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What is fundraising?
Fundraising is another way of obtaining funding, which is typical for commercial and non-profit organizations. It is a targeted systematic search for sponsorship (or other) funds for implementing socially significant projects (programs, actions) and support for socially significant institutions. Its essence is to attract missing or inaccessible investments, labor, or any other resources for the company from external sources, which can be funded by other companies, individuals, or state and international institutions. Fundraising involves raising funds from various sources. Allocate mechanisms for self-financing and fundraising, as well as attracting resources from external sources.
Fundraising has the following peculiarities:
- it’s not just a search for money, but your work to solve specific problems for which money is needed;
- in fundraising, the main thing is not money but relationships (moreover, long-term relationships between people are desirable);
- at the center of the whole fundraising process is a person (the right person in the right place at the right time);
- fundraising does not extort money but always offers something in return (for example, joy or inspiration to someone who can support the organization).
The key mechanism of fundraising is an endowment (donation). This trust fund is intended for non-commercial purposes, as a rule, for financing educational, medical, and cultural organizations. It is formed mainly through charitable donations or special targeted contributions. The difference between an endowment and a regular charitable organization is the strictly targeted nature of the activity (usually, an endowment is created to support any one organization, for example, a certain university) and the focus on generating income by investing funds.
