Fundraising is one of the most vital aspects of any organization. Whether you need money for an educational, scientific, philanthropic, creative, or business-related cause, comprehensive knowledge of how and where to solicit funds is essential. WeDidIt helps nonprofit organizations raise money through engaging crowdfunding campaigns. But for the past twelve months, we’ve been coming at fundraising from all angles in order to finance our own business as well as advise our nonprofit clients in fundraising.
In our initial conversations with our current clients, one of their biggest concerns was that online fundraising – and crowdfunding in particular – is a new(ish) model of raising money. They were concerned that if they launched a WeDidIt campaign, the fundraising they did with us would be a replacement to previous methods of fundraising. This isn’t the case at all. Crowdfunding is an excellent way to reach potential donors who you wouldn’t have access to through more traditional channels.
An important rule in raising money that we tell our clients and follow ourselves is that you should capitalize on every opportunity to raise funds that you can. As we continue to grow our own company, we’re continually seeking new opportunities to raise funds outside of our general sales operation.
Here are the five sources we used and considered for raising capital:
1. Business Plan Competitions. After we finalized our business plan, we researched and applied to several business plan competitions and eventually won the MillerCoors Urban Entrepreneur Series. A solid business plan is a must if you’re thinking of entering a competition, so get yourself some good business plan software to improve your chances.
2. Business Accelerator/Incubator Programs. We’ve applied to at least a dozen accelerator programs over the last 12 months from TechStars New York to Y-Combinator in Silicon Valley. Although we didn’t join any of the accelerators, the interviews and process was rewarding because it made us think about our startup venture in very productive ways.
3. Crowdfunding Project. We launched a crowdfunding campaign directed at our friends and family through our own software and website. The costs were minimal and the returns were better than we’d expected. We raised 127% of our funding goal and showed the world that crowdfunding does work.
4. Investors, Friends & Family. We reached out to people we knew that we thought could help. This wasn’t always asking for hard cash, but for networking opportunities and advice as to where to look for funding. When courting investors, make it a priority to get in bed with investors who can also add strategic value to your startup or organization. Great investors have money AND experience. Use them both!
5. Bank Loan. Loans are one of those resources that make the most sense when your organization has sufficient enough cashflow to handle your monthly loan payments. If you’re a startup still discovering your business model, loans may not be for you. But if you’re fortunate enough to have significant cashflow already, a loan can provide you smart capital without the loss of equity.
Seize as many opportunities to raise capital as you can and don’t think that one fundraising project will replace another. It’s like when you were younger – if you get an allowance, that’s good. If you get a job, that’s great. If you can get an allowance and have a job, you’re doing it right.
To learn more about WeDidIt, check out their Small Business Spotlight featured on Up and Running last week.
Fundraising image courtesty of Shutterstock