Define about the fund raising and explain the various methods of fund raising by NGO's

     MSW Notes > NGO Management 

5) Define about the fund raising and explain the various methods of fund raising by NGO's. (May 2019)

Discuss the various fund raising methods by NGOs. (September 2022)

Discuss the importance of Fund raising in NGOs? Explain the different methods adopted for doing this. (August 2023)

Answer: Fundraising in NGOs: Importance and Methods

Introduction

Non-Governmental Organizations (NGOs) play a vital role in addressing social, economic, and humanitarian issues. However, unlike business enterprises, NGOs do not operate for profit. Their activities rely heavily on external financial support. This support, known as fundraising, is the systematic process of mobilizing money, materials, and other resources from individuals, institutions, governments, and corporate sectors to sustain NGO activities.

Fundraising is not merely a financial task—it is a strategic process that builds trust, develops partnerships, and creates long-term sustainability for voluntary organizations.

 

Meaning of Fundraising

Fundraising refers to the process through which NGOs mobilize resources to support their programs, projects, and operational costs. It is not limited to money; it also includes in-kind donations, volunteer time, technical expertise, and other resources.

Definition:
“Fundraising is the planned process of soliciting and gathering voluntary contributions by engaging individuals, businesses, charitable foundations, or governmental agencies.”

Example:
When an NGO running an orphanage appeals to the public for monthly donations or seeks CSR funds from companies, it is engaging in fundraising.

 

Importance of Fundraising in NGOs

1. Sustainability of Programs

Without consistent funding, NGOs cannot sustain their projects in health, education, environment, or community development.

2. Expansion of Activities

Funds enable organizations to scale up their activities to reach larger populations.

3. Innovation and Experimentation

Funding supports pilot projects and innovative approaches to social problems.

4. Capacity Building

Funds are required for staff salaries, training, and organizational development.

5. Independence and Autonomy

Diversified fundraising sources reduce dependency on a single donor and enhance independence.

6. Emergency and Relief Work

During natural disasters or pandemics, immediate funds are critical for relief measures.

Example: During the COVID-19 pandemic, NGOs like GiveIndia raised funds from citizens and corporates to supply oxygen concentrators and medical kits across India.

 

Methods of Fundraising by NGOs

Fundraising methods vary depending on the size of the organization, target donors, and nature of programs. Below are the major methods:

 

1. Individual Donations

One of the most common sources, where individual citizens contribute voluntarily.

·        Modes: Cash, online transfers, cheques, crowdfunding platforms.

·        Advantages: Builds community participation and ownership.

·        Example: CRY (Child Rights and You) mobilizes lakhs of individual donors annually through online campaigns.

 

2. Membership Fees

NGOs may have a membership-based structure where individuals pay a nominal fee to become members.

·        Benefit: Provides regular and predictable income.

·        Example: Local cultural associations and self-help groups often adopt this method.

 

3. Grants from Government

Governments provide grants-in-aid for social development programs.

·        Ministries like Women and Child Development or Social Justice and Empowerment support NGOs.

·        Example: An NGO running a women’s shelter home may receive grants under the Swadhar Greh Scheme.

 

4. Corporate Social Responsibility (CSR) Funds

As per the Companies Act, 2013, large companies in India must spend 2% of their profits on CSR.

·        NGOs partner with corporates to implement CSR projects in education, environment, and health.

·        Example: Tata Trusts fund NGOs in rural development and healthcare.

 

5. Foreign Funding (FCRA)

International donors provide funds for development projects. NGOs receiving foreign donations must register under the Foreign Contribution Regulation Act (FCRA), 2010.

·        Example: UNICEF, World Bank, and other international bodies support Indian NGOs.

 

6. Fundraising Events and Campaigns

Events such as charity dinners, marathons, concerts, and exhibitions are organized to mobilize funds.

·        These also create awareness about the NGO’s mission.

·        Example: NGOs like Akshaya Patra Foundation hold fundraising galas to support their mid-day meal programs.

 

7. Online and Digital Fundraising

With the rise of social media and technology, NGOs increasingly use online platforms.

·        Methods: Crowdfunding websites (Milaap, Ketto, ImpactGuru), mobile apps, WhatsApp appeals.

·        Advantage: Reaches global donors with low cost.

·        Example: Many NGOs used crowdfunding during Kerala floods (2018).

 

8. Sale of Products and Services (Social Enterprise)

Some NGOs create self-sustaining models by selling products made by beneficiaries.

·        Examples:

o   Handicrafts made by women in self-help groups.

o   Khadi and Village Industries products.

·        Advantage: Promotes self-reliance and reduces donor dependency.

 

9. Sponsorships and Partnerships

Businesses and philanthropists may sponsor specific programs like education of children, health check-up camps, or cultural events.

·        Example: Sponsorship of a child’s education for one year.

 

10. Legacy and Endowments

Some individuals leave wills, property, or endowments in favor of NGOs.

·        Provides long-term financial security.

·        Example: Several hospitals and universities in India were originally funded through endowments.

 

11. Volunteer Contributions (Non-Monetary)

Though not direct money, volunteer time and expertise reduce operational costs and act as a form of resource mobilization.

·        Example: Doctors volunteering in free health camps organized by NGOs.

 

Challenges in Fundraising

1.     Competition among NGOs for limited donor funds.

2.     Donor fatigue due to repeated appeals.

3.     Stringent regulations under FCRA and government guidelines.

4.     Lack of professional skills in communication and marketing.

5.     Transparency issues that affect donor trust.

 

Strategies for Effective Fundraising

1.     Diversification of Sources – depending on multiple funding streams.

2.     Transparency and Accountability – publishing audited reports to build trust.

3.     Building Relationships – long-term donor engagement rather than one-time appeals.

4.     Use of Technology – adopting digital platforms and social media campaigns.

5.     Professional Fundraising Teams – trained staff to manage donor relations.

 

Case Example

Akshaya Patra Foundation

·        Uses CSR partnerships with corporates like Infosys and online fundraising campaigns.

·        Runs the world’s largest mid-day meal program for school children.

·        Illustrates the diverse fundraising strategies required for large-scale operations.

 

Conclusion

Fundraising is the backbone of NGOs—without it, even the most innovative programs cannot sustain. It ensures financial stability, community participation, and expansion of services. The methods of fundraising have evolved from traditional individual donations to modern digital campaigns and corporate partnerships.

For social workers and NGO professionals, mastering fundraising strategies is essential not just for financial survival, but also for building trust, creating social impact, and ensuring long-term sustainability.