While voluntary work is an important element in most NGOs' activities, obtaining funding may be necessary to successfully realise projects, campaigns and lobbying activities. Obtaining funding is a challenge for many NGOs, and this page aims at giving you an overview on how to go about tackling it. Questions regarding the right of NGOs to access funding have been examined in an ISHR briefing paper.
We are going to consider two types of potential donors: Institutional and individual donors. Institutional donors - such as state development agencies, UN and other international institutions, development banks, or private foundations and charities - may be able to contribute substantive amounts of money to your work and sometimes commit themselves for several years, while at the same time accompanying you throughout the realisation of your project through providing advice and contacts.
On the downside, you may lose autonomy when depending on one single donor. Therefore, some NGOs chose to raise a large part of their funds with private individuals. This allows you to strengthen your independence from state or UN donors and their interests and policies. In particular if you are engaging in advocacy activities, you should consider how receiving large donations from institutional donors impacts on the perception of your independence and thus on the legitimacy of your work. The disadvantage here is that raising your funds with individual donors may be more costly in terms of time and money you have to invest in order to secure the amount needed and to do so on a mid and longer term basis.
Fundraising with Institutional Donors
Keep in mind the following general principles to be followed when soliciting institutional donors:
- Know donors' priorities and grant requirements: Institutional donors usually have clearly stated goals they wish to achieve through grantmaking. Before you contact any potential donor, make sure you are aware of its priorities and conditions. You will increase your chances to actually obtain funding by carefully matching your proposal to the donor's grant requirements (thematic or regional focus, amounts to be allocated to projects, etc.). Gather as much information as possible before formally submitting a funding request - the first contact may proof decisive, and you have to make a good impression by showing that you understand a donor's priorities and that you can effectively contribute to their realisation. Using language and expressions outlined in grant conditions may help convincing your potential donor.
- Use and extend your network: Donors may be more inclined to fund projects of organisations they know. Therefore, it is important that you constantly aim at extending your network and that you let people know about your work. If a donor is aware of past successful projects realised by your organisation, this may increase your chances to secure funding for new projects. Make your organisation known and create a reputation for it. In the end, it is all about credibility!
- Be clear about your goals and how you want to achieve them: Condition for any successful funding request is that you be in a position to justify why your project is needed, to clearly state your goals and to show how you are going to achieve them. Be as specific as possible, and show the concrete impact your project will have on your stated goal.
- Establish a detailed and realistic budget: Donors want to know what you are going to do with their money. It is therefore important that you provide a detailed budget that states expected expenses along specific categories. Break expenses down as far as possible: donors usually do not like budgets that anticipate 60% of non specified "administrative expenses"! And be realistic in assessing your own capacities: does your organisation have the necessary expertise and time available to successfully realise the project?
Resources on fundraising
Useful resources about fundraising can also be found on our pages in French and Spanish.
Development Agencies & Other Donor Contacts
Traditional bilateral agencies
European Union & Comission
Introductions to funding from the European Union
A very useful short introduction is given by the publication New funds, better rules. A more extensive overview is provided in the brochure Introduction to the thematic instruments and programmes for 2007-10. For further clarifications, you may consult the Civil Society Homepage which includes a database with a glossary of terms relevant to EU-NGO relations as well as a collection of relevant papers and guidelines.
EU funding - Basic distinctions
- Programmes run by national and local authorities of EU member states: These programmes are financed through so-called structural funds. Applications for these programmes need to be addressed directly to national or regional authorities.
- Programmes run by the European Commission: These programmes are administered either by the relevant Directorate-General (DG) of the Commission or by specific offices or agencies of the Commission (and probably soon also by the newly established European External Action Service). The Commission publishes calls for proposals. You need to send your funding application directly to the European Commission or to one of its agencies.
- Action grant: funding for a specific project of your NGO under a European programme. Normally, these projects have to be co-financed, meaning that the EU does not cover the whole amount needed to realise the project, but your organisation will have to cover the other part. Where justified, it may though be acceptable that the co-funding is done through an in-kind donation, for instance through contributions of your staff's working time.
- Operational grant: funding for the functioning of your NGO in general. Operational grants may be allocated only to NGOs whose aims correspond to a general European interest or form part of a European Union policy. Examples of European Community programmes providing operational grants are PROGRESS (social inclusion, non-discrimination, gender equality), Europe for Citizens, Action 2, LIFE+ (environment) or Culture 2007, Strand 2. See also the full list of community programmes.
- Assistance provided within EU member countries: Resources come from the so-called structural funds, such as for instance the European Social Fund. These funds are often - yet not exclusively - allocated to the social, educational, and environmental sectors. The website of the Directorate-General for Regional Policy provides information on the European Union's action in support of regional development.
- External assistance: Funding in non-EU member countries is mainly provided in the fields of development co-operation, human rights, democracy programmes, and humanitarian aid.
EU External Assistance (funding for countries outside the EU)
For the period 2007-2013, there are five instruments to provide external assistance (an 'instrument' in EU slang being a legal basis to provide funding):
In addition to these instruments, there are also two additional funding opportunities
- European Community Humanitarian Office (ECHO): provides emergency assistance in cases of natural disasters or armed conflict outside the EU
- European Development Fund (EDF): provides funding for development cooperation with African, Caribbean and Pacific countries as well as overseas countries and territories in the fields of economic as well as social and human development, and regional cooperation and integration.
A graphical overview on these instruments to provide external assistance may allow you to better understand which instrument covers what and where. Based on these instruments, the EU funds a number of geographic and thematic programmes for which calls for proposals are regularly published. For the time being, external assistance is implemented by five different DGs. This is bound to change with the establishment of the European External Action Service. A Practical Guide (also called "the PRAG") has been published to explain procedures when applying for EU external assistance.
Identifying EU funding opportunities for your project or NGO
We have compiled a list of EU funding opportunities for you. It includes programmes, calls for proposals and operational grant opportunities from European institutions, for external assistance as well as funding within EU countries.
Funds and Foundations
New / Non-Traditional state donors
Over the past few years, new actors have emerged in the world of aid and cooperation. For an overview on this trend, see a recent article published in The Economist. It could be worth checking with foreign ministries and - where they exist - with bilateral development agencies - if your work fits their conditions of funding. You may in particular check:
New members of the European Union such as Slovakia, Czech Republic, Lithuania, Slovenia or Estonia among others)
Emerging Economies, such as Brazil, India, South Africa, China, Gulf countries
Multilateral Financial Institutions
Fundraising among individual donors
Many techniques of fundraising with individual donors, such as mailings, telemarketing or streetmarketing, are only suitable for NGOs of a certain size. Yet some techniques may also be promising for smaller organisation, in particular in order to raise funds for a specific small scale project, to gain some additional resources to complete your core funding or to support your advocacy activities. Here are some ideas of how small NGOs may raise funds with private individuals, while at the same time creating an opportunity for you to promote knowledge about your organisation by telling people about your project or your cause and engaging in discussions with the public:
- Holding a sales stall: Many NGOs regularily hold sales stalls in busy shopping streets, during the local market or at fun fairs and sell goods that their members have produced (for example sweets, handicraft, postcards etc.). A variation of this could also be to sell items that you have obtained for free from a private business (for example chocolates), based on the understanding that the revenue of the sales will be given to your NGO. Opting for selling items that have a close relationship with your NGOs project (for instance food from the country you are working on) can reinforce PR effect of your action.
- Organising a theme evening in a local business: You may be able to negotiate a theme evening with a local business (for instance a restaurant or a café), where a given percentage of the day's sales revenue goes to your organisation. To obtain such a deal, you will have to propose to the business owner to advertise the event within your network, offering thus a perspective of bringing in more clients than the business would usually get. Here as well you may wish to ad a special note related to your work, for instance through the foods and drinks offered or by decorating the premises in in accordance with your cause or project.
- Organising a or participating in a fun run / charity run / ralley: Charity runs typically are sport events where your members look for sponsors among families and friends who commit to contributing a certain amount for each unit achieved (for example, 1 dollar per kilometer run in a race).
Internet is a central element of communication and fundraising activities. This is why it is important to know the rights steps and possibilities for online fundraising.
Fundraising will be particularly efficient once you acquired a stable advocacy plan.
First step: create a good communication strategy
Like for your advocacy strategy campaign, your fundraising strategy is central since it is the key to the realization of your projects. If you want it to work and raise a sufficient amount of funds, people need to know you are looking for money. This is why communication is the first aspect to focus on, before looking into specific online fundraising methods.
Your website: a brochure for future donors
- Although this might seem obvious, it is too often set aside: your website is the place where online donors will fall on to make their donations. This means it will have a big impact on whether a potential donor goes through with the donation.
- Websites need to be welcoming and simple to use. Other tips like targeting an audience and putting the right pictures are also essential to create a structured website.
- In order to gain donors, your website needs to show clearly the objectives of your action, the methods to achieve your goals, and why the potential donation will help.
Optimize it for smartphones and tablets
- Once your overall website is clear and coherent, the next step is to optimise it for smartphone and tablets, making it possible to make a donation on as many technological tools as possible can only increase your potential donations.
- Tips on how to optimize your website for smartphones will guide you towards a simplified structure to make your website more accessible.
Be present in social media
- In 2013, a survey on online fundraising found that, on average, in a peer-to-peer fundraising campaign 15-18% of donations were referred directly from Facebook. It is no secret that social media has become a platform for non-profit causes to be known. Your NGO should take advantage of these new tools to increase the number of potential donors.
- For Twitter, many tips on how to increase your followers are available on the Internet. This social media is not only a good way to show your NGO and advertise for your upcoming events, it can also be used for fundraising itself.
- Facebook is another central element in social media and should be used for publicity: it can be used to create events and a page specific to your NGO or even to one of your projects. It can be a real asset for online fundraising and should have a direct link to your website and to your donation page.
- Your social media pages can be used to update your supporters: don’t hesitate to send motivational tweets and status updates to remind them of the many ways they can help you, even without directly sending money.
Once you have a dynamic and simplified website, easily accessible from almost anywhere, you should take the time to create a link between past donors and people who have shown interest in your cause. This can be done through an e-newsletter.
Create a dynamic and welcoming e-newsletter
- The newsletter will start by reminding your busy donor that your project is still taking place, and that funds are essential. For an emailed newsletter to become an online fundraising tool, follow these handy guidelines.
- It is crucial to show your gratitude and the advancement of the project: insert pictures and reports, testimonies and future plans for the NGO. Don’t forget to keep the letter straight to the point and easy to read (even on smartphones!).
Step 2: create a simple and visible way for supporters to donate and finance you
Find a ‘Donate Now’ vendor
‘Donate Now’ buttons are a typical tool for online-fundraising: through a button integrated to your website, e-newsletter and other communicational online tools, donors will be able to send you money through secure vendors.
However simple it may seem, creating a ‘Donate Now’ button requires some thinking through. Each vendor offers different features and asks for fees. Finding the optimal vendor is important. Consider these aspects before choosing your vendor:
- Does the vendor offer the right features for you? If you are an NGO working on short, emergency-based programs, you will probably prefer vendors offering social fundraising tools, perhaps with a month-to-month fee so that you can cancel it at any time.
- Are the fees reasonable according to your budget and to the expected amount of donations received? Some vendors ask for high monthly fees, and lower transaction fees. This is the right option if you expect big donations or many donations, since the monthly fee is a flat fee. However, if you are a small NGO receiving little amounts, the monthly fee can end up costing you more then what you receive. Free vendors with higher transaction rates could be a better option.
Examples of ‘Donate-now’ vendors
- Click and Pledge is a vendor specialized for non-profit donations. Its first obvious advantage is its possibilities to personalize your button: it offers social fundraising tools, event management and donations through mobile phones are simplified. It regularly offers introductory webinars to help you use the fundraising features, but the monthly and transaction fees are quite steep, it is therefore important to evaluate the amount of donations you are expecting.
- Network for Good Basic DonateNow offers three different solutions for non-profit fundraising according to your budget and your expectations. It offers a mobile application, event management and more features. Network for Good also offers regular webinars to help you with online fundraising.
- PayPal: Creating a PayPal button is a simple and affordable option. Once you have selected your options, PayPal will give you an HTML code to integrate to your website. The pros of using this vendor are that it is known worldwide so people have a tendency of trusting it. However, it is not specific to donation making, and therefore offers little personalization possibilities.
- Qgiv offers a donation button for 199$ of lifetime set-up fee. Transaction fees vary, according to your method of payment. QGiv’s main asset is that the button is well integrated into your website: this means a nicer final look all while keeping the ‘donate’ button standing out. A free trial is available for you to discover the different features.
Don’t forget: once a donation has been made, you should thank your generous giver by sending a personalized email or landing them on a thank-you page. Not only is this crucial to show them your gratitude, it is also an opportunity to advertise for your NGO: create a page with information about the NGO (statistics, major outcomes, how the money will help) but keep it simple.
How to get the most out of a new donor
- Create as many features to keep your donor informed about your NGO: You should integrate a button 'Tell a friend' , as well as a 'Follow' button for social media, and a button to share directly on Facebook or Twitter.
- When you receive a donation, keep your donor informed: create a dynamic thank-you landing page that includes other links to your NGO projects.
- Follow-up with a thank you email: it shows you care and is a great way to make a one-time donor a long-term one.
- If you have the opportunity, create a thank-you video: this is creative and can give a real overview of the work you are doing. You can show people you have helped in the past or the team working on the project the donor has helped financed.
Launch a ‘Sustainer Program’
Once your website is equipped with the appropriate ‘Donate Now’ button, you should be experiencing an increase of one-time donors.
The next step is naturally to try and make these one-time donors long-term or even lifetime donors, through a Sustainer Program. A sustainer program is a commitment a donor will make by giving a certain amount every month, usually with an end of the year donation in extra. Sustainer programs have shown to increase significantly the amounts of donations made. Keeping donors is not the simplest task but can be achieved by following some key steps.
Creating an efficient sustainer program
- Go through your NGO long-term strategy, and make sure it is coherent, structured and achievable.
- Take into account your past donors: is your NGO attracting mostly developing countries donors or students? If so, your sustainer program shouldn’t ask for much every month. Once again, coherence is the key: give options to reach out for a larger crowd.
- Create a report specifically aimed at long-term donors: show your past successes, your transparency and credibility. People want to know where their money is going, so explain step by step the project, including projected costs, timeframe, etc.
- Show your network: if you are working with known NGO or institutions, show it! This will boost your credibility.
- Follow-up: a long-term donor can always change his mind; it is crucial to keep him informed at any time of any changes or achievements. Show the donor that the money has helped through communication technics. You can even ask your donors for inputs for the projects!
The idea of crowdfunding is to set a financial goal for a specific project and to raise small amounts at a time through many different donors, during a predetermined time frame. Generally, if the amount is not reached on time, the money is given back to donors in cash or to reinvest in another project.
This fundraising tool has been used widely by NGOs and individuals looking to fund small projects. Due to the success of crowdfunding, many different platforms are available.
Like for your sustainer program or you ‘Donate Now’ button, the essential tips to follow are clarity, simplicity and good communication. Crowdfunding mostly attracts small one-time donors so it is important to show them how even a few dollars can help the cause you are working for.
Use Peer-to-Peer fundraising
Sometimes called ‘Social Fundraising’, peer-to-peer fundraising is a new technique to get your supporters to fundraise on your behalf. A supporter can organize an event, use crowdfunding, activities and challenges to ask for funds for your NGO. In addition to being a free option, it has the huge advantage of creating free publicity for your cause. In most cases, these supporters will use social media to communicate about their actions for your NGO, which is why you should use these communication techniques.