What is Fundraising?
So, the first big question is...what exactly do we mean when we say “fundraising”? Fundraising is a broad term that refers to bringing in outside financial support or resources. Fundraising isn’t a direct exchange of goods for service, although sometimes there can be perks given in exchange for donations. Fundraising is when individuals or organizations solicit financial support from other individuals or organizations in order to do their work.
People fundraise for all kinds of reasons. Because of the brutalities of capitalism, individuals fundraise for healthcare expenses and to defray the costs of education. Individuals also fundraise to support their creative ventures like recording albums, putting on festivals, or publishing graphic novels.
Institutions as big and official as universities, museums, and hospitals fundraise for everything from operating expenses and to fund expansion in program offerings or new construction.
And in the middle are plenty of small to mid-range organizations fundraising from mutual aid groups, small theaters, podcasters, bail funds, literary magazines, and just about anything else that you can imagine.
People and institutions donate to fundraising efforts if they believe in a project or an organization, want to see it succeed, and want to give some of their own resources towards that success.
Different Fundraising Models
There are a lot of different ways for people and institutions to raise money. Because we focus on artists and arts organizations here at Fractured Atlas, we’re going to focus on ways for artists to raise money. The basic ways that artists raise money are through crowdfunding, general support, recurring support, and grants.
Fundraising can be either for a limited time or on an ongoing basis. It can be about hitting a specific financial target or raising as much money as possible. Fundraising can support a specific project or be used for ongoing project expenses.
We’ll introduce a few major fundraising models:
Crowdfunding is very common these days. According to Fundera in February 2020, crowdfunding has generated $17.2 billion in North America. Crowdfunding grew 33.7% in 2019 and there were almost 6.5 million campaigns.
Crowdfunding refers to often time-limited, goal-oriented fundraising where you seek donations from your personal network.
Both individuals and organizations can crowdfund. Through personal outreach and by encouraging your network to share the fundraiser as well, crowdfunding can help you solicit small donations from a network of people who are connected to you by a few degrees. Crowdfunding requires lots of outreach to let your extended community know about your project, to encourage them to donate and share the campaign. Depending on the platform, you can offer different incentives to encourage people to donate.
For example, your small literary press might run a crowdfunding campaign to raise $8,000 to get your graphic novel professionally edited, printed, and distributed. Everyone who pitches in $30 might get a copy of the graphic novel, plus more perks if they donate more money.
If you like, you can jump right to the crowdfunding section of this guide.
“General support” isn’t the most thrilling name to describe a way for artists to fundraise, but it is descriptive. General support refers to ongoing support, without a specific budget goal or timeline, that helps you raise money for operating costs like rent, staff, bills, and more.
With funds raised through general support, you have a lot of choice regarding how you allocate those funds. Unlike other methods of fundraising like crowdfunding or certain grants, general support funding can be used however you see fit. Donors have given you funds so that you can continue operating, so as long as you are spending that money responsibly, you can choose to allocate it however will make the most impact for your project.
You can seek out general support by creating a donation page on your website, a dedicated PayPal or Venmo account, or your Fractured Atlas fundraising page. With general support, you want to make it as easy as possible for people to support your work should they choose to do so. You’ll be looking to accrue funds over a long period of time, so you won’t be promoting it through a robust campaign. Instead, you’ll want to make it easy for your audience to support you if they want.
Consider adding the relevant links to your social media bios, your email signatures, or in your program notes.
Artists and nonprofits often run end-of-year fundraisers to solicit general support. End-of-year fundraising is concentrated on your existing donor pool rather than expanding it with new donors and soliciting one-time or recurring donations for general operating expenses rather than crowdfunding for a concrete project. These end-of-year asks can happen via email, physical mail, social media, phone, or a combination of several choices. It all depends on what is best for you and your donor community.
In keeping with holiday feelings of togetherness and gratitude, the messaging for end-of-year fundraising tends to be a mix of thanking donors for their contributions and asking them to give one more time before the end of the year to support next year’s ambitions.
According to Nonprofit Tech for Good, over 30% of giving to nonprofits happens in December, with 12% of annual giving happening in the last three days of the year which means there's money on the table for you and your artwork at the end of the year. Through a combination of holiday largesse, habituated expectation, and a desire to maximize tax-deductible donations, donors are primed to give in November and December.
If you're interested in connecting with your donor community in the final months of the year, check out our introduction to the end-of-year fundraising and our sample fundraising timeline to help you know when to start strategizing, when to send your first outreach email, and how to follow up!
Recurring support is when you solicit recurring (usually monthly) donations. The size of the donation can range from a few dollars per month to much larger sums. This model will be familiar to anyone who has supported public radio or pledged a certain amount of money per month to nonprofits like Planned Parenthood.
This funding model is similar to general support in the sense that money raised through recurring support tends to be used to support a general operating budget. It might also be similar to crowdfunding if you are running a pledge drive to encourage a big influx of recurring support donors.
Artists can use the funds that you receive through recurring donations to develop a better understanding of your operating budget. If you can count on some amount of money coming in regularly, you can build a stable and realistic financial plan. If you use recurring support, you are less dependent on individual grants or the success of a crowdfunding campaign, both of which can be unpredictable.
Like general support, you can include links on your website, email signature, and social media bios for people to become recurring donors for your project. You can also offer the opportunity for recurring support on your Fractured Atlas page.
One powerful strategy to drive recurring donations is the use of donation tiers. Donation tiers are set levels of money that you can use to encourage people to become recurring donors. These tiers often have special names or perks associated to encourage donations at those levels. People might be more compelled to become a recurring donor rather than a one-time donor if they see that you’ve invested the time and energy to build out a system of donation tiers to encourage recurring donations. You might also be able to shift people into a higher tier of donation if they really want a particular perk. Next, you can use donation tiers to target your communication to your funding community. When you’re going through a big fundraising push, you can reach out to the folks who donate at higher levels to request higher levels of financial support. You can reach out to people who donate smaller amounts and ask for donations that might be more aligned with their capacity and their giving history and encourage them to share your fundraiser with their networks if they can’t give any additional funds. You can easily segment your donor community and then tailor your messaging and fundraising asks given people’s current donation tier status.
As far as determining what your giving levels should look like, take a look at your previous donor history to see what your community is likely to be able to contribute. For example, if most of your donors have given you donations between $15 and $40, consider creating tiers in that range.
You can also run a campaign to drive recurring donations. Like a crowdfunding campaign, you might shoot for a specific financial goal in a set timeframe. If you have access to a matching grant, a campaign is a great opportunity to build momentum and get the most out of that match.
Running a campaign to drive recurring support can add urgency and excitement. But it requires a lot of labor on your part to execute. When you incorporate recurring support opportunities into your other outreach methods (including links in your emails and social media profiles), you can bring in funds gradually as people discover your work, with less effort on your part.
Grants are crucial to the arts ecosystem. Grants can be big or small, can be one-time, or recurring over a period of time. They can come from foundations, nonprofits, corporations, or the government.
Grants are sums of money available to applicants who are selected. Individuals, nonprofits, philanthropies, corporations, museums, and other institutions offer grants to artists. They vary in terms of size, who is offering them, what they can be used for, and who can apply for them. Sometimes they can only be used for certain budget items, other times they can be used for general support as the grant winner sees fit.
Some grants are only available to 501(c)(3)s or fiscally sponsored projects. Some will only be available for artists working in a particular medium, or who fit into a specific identity category (Black, LGBTQ, disabled, or undocumented, for example).
Check out the Grants section of this guide for more in-depth information about grants and how to apply for them.