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How to Raise Money to Cover Startup Costs

How to Raise Money to Cover Startup Costs

Starting a new nonprofit is exciting! You have a chance to make a difference and change lives.

Paying for it can be nerve-wracking or even downright scary, especially if you haven’t done much fundraising before. There are registration fees to cover and if you hire someone to help with the paperwork, you’ll need money for that. Plus, you have an office to set up along with all the supplies you’ll need like maybe a laptop and printer. You definitely need money before you can do good work!

Introduction

Many people buy into the myth that as soon as you get your 501c3, funding suddenly appears or that you’re magically eligible for all kinds of donations. Unfortunately, it doesn’t work that way. There’s not a source of money waiting to rain down on your head just because you’re doing something worthwhile.

Clearly, many other nonprofit founders have figured out how to pay for the startup costs for their nonprofit and you can, too!

Start by figuring out exactly how much you need. Don’t post on Facebook “I need funds to start my nonprofit. Please give.” That’s too vague and there’s nothing inspirational about that to motivate someone to give. Instead, be specific about how much you need and why it’s important that your nonprofit be brought into the world. In short, be ready to share with potential donors how their donation will be used to make a difference and change lives… through your new nonprofit.

Now, once you have that specific amount you need, you can decide how you want to pay for it. You can self-fund, paying for it yourself, which works if you have the money. You can finance it by paying for it on a credit card, but going into debt isn’t a great way to start a new venture. Or you can put your fundraising hat on and raise the money the old-fashioned way – by asking.

Here are 3 ideas you can use to raise those much-needed funds to get your fledgling organization off the ground.

1. Do An "Easy Thousand"

This method leverages the power of relationships to bring in the money you need. Here’s how it works: Get 10 friends, family members, Board members, or volunteers (whoever will say “yes” to helping you). Ask them each to ask 10 people for $10 each. When that happens, you’ll have $1,000.

10 people x 10 people x $10 = $1,000.

You can change this to $15,625 by changing the numbers to 25 like this: get 25 people to ask 25 friends for $25 each.

This fundraising strategy can also give you a bunch of new donors, which is a GREAT way to start a nonprofit!

Be ready to explain to your 10 key people (or 25) why it’s important that your nonprofit be created. You might need to give them a flyer or at least some talking points so they know what to say about the good work your new nonprofit will do.

This peer-to-peer style of fundraising can work well because your 10 key people will reach out to folks they know, which is a much bigger pool of people than if you were doing this on your own. And their friends will give because of the strength of their relationship and the fact that it was their friend asking.

By the way, these donations can be given in person by cash or check or given online through something as simple as PayPal. Be sure to thank people promptly and sincerely. And once you get your 501c3, you can send them a tax receipt if they want it.

2. Hold A House Party

Ask friends, family, Board members, and volunteers to host a gathering of their friends at their homes. This is similar to the “Easy Thousand” except it’s in person and more casual. You’ll attend the gathering, too, to represent the nonprofit and share a very short presentation about your new organization followed by a testimonial from the evening’s host about why they’re involved and why the mission matters to them. Then, give the guests the chance to make a donation.

Hand them a pledge card or a donation envelope and make sure to get their names and addresses so you can properly thank them for their donation. Some guests may want to take theirs home to think about it, so be ready to partner with your host to follow up with those people later.

This method also helps you reach more people through the power of relationships and gain new supporters for your new organization.

3. Host A Launch Event

Gather friends, family, Board members, and volunteers together, along with their friends, to announce the launch of your new nonprofit. Provide a short program that explains what your nonprofit will do and how it will make a difference, then explain how much you need to get the new nonprofit up and running, including covering startup costs. Hand out pledge cards or donation envelopes and mingle among the guests to answer questions and thank people for attending.

If you have the right people there and do a good job at tugging heartstrings, you can raise a lot of money to get your new venture started. Think about it: if you fill a room with people who care about you and/or care about your cause, they’re the most likely ones to give to support the new venture.

If you can host your launch event at the place where your programs will happen or in a similar location, it will help people visualize the good work you’re about to do. And that will help spur donations. A launch for a therapeutic horseback riding program could be held in a barn. A launch for an afterschool program could be held on a playground. Or an Adult GED program could launch in a classroom.

Conclusion

There are literally thousands of fundraising ideas out there that you can use to raise money. But no matter who you ask or how you ask, fundraising success is about helping people see how their donation will change lives.

Remember, you’re not asking them to support you or even your new nonprofit. You’re asking them to help you save more animals or tutor more kids or provide service dogs to veterans. Ask them to partner with you to change lives. It’s a subtle but important distinction and often is the difference in the amount of money you raise.

About the Author: Sandy ReesSandy Rees

Sandy shows founders and leaders of small nonprofits how to fully fund their big vision so they can spend their time changing lives instead of worrying about money. She has helped dozens of small nonprofits go from “nickel-and-dime fundraising” to mastering donor-based fundraising, inspiring their donors to give often and give big. Learn how to raise the money you need to fund your new nonprofit without begging, doing without, or paying out of your own pocket.

Click here to learn more about Get Fully Funded.

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Sandy Rees is the founder of Get Fully Funded where she shows nonprofit founders how to fully fund their big vision so they can spend their time changing lives instead of worrying about money. She has helped hundreds of new nonprofits go from “nickel-and-dime fundraising” to adding 6 figures to their bottom line. As a trainer, she shows her students how to find ideal donors, connect through authentic messaging, and build relationships that stand the test of time, so that fundraising becomes easy and predictable. Grab her latest ebook “Fund Your Dream” at https://getfullyfunded.com/getstarted.

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