Tips on raising funds for your charity

As a charity or not-for-profit organisation, it can be tricky to have a steady flow of income year after year. Sustaining your organisation requires a wealth of support from your local community, but over the years, the digital age has flourished to help charitable organisations successfully stay around for the long haul.

There are a number of ways you can look for funding, not just locally, but thanks to the power of the internet, globally.

Foundation Grants

There are many foundation grants that support charities, but as always, there is heavy competition year after year. In order to stand out, you choose the grant that aligns with your organisation’s ethos, so your application is stronger.

When crafting your grant proposal, be sure to include key highlights and success stories from the past that relate to the donors; it can show your existing support and demonstrate the potentially fruitful destination of their grant. This isn’t to say if you’re a newer charity you won’t be applicable for a foundation grant, just be sure you meet the criteria for the grant you wish to apply for.

Be specific with your funding request so it is clear to the foundation what they are giving money for, ideally something new and tangible. Avoid using the vague descriptions such as administration costs and be clear of the expected budget and timeframes for outcomes to be achieved.

Crowdfunding Campaigns

Currently one of the more popular methods of individual and charity funding is crowdfunding campaigns. Crowdfunding allows you to broadcast your project or cause with the ultimate aim of securing pledges towards a specific monetary target.  

Crowdfunding allows you to build up more than just your finances – it’s a free marketing tool that gets the word out about your cause to influencers in the industry as well as the general public. Links to / from social media platforms and bespoke hashtags can further increase awareness and help build your profile.

External funding is not the only way to improve your finances. Being financially savvy with your existing connections and built-up funds can reduce the burden of generating new donations:

Be Tax Efficient

An extra 25p for every £1 donated can be claimed from HMRC through gift aid, however this can only be done if the donor completes a gift aid declaration.

If funds are raised through donating platforms then the gift aid declarations must be completed by the donor when the charitable payment is made. Gift aid is claimed at this point and paid into the charity’s bank account.

For donations made direct to the charity then then charity is responsible for obtaining a gift aid declaration from the donor. If no declaration is made, gift aid cannot be claimed. The difference it can make to a charity’s finances can be substantial - it is therefore an absolute necessity to promote gift aid at every opportunity.

Invest

With the rise in the cost of goods and services often outpacing interest rates you could secure in a charitable account, leaving your funds in cash for any significant period of time could be detrimental to the long-term strategy of the organisation. Whilst investing can be risky, as part of a balanced portfolio of assets, an investment could help the charity maintain the buying power of its funds or indeed potentially provide some valuable growth.

The governing document will need to be reviewed but there are an array of options available to charities, including investment in shares, property purchases to generate rental income or for short term requirements, fixed deposits. Even a switch to a different bank account could generate a greater level of interest. Professional advice can be sought in this regard but as a minimum you should look to carry out a routine review of your finances.

What to do after you secure funding

• Send thank you letters to donors to let them know how their money is being spent. Make them personal too – this can help build loyalty.
• Continue to communicate regularly with your donors and funders about what’s going on with the organisation – whether that’s through postal correspondence, email and/or social media.

There are many ways to obtain new funding for your charity, but it is important not to forget your existing finances and donors. Regular reviews, prudent investing and maintaining good relations with your stakeholders can ensure you get the most out of what you already have.  

To find out how we can help as your specialist charity accountants, get in touch today.