WHAT IS FUNDRAISING?
Fundraising is the term referring to the process of soliciting and gathering money by requesting donations from individuals, businesses, charitable foundations, or governmental agencies. Although fundraising typically refers to efforts to gather funds for not-for-profit organizations, it is sometimes used to refer to the identification and solicitation of investors or other sources of capital for for-profit enterprises.
Fundraising is the primary way that non-profit organizations obtain the money
for their operations. These operations can involve a very broad array of
concerns such as religious or philanthropic groups such as research
organizations, public broadcasters, and political campaigns. When special events
are arranged to raise funds, they are often known as fund drives, pledge drives,
or, sometimes when television is involved, telethons. In the United States, many
non-profit organizations take advantage of the services of professional
fundraisers which are paid for their services by retaining a percentage of
raised funds. This ratio of funds retained to funds passed on to the non-profit
is subject to reporting to a number of state's Attorneys General. This ratio is
highly variable and subject to change over time and place, and it is a point of
contention between a segment the general public and the non-profit
organizations.
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Some examples of charitable organizations include student scholarship merit
awards for athletic or academic achievement, humanitarian concerns, disaster
relief, human rights, research, and other social issues.
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Equally important are fundraising efforts by virtually every recognized
religious group throughout the world. These efforts are organized on a local,
national, and global level. Sometimes, such funds will go exclusively toward
assisting the basic needs of others, while money may at other times be used only
for evangelism. Usually, religious organizations mix the two, which can
sometimes cause tension.
Fundraising also plays a major role in political campaigns which, despite
numerous campaign finance reform laws, continues to be a highly controversial
topic in American politics. Political action committees (PACs) are the
best-known organizations that back candidates and political parties, though
others such as 527 groups also have an impact.
While public broadcasters are completely government-funded in much of the world,
there are many countries where some funds must come from donations from the
public. Pledge drives commonly occur about three times each year, usually
lasting one to two weeks each time. Viewership and listenership often declines
significantly during funding periods, so special programming may be aired in
order to keep regular viewers and listeners interested. (Commercial television
interestingly has a similar situation to this, known as sweeps).
Fundraising organizations in the United States are often established for
charitable purposes and are given a specific designation by the Internal Revenue
Service, noted as 501(c)(3), as a charitable nonprofit organization. These
fundraising organizations must outline a mission statement, which states its
main purpose and objectives and its overall policies. A major organizations will
list the programs in which it is involved, the kind of funding it receives, and
how it allocates its expenses. In addition these organizations are rated
annually for both efficiency and compliance by the American Institute of
Philanthropy and other watchdog groups.
Many non-profit organizations receive some annual funding from a financial
endowment, which is a large sum of money that is usually invested to generate a
sizable amount of interest each year. Endowments are generally created when a
sizable gift is received from an individual or family, often as directed in a
will upon the death of a family member. Corporate entities also may also
contribute to endowments, which are often handled by charitable organizations
known as foundations.
While fundraising often involves the donation of money as an out-right gift,
money may also be generated by selling a product of some kind, also known as
product fundraising or in-kind gifts. Girl Scouts are well-known for selling
cookies in order to generate funds. It is also common to see on-line impulse
sales links to be accompanied by statements that a proportion of proceeds will
be directed to a particular charitable foundation.
The source of this article is
Wikipedia, the free encyclopedia. The text of this
article is licensed under the
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