Fund Raising for social work

Fund raising is the process of soliciting and gathering money or other gifts in-kind, by requesting donations from individuals, businesses, charitable foundations, or governmental agencies. Although fund raising typically refers to efforts to gather funds for non-profit organizations, it is sometimes used to refer to the identification and solicitation of investors or other sources of capital for-profit enterprises.

Common sources of funds are (1) local, International donors and government. In this section, we would concentrate only on local sources of fund raising. Now the scenario is changing and even international NGOs are looking for fund raising, e.g. Plan International has targeted 30% of funding from local sources. Often in times of natural/manmade calamities like Tsunami/ Kargil war, organizations engage themselves in fund raising.

Why we would raise funds?

Obviously, it is impossible for any organization to implement activities and projects without certain human, technical and financial resources. Fund raising increases the amount of resources and even helps in development of corpus funds. It also reduces dependence on international and national donor organization, which, often times, may reduce flexibility of implementing innovative/creative ideas and targeting those needs that a community finds important. Fund raising brings sense of ownership among community people and helps organization build social capital and community linkages. Mobilizing local resources increases the sustainability of community initiatives.

Before initiating fund raising endeavour, organizations must check their tax situation. There are two main provisions regarding this – Sec. 80G and Sec. 35 A© of the tax Act. Under Sec. 80 G non-profit organizations working in specified areas (which are deemed to be charitable) can register with income tax authority under this section, which enables the donors (whether individuals or companies) to claim relief up to 50% of the amount donated. The Sec. 35 A © is a more recent one where contributions are 100% tax exempted. It is applicable to specified projects rather than to registered organizations.

 Approval has to be sought from the  National Committee for Promotion of Social and Economic Welfare, Delhi and NGOs generally have to undertake project for 3 years.

Another important issue in fund raising is to develop an ethically sound fund raising policy. It is crucial to list down socially inappropriate activities and not to accept any funds/resources from tainted sources, which may hamper organization’s own image and credibility.

For instance, taking money from cigarette/liquor manufacturing company/people with criminal background for any social cause would do more harm than any good. Further, it is also unethical and unsought for to exaggerate data/information, project beneficiaries as victims, accentuating their vulnerability (whereas in reality they are not so) while  appealing for funds.

Next, understanding psychology of prospective donors on why people give is also necessary.

People donate because –

(i) they may be concerned about the problem;

(ii) may have personal experience of the problem;

(iii)peer pressure

(iv) guilt feeling

(v) duty

(vi) name/fame/ as memorial and

(vii) tax benefits.

For a successful fund raising campaign one needs to identify likely people, create the right message and communicate that right message.

Another point is how much to ask for – it depends on the situation. In crisis situations like earth quack, flood, etc., cash and kind donations are asked for. Asking people to contribute ‘generously’ often confuses them.

Instead, people respond better if a range of options is provided to them. For instance, divide the work into units: 1 sapling planted = Rs.5; 10 saplings planted = Rs.50; one cataract operation = Rs.500. Also linking the amount being asked with cause gives better results, say, sponsoring child’s education/nutrition, etc.

Approaching the prospective donors has many ways – face to face, addressing groups, telephonic conversation, personal letter to known/unknown and circular letter.

One may organize house to house or office to office collection, organize fund raising events, invite celebrity on exhibition/fair/mela, frame appeal, produce occasional newsletters, pamphlets for fund raising, tap religious resources (zakaat appeal before Ramzaan for donation) and so on and so forth. Tapping corporate donors is also one of the important strategies for fund raising. Companies generally donate to create goodwill in the local community, to generate publicity and for tax benefits. Certain examples of corporate giving are – cash donations, sponsoring an event, free office space, free space for workshops, making company facilities available including meeting rooms, printing, designing, lending a staff member, providing expertise/advice and so on. Many times employees agree to have regular amount deducted each month from his/her salary for donations as seen in the case of Helpage in Chennai. In fact, fund raising strategies are becoming increasingly more creative and innovative.