DONATIONS
In the 2nd part on this series of Resource Mobilisation, lets focus on Donations, second most (if not the first) popular form of income of NGOs. One can say donations are birth right of a non-profit and hence should be one of the mainstay for resource mobilisation. In a way, success in raising donations also indicates the popularity of the non-profit or acceptability of the causes that it espouses for. Donations can be raised in several ways.
Using persoanl influence: Any promoter of a non-profit would start raising resources from its area of influence, i.e. well-wishers, friends, relatives, and of course own funds, etc. However there would always be limitation in such kind of resource mobilisation, one, due to limitation of such contacts; second, same persons may not wish to contribute again and again. Hence a better way would be to try to make your friends a stakeholder in the work that you propose to do. If convinced, not only will they contribute with more zest, but also bring in more persons.
Raising Funds online: In today’s time raising of funds online has to be most efficient. This mode can be adopted in different ways. Non-profits can develop online site for raising of funds, on their websites, social media, through apps, etc. One could also consider posting its activities, e-journals regularly on social media. As the saying goes, if you are in their mind, people will remember you when they wish to donate.
Crowdfunding: Most recent example of crowdfunding is raising of Rs 77 lakh (as allowed by ECI) by Kanahyia Kumar as his election funds through Crowdsourcing.
There are several platforms in India, which allow you to raise resources through crowdfunding, such as https://www.ketto.org/, https://www.impactguru.com/. More can be found through google search. Crowdfunding is cost efficient. Infact you may not need to pay initially on some of the sites and pay only certain percentages when funds are collected. Several crowdfunding sites have large database / subscribers, thus enhancing the reach even for smaller non-profits. Crowdfunding is found to be effective only if your campaign has certain emotional appeal. Thus packaging of the campaign is quite important. Second you need to respond quickly to any queries that potential donors may have. Best way forward is to contact such crowd-funding sites, understand their terms. Also do contact others who may have raised funds using such sites and who can share their experience and help you avoid pitfalls.
SPONSORSHIPS
One of the flaw of donation, as a resource mobilisation, is that it focuses on raising funds from an individual only once. Sponsorship is the instrument which has built-in instrumentality of repeated donations. Traditionally sponsorship was undertaken for causes of children, where an NGO working on Child Rights, could offer a bouquet of sponsorships. For example, for health of a child, for education of a child, for complete growth of a child, etc. Generally a fix amount is offered. It is upto a non-profit to innovate and develop sponsorship instrument for other causes.
Sponsorship is both a challenge and an opportunity. A repeated donation indicates a satisfied donor, while a donor who does not repeat a donation could indicate ‘a failed opportunity’ to satisfy a donor. Developing Sponsorship program requires several strategies, developing & packaging the product, engagement & effective communication with the donors. Developing a sponsorship program which has impact on resources of the non-profit is not easy, it requires planning & perseverance. However once developed, such a program will help organisations become relatively free to undertake programs according to your own plans and do not have to depend on donors. Major advantage of sponsorships is that funds would not be slashed just because one donor decides to move away. Thus there is stability.
HelpAge, as stated by Mr Mathew Cherian, in his Memorial Lecture receives 60% funds from individuals. This is a huge achievement. There have been other organisations, who worked to develop their own sponsorship models, which helped them achieve stability in their programs. Deepalaya is one such example.
Late Mr Vijay Sardana, was one big advocate of sponsorship and he believed that sponsorship model must be integral to each non-profits resource mobilisation program. His initiatives helped SRRF to organise a Training Program for helping set-up a Sponsorship Unit within a non-profit. SRRF still believes in utility of such a program, and if there is sufficient demand could consider organising the same again.
Tax Aspects
Most non-profits would be registered under S.80G, thus providing tax benefit incentive to the donors of upto 50% of the amount donated. There are certain nationally recognized funds, which get 100% deductions, like PM Relief Fund, National Defence Fund, National Sports Fund, National Children’s Funds, etc.
Donations made to specified institutions undertaking scientific & statistical research and approved under (S.35(1)(ii)) (S.35(1)(iii)) respectively would attract 100% deduction under S.80GGA.
Please note, do not take cash donations above Rs 2,000/-, person giving such cash donations would be denied tax exemption. Tax authorities, could treat such donations as anonymous donations in the hand of non-profits and tax them, unless PAN or some other KYC identification can be provided.
FCRA Aspects
In case of online donations, please be careful, that you have sufficient details of donor. In case of foreign donors, donation should be accepted only in FCRA designated account. All donations rec’d in local accounts must be only from Indian citizens.
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Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008