establishing and promoting the event in the first place, the charity leaves a lot of the heavy lifting to its
community of supporters. In 2022, this initiative raised more than £12 million.
Locally we have the Hatzoloh weekly campaign and the ACS £1 weekly donations.
With a simple idea, easy execution and plenty of buzz in online, social media challenges have proved
successful strategies to engage with a worldwide community and grow donations. The most well-known of
these in recent years has been the Ice Bucket Challenge on behalf of the Motor Neurone Disease
Association. This simple online challenge of pouring a bucket of icy water over your head captured the
world’s imagination and raised over £90 million.
Matched giving and online crowdfunding are also often successful community fundraising strategies.
Here are some tips for community fundraising:

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Set a goal: Decide how much money you want to raise.

Identify your audience: Consider who you want to target, such as families, young people, or business owners.
Plan early: Give yourself enough time to plan and don't leave things to the last minute.
Spread the word: Use news sheets, email media, flyers, and local press to generate excitement and ensure
a good turnout.
Get help: If you're planning a big event, ask for volunteers to help things run smoothly.
Get the right permissions: Make sure you have the necessary licenses, permissions, and insurance for your
event. This includes eg. permission to use the venue, sell alcohol, and prepare food.

• 3.Crowdfunding is the practice of raising small amounts of money from a large number of people. The total
raised typically funds a specific project, goes toward general donations for a worthy cause, or drives support
for a time-based initiative. It differs from traditional fundraising in a number of ways, but the most significant
is the importance of setting a target: the fundraiser sets a target, people pledge an amount – usually in
exchange for some form of reward, but sometimes just as a straight donation.
These pledges give a sustainability to the charity. Sustainability allows charities to demonstrate their
commitment to responsible practices and deliver long-term sustainable value
Sometimes, charities will choose to link the ‘ask’ directly to the outcome – and this can be really effective.
However, these claims – for example, "£2 could buy a watering can" - need to be explained. How costs are
arrived at and what these costs include must be communicated to donors. Claims that cannot be
substantiated should not be made, and the language used in marketing materials should be consistent.
Charities should bear in mind the impression given to donors by marketing materials and when seeking
donations. For example, "£2 buys a watering can" is a much stronger statement than "£2 could buy a
watering can" and charities should consider whether such statements can be delivered upon. The former
statement states that a donation of £2 will buy a watering can whereas the latter suggests a watering can
as an example of what £2 could buy.
Remember, you can’t fundraise for something in particular and then say that you decided to spend it on
something else after all. These risks undoing all of the good work that you do in building the donor
relationship.
• 4.Contracts:
Contract income is income a charity receives from a legally binding contract, usually in exchange for
providing goods or services. When considering contracts for charity income, charities should consider the
following:
Tax
The charity may need to pay tax and VAT on the contract income.
Contract terms
Trustees should ensure that the charity can fulfil the contract's terms and that they can provide evidence
of doing so. They should also consider the risks of not fulfilling the contract and how that could impact the
charity.
Full cost recovery

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The contract income should cover the true costs of delivery. If possible, the contract should also contribute
to the charity's running costs.
Treatment of income
Contract income is usually treated as unrestricted income, meaning the charity can keep any surplus.
However, the contract terms may limit payments or restrict the charity's use of any surplus.
Contracting with the charity
If the charity is a corporate entity, you can contract directly with the charity. If the charity is an
unincorporated association or trust, you will need to contract with the individual trustees.

• 5.Grants: A vital source of funding for many charities, grants can come from government bodies, private
foundations, and other organizations.

When filling out a grant application, you can consider including the following information:
• Project description
Include your project title, a summary of the project, and how much money you are requesting.
• Project impact
Explain how the project will benefit its users and why it is important. You can also include how you will
measure the project's impact.
• Project budget
Provide a clear budget that is linked to the activities you plan to undertake.
• Project capacity
Demonstrate that you have the capacity to carry out the project, including the right policies and financial
management.
• Evidence of success
Include examples of recent successes to show your ability to deliver and the impact your organization has
had.
• Community need
Provide evidence of the needs of the communities you are supporting, such as statistical information, letters
of support, or quotes from the community.
• Project timeline
Outline what will happen if your work does not go ahead, and the impact this will have.
Here are some tips for writing your grant application:
• Be clear, concise, and enthusiastic.
• Use simple language and summarize difficult points.
• Proofread your application for spelling and grammar.

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• Get someone else to read your application before you submit it.
• If you are unsuccessful, ask why.
• 6.Earned Income:
Earned income is income that a charity generates by selling goods or services to funders. This can include:
Membership fees
Charity shops
Fundraising activities like raffles or bake sales
Contracts with the government or private sector
Corporate sponsorship
Selling branded merchandise
Renting out a room or building
Earned Income – SAVS
Earned income is one of the main sources of income for charities, along with voluntary income and investments.
In 2019/20, earned income accounted for 41% of small charities' income, and 49% of large charities' income

• 7.Corporate partnerships: These can provide substantial financial support and additional
resources. Partnerships can include sponsorships, cause-related marketing campaigns, and employee
giving programs.
A corporate partnership is a collaboration between a business and a charity, organization, or other entity.
Corporate partnerships can help businesses gain benefits like increased awareness, higher employee
motivation, and increased trust. They can also help organizations achieve their goals and meet their needs.
Here are some tips for establishing corporate partnerships:
Define your goals
Before you start reaching out to companies, you should be clear on why you want to partner with them and
how the partnership will help you achieve your goals.
Identify target companies
Focus on companies that are a good fit for your organization and will deliver for your beneficiaries.
Develop compelling opportunities
Companies can gain a lot from charities, so you should highlight the value you can offer them.
Engage prospects
Use introductions or referrals to secure meetings with your target companies.
Follow up
After your first meeting, follow up with concise notes and enthusiasm to build the relationship.
Share values
Look for businesses that share your values so they can identify with your mission and vision.
Develop criteria
Create a criteria for your ideal corporate partner so you can find a business that aligns with your
organization.

5 Steps to Creating Corporate Partnerships

Have you seen the little wooly hats on top of Innocent smoothies and thought that’s brilliant? Or perhaps
you’ve bought a packet of Pampers that includes a donation to UNICEF?

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There are hundreds of charities working in partnership with companies, but there are thousands more
charities that don’t. Maybe it’s because they don’t know where to start.

Here’s a five-step process for creating corporate partnerships.

Step 1 – Clarify your BIG REASON WHY

Before you start engaging with companies you want to be clear on your purpose or the BIG REASON WHY
(BRW) you want to partner with them. What’s your the goal of your non-profit organization and how could
corporate partnerships help you achieve it?

This BRW should be emotive, brave and inspiring. For example, a hospice’s BRW could be, “In the next two
years we will double the number of people we support so they can live their lives with dignity and peace.”

It’s important to be clear on your BRW from the start. By expressing it you will help create a deeper
connection with corporate prospects, which will mean you secure more and bigger corporate partnerships.

Step 2 – Identify Your Target Companies

Identifying your target companies will help you secure the partners that you want because they will deliver
for your beneficiaries. It will also give you more focus so you don’t waste your time on companies that aren’t
a very good fit for your charity.

You should aim to create a list of your top 20 corporate prospects for your charity. This will probably mean
that you start with a long-list of between 50 and 80 companies. I suggest you look at three criteria for
identifying your top prospects:

Is the company a good fit with your charity?

Does someone in your charity have a contact in that company?
Does that company have the ability to make a meaningful contribution to your charity?
The companies that rank the highest for these three questions can then become your top 20 corporate
prospects.

Step 3 – Develop Compelling Opportunities

Companies can gain huge benefits from charities, such as greater awareness, increased trust and higher
employee motivation. So charities have huge value to offer companies. The way to deliver that value is by
giving them compelling opportunities.

Start by identifying areas of your work that companies are likely to find interesting. For example, a homeless
charity may have a project that enables people to learn new skills so they can gain employment. This is very
likely to appeal to companies because they understand the value of employment and it could offer some
interesting volunteering opportunities for their employees.

The important step here is your proposition. You need to package you opportunity so it’s inspiring, attractive
and relevant to your target company. You should also give a choice of different ways in which they can get
involved along with tangible business benefits.

Step 4 – engage your prospects

Now you’re ready to start contacting companies and the objective is to secure meetings with your target
companies.

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The best way to secure meetings is through introductions or referrals. So you need to know someone who
has a contact at the company. LinkedIn is really useful for seeing where you have contacts, so encourage
all your colleagues and people you know to connect with you. It’s also worth doing lots of networking,
especially at events where your prospects are likely to go.

Once you’ve secured the meeting, you need to ensure you are thoroughly prepared. This means finding out
as much as possible about the company and the person you’re meeting. I recommend you make an extra
effort to gather valuable insight on your prospect, because it will show in the meeting and will give you an
edge on your competitors.

Your objectives for your first meeting are:

Inspire them about your cause

Build rapport
Emphasise the fit between your two organisations
Find out their objectives
Agree to have a follow-up meeting
So the first place to start is by telling them a powerful and emotional story about how your charity changes
lives. When engaging corporate prospects, you want to follow the NSPCC approach to fundraising, which is
“open hearts, open minds, open cheque books.”

Step 5 – Secure Corporate Partner

Immediately after your first meeting you want to follow up with concise meeting notes and lots of
enthusiasm. At this stage your aim is to build the relationship and keep on inspiring them.

You also want to suggest a follow up meeting and this should, ideally, be an opportunity for your contacts to
visit to see the cause first hand. If that isn’t possible then introduce them to someone in your charity who
can talk passionately about the cause.

It’s important to be patiently persistent. So when you believe they are inspired and clearly interested in a
partnership, you can then suggest that you will create a proposal for partnering together. You then need to
pull together an inspiring and powerful proposal that meets their and your objectives.

You can then send them the proposal and arrange a meeting to discuss it in more detail.

Now you’re getting close to securing a new corporate partner, but don’t be surprised if there is more
inspiring, relationship building and negotiation before you get a definite yes.

When they say yes then you pop the champagne…

Find other insights from Remarkable Partnerships on 5 Essential Features of a Corporate Partnership
Strategy.
Direct mail can be a powerful tool for charities to raise funds, build trust, and increase awareness of their
cause. Here are some tips for using direct mail for charity:
Include the basics
Every charity mailing should include the charity's name, registered number, postal address, and an opt-out
option.
Be clear about donations
State how donations will be used, and if working with third parties, how funds will be split.
Use visual content
Visual content can help highlight the importance of your charity's goals.

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Write for charity

Keep it brief, use short paragraphs, and vary sentence length. Use strong titles, front load your main points,
and use simple vocabulary.
Use emotional appeals
Direct mail can provoke emotions, such as reward, excitement, shock, or concern.
Expect good returns
Direct mail can deliver strong returns on investment. The average response rate for direct mail is 4.4%,
which is 36 times greater than for emails.
• 8.Individual donations: Building a loyal donor base requires effective communication and engagement
strategies.
Individual donations to charities in the UK are tax free, which is known as tax relief. The tax relief can go to
the donor or the charity, depending on how the donation is made:
Gift Aid: Charities can claim an extra 25p for every £1 donated through Gift Aid. The donor must be charged
with at least the amount of tax deducted from their donation in the year of donation.
Payroll Giving: Donations are made directly from the donor's wages or pension.
Donations of land, property, or shares: Donations can be made in this way.
Donations in a will: Donations can be made in a will.
Donors can deduct the value of their donation from their total taxable income for the tax year in which they
made the donation. The tax year runs from April 6 to April 5.

• Business planning: Business planning is as applicable to charities as it is to commercial organizations.

A business plan for a charity should include the following components:
Mission, vision, and values: These guide the charity's day-to-day operations and decision making.
Target beneficiaries: Identify the needs of the charity's target beneficiaries and how to best meet them.
Strategic implementation plan: This should include specific goals, activities, timelines, resources, and who is
responsible for each action.
Overview: Include a concise overview of the organization, including its mission statement and key aims.
Risks: Identify the main risks facing the organization and how to manage them.
Resilience: Explain how the organization is resilient enough to meet challenges.
Day-to-day operations: Outline how the charity functions, including the resources needed, people and
organizations to work with, and any legal obligations.
SWOT analysis: Identify the charity's strengths, weaknesses, opportunities, and threats, as well as those of
its competitors.
Biographies: Write biographies for each important person in the charity, including their role and experience.
When writing a business plan, it's important to be honest and realistic about the aims and objectives, and
how they will be delivered. It's also useful to involve key players in the planning process

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Why Do Charities Need a Business Plan?

Ultimately, a business plan is an important document for a charity because it sets out your goals and the
strategies you’ll be using to achieve these goals. Like a business makes a business plan to ensure it will be
profitable, a charity makes a business plan to ensure it can benefit those it sets out to benefit

Step 1: Say Who You Are

The first two sections of your business plan are your executive summary and charity description. In the
executive summary, you’ll need to outline:

Your personal details

Your charity idea
Your mission, goals and aims
The type of organisation you’d like to set up
You’ll then go into more detail in your charity description, where you can talk about where your charity idea
came from and why you believe it’s important to raise funds for this untapped cause.

You’ll also need to think about where you’ll be based and the advantages and disadvantages of this location.

Describe what you hope to achieve in the first, second and third years of your charity running, showing both
ambition for your organisation but also that you know what is realistic to be able to achieve.
You may also want to brush on some of your unique selling points (USPs), explaining why your charity is
necessary in the current climate and what makes you stand out from similar charities who may be raising
awareness and funds for similar or the same cause.
Step 2: Understanding Your Market
It’s important to show that you’ve completed the necessary market research to understand how feasible
your goals actually are. As well as knowing that there’s a community or group of people who would benefit
from the funds raised for your charity, you also need to know that people will be willing to donate to you to
create those funds in the first place.

Use polls or ask people face-to-face about their opinion on your cause, asking how much or how often (if at
all) they’d be willing to donate to support you.

Furthermore, it’s important to know who else is raising awareness or funds for the same or a similar cause
– in the business world, these would be known as your competitors. Check out what they’re doing and how
you could do it better or target a more niche demographic of donors. It’s also great to look at other kinds of
successful charities, who may not necessarily be supporting the same cause as you, for inspiration as to
what works and what doesn’t.

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We recommend completing a SWOT analysis as part of your market research. This helps you to identify
yours and your competitors’ strengths, weaknesses, opportunities and threats, giving a well-rounded view
on where exactly you’d sit in the current market.

Step 3: Day-to-Day Operations

Next, you’ll need to get into the specifics of the day-to-day running of your charity. For this section, you should
outline:

Any resources you’ll need to run your charity

Suppliers and other organisations you’ll work with
Premises of your charity
Equipment you’ll use
Your process for taking payments from donors
Any legal requirements like licenses you’ll need, e.g. for preparing food
Any insurance you have or will need
You’ll also need to write a small biography for each person who is important to the running of your charity,
including their role and their experience showing why they’re perfect for the role. Important people include
the management team and any trustees. If this is set to change in the immediate future, make sure to
include an overview of any planned changes to your management structure.

Finally, using your SWOT analysis, write down any skills gaps you have in your team and how you plan to fill
these gaps.
Step 4: Social Impact
Whereas a regular business would need to see a financial return, a charity also needs to show a social
impact. This is the difference you make for the communities and people you work with, and one of the most
important parts of your charity business plan.
As well as saying what kind of impact you want to achieve for your chosen cause, you’ll also need to state
what you’re going to measure to prove this impact and how you’re going to measure it. And, not forgetting,
how you’ll use your learnings to keep adapting your processes.
Another important question to ask yourself for this section is: how are people going to find out about your
charity? Luckily, we’ve come up with 20 budget-friendly charity marketing ideas to help give you some
inspiration!
Step 5: Finances
In this section, you’ll need to outline your costs and expenditure. As great as your charity idea is, it’s nothing
without a well-thought-out financial forecast.

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You’ll need to include:

Predicted costs and expenditure (using research to back this up)
Main source of income (donors, trustees etc. and what you’d expect them to give)
Pricing strategy if you plan on selling products or services to fund your charity
Cash flow forecasts
Costs table

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