Fundraising plays a vital role in generating income and raising awareness for charities of all sizes. Whether you’re a small, community-based organization or a national charity, having an effective fundraising strategy is crucial to ensuring long-term sustainability and impact.
However, there’s no one-size-fits-all approach. The success of any fundraising activity depends on understanding what works best for your organization and your donors. Beyond raising funds, successful campaigns require responsible management, accurate record-keeping, strong governance, and robust financial oversight.
In this blog, we will explore the primary types of fundraising and highlight the key governance, compliance, and financial considerations that charity leaders and trustees should be aware of.
Main Categories of Fundraising
1. Community Fundraising
Community fundraising relies on the support of volunteers and individuals who organize events to raise money on behalf of your charity. While these events are often informal, funds raised must be properly recorded and reported. Engaging a charity bookkeeping service or an outsourced finance team can help ensure that these activities are correctly accounted for and compliant with the Charity Commission’s guidelines.
2. Corporate Fundraising
Corporate fundraising involves businesses supporting charities through donations, sponsorships, or employee-led events. Your organization could be chosen as a company’s charity of the year or receive in-kind support such as staff volunteering or donated services.
To get the most from these partnerships, regular communication and a well-managed relationship are essential. Consider working with a strategic finance partner or using fund reporting and donor reports to demonstrate impact and build trust with corporate supporters.
3. Charity-Led Fundraising
This includes any fundraising activities directly managed and delivered by the charity, such as silent auctions, challenge events, charity balls, or fun runs. These initiatives help boost your charity’s profile and connect with new audiences.
However, charity-led events require careful planning, budgeting, and monitoring. Leveraging financial forecasting for charities, budget setting for charities, and management accounts for charities ensures your events are financially viable and well-controlled.
Fundraising Channels
Charities use a variety of channels to reach donors and raise funds. Each method has its own advantages and challenges:
Online Donations
Digital giving remains one of the most popular fundraising methods. It’s fast, secure, and scalable. You can set up a dedicated donations page and promote it through your website and social media channels.
Direct Mail
Though sometimes overlooked, direct mail still achieves strong response rates. It’s a great opportunity to share success stories and encourage support.
Cold Calling
Calling donors to say thank you or provide updates can improve retention. However, due to concerns about phone scams, this method must be approached carefully. Always consider privacy and compliance obligations.
Text-to-Give
Fast and mobile-friendly, this method works well for time-limited campaigns. Ensure that all income is recorded properly, possibly with help from a virtual finance office or virtual CFO services.
Email Marketing
A cost-effective way to personalize campaigns and promote events. Email remains a highly effective tool to raise awareness of your fundraising events and initiatives. Personalized campaigns can drive engagement and donations.
Governance and Financial Responsibilities
Charity trustees must ensure all fundraising activities are compliant with legal and ethical standards. That includes:
• Ensuring activities are appropriately planned and risk-assessed.
• Monitoring volunteer conduct and fundraising ethics.
• Maintaining oversight of finances and ensuring responsible use of resources.
Trustees must also stay informed about current guidance from the Charity Commission, particularly around accepting or refusing donations. This guidance impacts decisions about reputational risk and long-term sustainability.
For compliance and transparency, consider services like:
• Independent examination services
• Financial audit preparation
• Finance training for trustees
• Charity VAT advice
• Restricted funds management
Accounting for Fundraising Activities
No matter the scale of your event, all income should be properly recorded and reported. From cake sales to major gala events, accurate accounting is essential for compliance and long-term planning.
Working with Charity Accountants UK or a virtual CFO service can help ensure the following:
• All income is tracked and categorized correctly.
• Funds are allocated in line with donor restrictions.
• Reports are produced regularly for trustees and funders.
Services such as year-end accounts preparation, system implementation support, and process and control review help streamline your finance function and improve confidence in your financial reporting.
Final Thoughts
Fundraising is an essential tool to increase visibility, drive donations, and expand your impact. The best fundraising strategies are rooted in your charity’s values and shaped by your audience’s needs.
By combining creativity with sound financial management, your organization can run successful fundraising campaigns that truly make a difference.
