As ironic as it may seem, non-profits need money. Although they operate as non-profiting entities, they require quite of bit of financial backing to get started and to sustain their efforts. From wages to advertising to supplies, the list of expenses for a non-profit can climb well into six-figures, with most of its resources usually going back into fundraising. However, these foundations still face many challenges raising financial support for their initiatives.
To get a better understanding, let’s look at ways that non-profits are currently receiving funds.
Grants
If you are looking to start a non-profit, the first thing that you will probably look to apply for is a grant. Grants are a terrific boost when starting a new non-profit or initiative. These grants may be attained through the government or privately owned foundations and are intended to be used as a stepping off point for awardees. These usually assist in getting the wheels turning in a non-profit or help kick start a new initiative in an already established non-profit. Although a great avenue to obtain funding for a project, the process to obtain a grant may take an upward of 12 months, from application to deposit of funds. Additionally, the process of applying and being approved for any grant is highly competitive and not guaranteed.
Loans
Loans are another route to obtain funds for non-profits; however, the chances of being approved for a loan may be slim for many non-profit organizations. For any lender, reimbursement of funds is a key determinant in whether or not funds will be distributed. Non-profits pose a very high risk, as it’s motivation does not reside in making money. Many non-profits, like any business seeking a loan, will have to provide proof of income or revenue as a prerequisite to being approved for a loan. Therefore, many non-profit applicants rely on other sources of income, not only for themselves but also as proof of credit history.
Donations
Donations are the most important aspect of non-profit fundraising. Non-profit organizations live and breathe through donations from corporations and individual donors. It is the lifeline of these kinds of organizations. However, this is also the area that proves most troublesome for non-profit organizations. Often, unless secured with a corporation or regular donors, fundraising can prove to be an almost fruitless endeavor. Therefore, non-profits are almost completely at the whim of their donations. Whether through recurrent donations or one-time donations, this is unequivocally the most effective way to help any non-profit. It also shows belief in their mission and your support in achieving of the organization’s goals.
Outside of funding the initiatives of the organization, non-profits must also reserve funding for staffing, advertisements, housing, and fundraisers. There are numerous unseen expenses that go into upholding non-profit and many founders subsidize these expenses with their own money, which is soon stretched thin across the many needs of the organization.
Thankfully, with the rise of social media and crowdfunding, there are more avenues now than ever through which non-profit organizations can fundraise and receive donations.
Crowdfunding
Crowdfunding has brought a new wave of life to non-profit organizations, in its donations and fundraising. Crowdfunding websites, such as GoFundMe, Kickstarter and Indiegogo have become the newest platforms for non-profits to reach out of for donations. This avenue of fundraising helps significantly, especially with smaller or one-time initiatives. The biggest benefits of online crowdfunding are its time and cost-effectiveness. With a short introduction, a description of the project and the click of a button, a non-profit initiative can be broadcasted to millions of willing patrons, all around the world. There is no upfront payment or tireless man-hours that are required. On the other hand, this is not a long-term solution to a non-profit that may be looking for a more stable source of revenue. Also, there will most likely be a need to do some additional advertising to bring attention to the initiative’s page on the crowdfunding website, as patrons are inundated with countless petitions everyday. Furthermore, even though it takes no time to post your cause, it may take a while to gain the funds needed. To top it all off, if you do not meet your goal, you will not receive any portion of the donations, so budgets must be well within reason when setting a target figure.
Advertising
Many people grapple with the argument of whether or not non-profits should be allowed to advertise for donations and fundraising. No matter which side of the argument you may support, it is undeniable that no one can know about something that they were not made aware of. Likewise, no business, organization, for-profit or non-profit can expect to gain donors without informing the public and potential contributors to its existence and purpose. Over the years, non-profits have used various means of advertising to get their mission in front of the right eyes and ears. From emails to fun run/walk events to bake sales, nonprofits have enacted the use of countless avenues to bring attention and awareness to their initiatives. Though in recent years, social media has arguably been the most effective form of advertising for non-profit organizations.
Social Media
As demonstrated through the massive success of the ALS Association’s (Amyotrophic Lateral Sclerosis or Lou Gehrig’s disease) Ice Bucket Challenge took over the internet in 2014, social media can have an unbelievable impact in creating widespread awareness about any cause. The Ice Bucket Challenge, as simple as its concept may have been (pouring a bucket of ice water on the challenged individual on camera), rounded up a mammoth $100 million within the first month of it’s going viral, and exceeded that amount in the days and years to follow. For reference, the ALS Association reported a total of an admirable but incomparable $19 million in donations for the entire year of 2013.
The audience has relocated to platforms like Instagram and Twitter and so non-profit organizations are also forced to reposition themselves where they can be seen. However, these platforms have allowed non-profit organizations to become an influencer and a trend, in all the right ways, from its former place of seeming like a beggar of sorts. It also keeps the non-profit organization relevant in the eyes of its followers and donors.
Even temporary video platforms, such as Snapchat or Instagram stories allows non-profits an opportunity to show rather than tell their daily struggles and achievements. For no financial expense, these organizations are able to clearly exhibit the impact of their donors’ contributions on the non-profit and subsequently, the impact on society and the individuals involved. This also builds trust between the viewer and the non-profit, as there is a feeling of transparency.
Video advertising has been a leading choice for many non-profits. With one line of Sarah McLachlin’s Angel: “In the arms of the angel…”, one is almost automatically brought back to images of one-eyed cats and seemingly terrified abandoned dogs. Why? As a renowned author, Mary Catherine Bateson summarizes, “The human species thinks in metaphors and learns through stories.” And one thing that all non-profits possess innately is a story. No matter the cause, there is undoubtedly a story that has fueled the inception of the organization or a story of someone that has been impacted by it. Many people are moved through tear-jerking or powerful imagery and video has proven itself as the most effective for non-profits. However, this form of advertising requires funding, sometimes massive amounts of it.
Therefore, it is empirical to bring awareness to the organizations that not only bring awareness to the problems in our society but also take the extra step to invest in and correct such problems. Non-profit organizations are an essential element in the betterment of our societies. From missionaries in underdeveloped countries to activists peacefully making change one picket fence sign at a time, they all have one goal in mind: making positive change.