Donations are funds or gifts typically given by individuals for charitable purpose or for a particular cause. Donations are typically small cash amounts, but may also take the form of food, clothes, medicine, etc. Sometimes these are referred to as gifts in-kind, or in-kind donations. While the amounts are smaller, donations also have the benefit of fewer reporting and usage requirements compared to grants.
For most new NGOs, donations are the most straight-forward way of securing initial funding for their work. Traditionally, donations would come from friends and family or local community organizations and religious groups. Today, with the increase of easy crowd funding platforms like Global Giving, youcaring, gofundme and others, you can find people all over the world willing to open their wallets and support a cause.
According to a research, compassion and benevolence are an evolved part of human nature, rooted in our brain and biology, and ready to be cultivated for the greater good. The idea of GIVING is growing.
How to get donations
While the process of collecting donations is more straightforward as compared to applying for grants, it is still important to have a strategy.
First thing you need to do is ask. No one will give you if you don’t ask. NGOs may contact prospective donors directly via phone, letter, email, or social media, or other media.
The second step is to convince. Collecting donations from individuals tends to be more direct and personal than a grant application. Individuals seldom conduct due diligence procedures like institutional donors will, but may care more deeply about personal connections. Convince them that you are providing an opportunity to be of service, to be a part of a greater good for a shared purpose.
And last but most significant is maintaining lasting relationship with the individuals. Communication is key. Keep them informed, show them what their help has accomplished, and let them feel personally connected. Show a genuine gratitude by sending them a thank-you note and always update them about the project. Your goal should be to keep them as life-long supporter.
Why look for donations?
Many NGOs, especially small or new organizations, opt to collect funds through donations because:
- Writing a request for a donation is much easier and quicker than a project proposal.
- There are billions more people in this world than there are grant foundations.
- Donations are typically unrestricted and can be used for projects, overhead expenses, etc.
- Donations usually do not require follow-up reports on activities or how the money was spend, although it is still best practice to be as transparent as possible.
- The approval process for donations tends to be much faster than with grants.
- You can create a more personal relationship with individuals.
- Many NGOs begin with collecting donations due to low start-up costs, and are successful enough they see no reason to try applying for grants.
Downsides to donations
While donations are important sources of income for NGOs, there are also some reasons to diversity:
- Soliciting donations have a low barrier to entry, and so there is a lot of competition from other NGOs.
- To start asking for donations is fairly easy, but growing and maintaining your donations base can take a lot of work.
- The average donation size is much smaller than the average grant size.
- Donations can fluctuate depending on mood and what’s happening in the news, so tend to be less stable than contracted grants.
- Individuals are rarely field experts who can provide advice and technical support like donors can.
- Winning a grant from a respected donor provides an organization with a level of respectability individual donations cannot match.