This section provides ideas and information based on raising funds from individual donations.
It is estimated that individuals donate around £9.5 billion to charity annually, around 1/3 of fundraising charities’ income. Let’s start with an introduction to individual giving.
How do people give?
Cash or non-cash giving? Cash giving is spontaneous, immediately rewarding, and the most popular way of individual giving. Almost half (48%) of individual donors make cash gifts in pubs, shops, churches and club collections, face-to-face fundraising, tins in street collections, in envelopes distributed door-to-door, sponsorships, fundraising events from jumble sales to gala dinners, and one-off initiatives at special occasions.
Planned, committed and regular – or spontaneous giving? The largest gifts are made through non-cash methods such as cheques, direct debits and cards. Sometimes called ‘regular giving’, such approaches involve more considered giving, and usually bigger donations. Cheques are still the most popular non-cash method. But the fastest-growing non-cash approach is direct debit. This is now used by 29% of donors, it is the holy grail of individual giving – regular, committed and longer-term.
The most popular approach is Gift Aid, which accounts for 90 per cent of tax-effective giving. Gifts made through Gift Aid mean that the charity can claim up to 25p in the pound back from HMRC on every gift made by a UK tax-payer, a substantial boost. UK charities receive an £850 million pound bonus on individual giving through reclaiming tax. To claim tax back through Gift Aid, charities need a donor to provide basic contact details, and to sign a declaration that he/she is a tax-payer and wants the charity to claim back the tax. For major national TV fundraising campaigns like Comic Relief, this can be done over the telephone, as long as donor details are captured and later followed up. Higher-rate-tax payers get a personal income tax-relief, in addition to the basic rate tax paid back to charities.
An alternative way for people in work and on PAYE to give regularly and tax-effectively is ‘payroll giving’. Donations to charity are automatically deducted from pay before tax is paid. So, unlike Gift Aid, the tax-relief goes directly to the donor. Some people think this way of giving is a no-brainer, and yet only 3% of the workforce gives in this way. Payroll giving takes a little setting-up, as employers need to sign up to the scheme, and a payroll giving agency is needed to distribute donations. But once it is going, it provides for regular long-term tax-effective giving.
Gifts of shares, and property (and of course, legacies)
Individuals give around £350 million of shares and property to charities each year, attracting personal income tax relief on the full current market value of such gifts. And charitable legacies are exempt from Inheritance Tax.
Direct marketing is talking to supporters so they end up responding with a donation. There’s lots of ways of talking to supporters, the main four are these:
Good copy starts with great stories. You might have a project you need funding for e.g. playground equipment, so you might start by writing to all your members or clients, asking if they can support your project with a donation. Use photos and try to be engaging, and be clear about your ‘ask’.
A local or community approach to fundraising is by definition very specific and targeted. It involves building a relationship between your organisation and the people who give you money and support your aims and activities. Think about your community in broad terms. It could include:
Choosing fundraising activities – there is a multitude of potential fundraising ideas available. Key points to remember with fundraising activities
Numerous small events are labour intensive but can turn around money quickly. Example include:
Large events are complex to organise and plan but can generate significant money. Examples include:
Be sure to tell people about what you are doing: get local press involved, include community leaders, pay for advertising. Use your website if you have one, to check information and pass on information.
Implementing your fundraising activities
Collections can be an effective way of raising money. They can be cheap to run and can also help raise your profile within your area. Standing on your local high street means you can directly talk to people and let them know what you do.
How to run a collection – Other than the initial costs of buying tins/buckets for people to put their money in, there is little financial outlay. There is a big cost in time and people. Think about the following to get the most out of your collection:
Think about when people will have time to engage with you.
Other types of collections
Legacies are a major source of income for many non profits. Effective legacy marketing and promotion can pull in legacies quicker than most people think (as soon as two years) but it is a medium term strategy.
Many non profits benefit from legacies not just charities, but the charity sector is a major beneficiary getting a round 6-7% of their income from this source. While nonprofits of all sizes benefit from legacies, the larger household names benefit most. But this need not be so. Smaller organisation’s which have good affinity with supporters can achieve legacy income if they seek it appropriately, but relatively few do seek out legacies.
There are two kinds of legacies:
The codicil is a short, simple legal document which can be appended to a will which can easily amend an existing will to add a fixed sum (effectively a donation) to be given to a nonprofit
Getting started with legacies – If you are at the beginning of seeking legacies actively, the best place to start is among your existing supporters and/or existing service users. Tell them clearly how they can mention you in their will and encourage them to tell you, so as you can build a relationship.
There are more ways than ever before to raise money online. That can be empowering for charities, especially those with limited budgets, but it can also be hard knowing where to begin. Some types of digital fundraising include:
In terms of online fundraising, you may be asking for:
What makes for an effective digital fundraising?
A good example of a fund raising website is JustGiving which allows you to create a page for your charity or group and then share it through friends and other networking sites to raise money. More information on this scheme can be found at: www.justgiving.com/