How do I know my organization is ready for fundraising?
Believe it or not, some nonprofit organizations don’t have to fundraise. For example, those that are supported entirely by membership dues or act as a social enterprise may not need to raise funds beyond those they already have. However, they are always trying to get people interested in signing up or investing in a cause or mission.
So when is it time to start fundraising? The moment you decide there is a mission or cause that requires the support of many to bring about meaningful change. That said, to ready yourself for fundraising, it’s advisable to apply for and gain 501©(3) status, along with tax-exempt status in your own state. This will enable individuals’ donations to be tax deductible and meet the requirements of philanthropic funders. This is especially important if you anticipate ongoing fundraising targeting multiple sources. However, gaining 501©(3) status may not be necessary if you’re considering a one-time event such as a conference or film festival.
Fundraising also requires you to have your finances in order. Having accurate and verifiable financial records is a key consideration for many donors. At a minimum, individuals want to understand how much of their donation is going to the program(s) and the difference it will make. In fact, foundations expect it, along with a higher level of reporting, often including audited financial statements.
This section helps to outline some of the steps associated with developing a fundraising plan and offers resources to support you in that effort. For more information on the legal and financial considerations associated with fundraising, see Legal and Finance, respectively.
Finally, to advance a truly successful fundraising effort, you’ll need to have your brand in order. This is your organization’s identity; it’s who you are. Effective fundraising requires potential donors to be aware of, understand and feel a connection to your brand. This is important: Any development effort conducted before a brand is established is likely to fall flat.