You have a great idea or purpose for a charity and are ready to set things up or have just started. You have a lot of questions, one of the most important being: "How do I get funding for my charity?"

It can be a very difficult process, but the good news is there are plenty of avenues to explore. Looking into each one and deciding what’s right for your charity can save you a lot of time. This is because choosing the wrong avenue can waste a lot of time. 

This article will mainly explore various funding opportunities and how to get large amounts of financing (anywhere from £5,000+) to set things up. Rather than smaller one-off donations.

Individuals

Individual philanthropists can be a fantastic source of funding. They will typically need to have a very high income or high amount of wealth to be able to afford to fund charities and give away such large sums.

One of the key benefits of going to an individual is that you can sit down face to face and have an honest and open conversation. You’ll be able to find out what motivates them to give, and why they’re interested in your registered charity specifically and then give them information from there.

This is useful because you don’t have to think so heavily about prioritising which information to say where on a form etc. you can simply have a conversation.

One major difficulty with this option is finding an individual who might be interested. High-profile wealthy people will often be inundated with requests to such an extent that they might have to spend literally all day every day reading them.

For that reason, if you try to contact them, their contact details often won't be obvious and typically, the person themself won't end up reading your communication.

How do you find a philanthropist?

The first option might be to see if you can find any free events within giving networks. If you can, it’s worth going to these events and chatting to as many people as possible about your idea to see if anyone is interested.

If you find someone who is willing to help, try asking them if they might consider donating or if they know someone who would.

A second option is to try and get some media coverage, often smaller publications still have quite a large readership and are open to stories. You never know who might end up reading the article. If you’re able to highlight in the story the need for funding, you might be fortunate, and someone could get in touch.

A third option is to try and find people who can afford to give away large sums, who are not hyper-high profile and who have some evidence of being sympathetic to your charity’s cause.

For example, if you are running a charity focused on nature conservation, you might research some successful business people who most people haven’t heard of that have mentioned in interviews that they like to be outdoors or like animals.

You could try writing to them. The combination of the personal touch, alignment of the cause and not being inundated with requests might mean they agree to meet. 

Charity crowdfunding sites

When it comes to crowdfunding, the most popular sites are GoFundMe and Kickstarter. GoFundMe is a great place to start if you want to raise money for your charity. It allows you to create a campaign and customise it however you like.

You can also choose whether or not the campaign is public or private; public campaigns may get more attention, but they also expose your personal information (and possibly even your identity) online.

There are no upfront costs involved with using GoFundMe, there is a small transaction fee on each donation, which in the US is 2.9% + 30 cents, and in the UK, it’s 2.9% + 25p. GoFundMe also allows donors to leave a tip which does not go to your organisation, but to GoFundMe, this is part of how there are no upfront costs to individuals. 

You might find that Kickstarter is more tailored towards businesses than you’re looking for with your charity, but it’s worth having a look at to make sure. Here’s what Kickstarter say about using its platform for a charitable project:

Not-for-profit organisations and charitable organisations can use Kickstarter to raise funds for specific projects or endeavours, making something new and shareable, but not for general support for their cause or mission.

Crowdfunding can work really well, and in fact, Greater Change got its initial funding by doing a donation-based crowdfunding campaign. The main downside to crowdfunding you should consider is that it will require a lot of time and energy and can be hard to do without some upfront costs.

The potential upfront cost can arise when putting together a campaign video, advertising the campaign or any complex documentation required for the campaign. In Greater Change’s case, we prepared the documents ourselves using in-house expertise, found a small video production company that kindly agreed to create the video and used free organic social media advertising.

These may not be the right options for you though. So you should consider your own circumstances and consider the right option for you. The time and energy element comes from pushing the campaign and finding donors.

In GC’s case, we had to volunteer to crowdfund managers, both with experience in running campaigns and putting in significant time. Our founders were also working on it a lot, speaking with potential donors and talking to local media.

Loans

It is possible to get loans for charities, and some lenders will consider registered charities. If you research, there are some organisations that will offer favourable terms to charities as they seek a societal and financial return on their capital. You should think very carefully about taking out a loan for your charity and take professional financial advice before doing so.

This is because it is a large financial commitment, and if you can’t repay the loan, it may lead to you losing assets, the charity being wound up, or both. If your organisation doesn't own any assets, you might have difficulty getting approved for a loan since most lenders require collateral before approving these types of transactions.

Earned income

As a non-profit, you may want to consider earning income. One benefit of earned income is that it will make you less reliant on donated income, which is important because that money might dry up.

Additionally, it can take a lot of the organisations’ time and energy to get that donated income, so earning the money may free up more organisational time. Another benefit of earned income is that if your organisation isn’t using donated money because it doesn’t need to, it could enable other charities to benefit from that resource.

Earned income is money that you receive from clients and customers in exchange for products or services. Here are some ways in which your charity can earn money:

• Charge for services
• Get paid for goods sold
• Sell advertising space on your website or in printed materials
• Sell donated goods (a typical model of charity shops)

Corporate Philanthropy

Corporate philanthropy is a form of corporate social responsibility (CSR) in which companies donate money to charities. Companies may also provide financial support to charities. This is popular amongst companies.

For example, in 2016, FTSE 100 companies donated £1.9bn to charities. If you are just starting your charity, you’re probably better if you try talking to smaller businesses than FTSE 100. This is because these big established businesses typically prefer to support more established charities. Having said that, many bigger businesses have programs you might be able to benefit from, such as:

• Donation matching programs - where if an employee chooses to give to your charity, their company will match it.
• staff time volunteered by employees through work experience schemes or other initiatives, such as company volunteering days.

In terms of seeking out smaller or medium-sized businesses, try and think about organisations that family or friends work at. It may be easier to get a foot in the door with these. It’s also worth researching companies' previous donations to get an idea of if they give at all and to what causes. 

Foundations

Foundations are charitable organisations that exist to provide financial support to other non-profit organisations. They can be established by individuals, families or corporations as well as by governments.

The mission and purpose of a foundation are distinct from that of the organization it supports. For example, while a hospital may focus on providing medical care to patients through its staff and facilities, a philanthropic foundation might support the same hospital's research into new treatments for cancer or heart disease.

When thinking about getting funding from a foundation, start by researching foundations that give to your charity’s cause. Then have a look at their giving criteria and see if you’re eligible.

Finally, if you’re quite a new charity, try to do some research on past giving by that foundation to see if they’ve funded any newer organisations. If they haven’t, it may be worth moving on rather than filling in the application (particularly if the application is lengthy).

Grants from local, state, and federal governments

Grants from local government, state government and also federal governments are a great way to get funding for your charity.

• The amount of grant funding available and what types of community projects are prioritised vary a lot from country to country 
• Grant funding is typically available from all levels of government
• Funding is often awarded on a competitive basis, meaning that you need to apply for grants and show why you deserve the money over other registered charities who also want it. This can be hard work, but it's not impossible

Conclusion

There are a wide variety of ways of raising money to fund your charity. In fact, when you look online, there are so many different funding sources that it can sometimes feel as if it will be quite easy to get funds for your registered charity, but don’t be fooled! Getting funding for a charity, particularly a new charity, is often hard work and extremely competitive.

Given that, if you’re looking for funding, remember to research your options and think about what type of funding will work best for your organisation. Also, think about which type of funding you are most likely to get some success with.

For example, if you’re charity has an obvious route to earned income, this might be the best option for you. This is likely to save you a lot of time in the long run - spending money trying to get the wrong type of funding can cost you a lot of time! You may be surprised at how many different types of funding are available!

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