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Alternative approaches to fundraising

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Alternative approaches to fundraising

Crowd funding

What is it?

Crowdfunding is the practice of funding a project or venture by raising contributions from a large number of people, typically via the internet.

How it works

  • Choose a site to host your Crowdfunding campaign.
  • Put your idea onto the crowdfunding website – usually a short video and some text.
  • Say how much you need to raise.
  • Tell people about it.
  • You can offer rewards for contributions
  • You will have 2-8 weeks for your campaign to raise money.
  • Once you reach your target the money is released (or returned to investors if you do not raise the required amount. - (You can choose to collect all donations but there are different charging levels and this can be more expensive).

 

Who does it?

There are a number of sites dedicated to charity crowdfunding, including:

Crowdfunder - http://www.crowdfunder.co.uk/

Justgiving - https://home.justgiving.com/

 

What does it cost?

Crowdfunder fees – no charge if unsuccessful. 5% fee plus VAT of total pledge plus charge for credit card donations
Just Giving fees – (regardless of whether you reach target),  5% fee on pledges and card charges of 1.3% or 16p per pledge.

Some important things to remember:

  • Crowdfunding is not a quick fix.  You cannot set up a page and wait for the money.  You need to take you campaign to the people who might fund you.  Put it on the front page of your website.  Link to it on Facebook page, use Twitter, etc.  Try to get your local media involved Take every opportunity to spread the word and get people talking about your project. Crowdfunding sites host your page but they do not engage in promoting it.
  • Check out the other projects on your chosen site. This will help identify the things which work and give you a feel for the type of projects that are using crowdfunding.
  • Create a compelling page – It has to stand out and attract the attention of potential donors.
  • Choose a site that people are visiting.  The more people looking at it, the more likely you are to attract donors.
  • Make sure you understand the fees.

 

Fundraising Websites

 

Unlike crowdfunding which seeks to raise a set amount in a finite time period, fundraising sites provide a platform for on-going campaigns and promotion of charities activities with the purpose of raising money over a longer period of time.

Features can include:

  • Sponsorship pages for individual fundraisers – Individuals are just as likely to want to fundraise as charities. The sites that offer individual giving allow people to set up their own fundraising drives for the charity of their choice (as long as that charity is registered on the site) and get their own pages to track their progress.
  • Mobile app – Some platforms offer a specific mobile app to make it easier for people to donate.
  • Mobile optimised site – Nowadays 37% of our internet browsing is done via mobiles and that number is increasing all the time. The sites with a mobile optimised site will appeal to a much larger audience, and therefore be likely to be able to gain a greater number of donations.
  • Text giving – Text giving opens up a new way for people to give. It’s a quicker and often more impulsive action, which can lead to more donations.
  • Automatically reclaims gift aid – Gift aid is an important part of any charitable donation, adding an extra 25% to its value with no added cost. Reclaiming this gift aid can be a hassle sometimes and can take time and money for the charity. As such, some platforms offer to take that hassle off charities hands and reclaim the gift aid for them.

Who does it

These are a number of sites available including:

Virgin MoneyGiving - http://uk.virginmoneygiving.com/giving/

Just giving - https://home.justgiving.com/

The Big Give - http://www.thebiggive.org.uk/

Bmycharity - http://www.bmycharity.com/

Givey - https://www.givey.com/

 

How much does it cost

Typically there will be:

  • set up fee, usually about £100 where it is charged, Just giving charge a monthly fee of £15
  • Commission – typically 3-5% per donation, although not all charge this
  • Card charges and VAT

Additional links and resources

For a comparison of key sites  go to http://www.moneysavingexpert.com/family/charity-fundraising-sites

alternatively this site compares 10 top UK sites and provides comparisons http://reasondigital.com/advice-and-training/ten-uk-charity-fundraising-websites-compared-2015/

 

 

Gift Aid

What is it?

Gift Aid allows UK charities to claim back the basic rate tax already paid on donations by the donor. This is worth 25p for every £1 donated, boosting the value of the donation by a quarter. To claim Gift Aid you must be a charity or a community amateur sports club (CASC)

How does it work?

Charity registers with HMRC and receives a registration number. Claims can be made direct or online

Donors simply declare that they are able to give gift aid on a declaration form. They must be UK Tax payer and donations can not be more than 4 times what they have paid in tax in that tax year.

The following donations are not eligible for Gift-Aid:

  • The donation is from non-UK taxpayers.
  • the donation is on behalf of someone else or a group of people
  • the donation is on behalf of a company
  • the donation is to a family member or friend doing an event where the charity is contributing to their costs
  • the donation is made in return for goods, rights or services.

Links

A good starting point is the Gov.UK site which outlines the rules and process for  claiming gift-aid 

https://www.gov.uk/claim-gift-aid/overview

The Parish Resources website, gift aid section also has detailed guidance aimed at Parochial Church Council’s (PCC’s) which covers all aspects of gift aid, from a step by step guide on how to register, all the way through to what gift aid can or cannot be claimed on. To access this site please click here.

Please note that some of this information will be PCC specific (especially when referring to the Small Donations Scheme, due to an HMRC ruling which should not affect other charities).

Gift Aid Made Simple is a detailed document from Sayer Vincent which goes through the full spectrum of gift aid. and can be found by clicking here

Envelope Systems also provides some guidance on gift aid, as well as links to their own software. Click here

 

Community Shares

Community shares give your community a chance to own shares in your organisation.  They do not produce dividends for shareholders, but shareholders may get interest payments and their investment might be repaid to them later if the enterprise is doing well.

Research shows that people often use their savings pots to invest in community shares, because it’s a long-term investment, not a donation. This means the average investment in community shares is around eight times higher than what people would normally donate

This type of share capital can only be issued by co-operative societies, community benefit societies and charitable community benefit societies.

These shares are used to serve community purpose and are used to raise funding for community shops, pubs, renewable energy initiatives food schemes etc.

How does it work?

If you want to offer shares as a way of raising money for a community benefit project you will need to:

  • Put together a proposal (known as a Share Offer document- this will contains all of the details of the offer, including the minimum and maximum amounts you can invest.
  • Register as a co-operative society, community benefit society or charitable community benefit society. This allows you to issue Community Shares to help raise the money you need.
  • Promote share offer and make shares available.  Note community shares are not traded on the stock market they are bought directly from the society.
  • You may use a fund raising web site to promote your offer although there are fees attached to this.

Things to remember

This is a social investment and not a financial investment. If the society makes a profit, it may pay you interest on your shares, but the amount of interest a society can pay is restricted. Shares can be bought back at cost.

Resources and links

Further information including an excellent handbook on community shares can be found here

http://communityshares.org.uk/