I’ve been heavily involved in the nonprofit sector since 1994 and today I am more certain than ever that third-party fundraising is an essential component of a nonprofit’s development portfolio.
Third party fundraising refers to any fundraising activity that is executed by someone who is not working for the fundraising organization. It can take many forms, fundraising by:
- The board
- Key supporters who voluntarily run events and fundraisers
- Participants in events who are taking pledges
The list goes on but the key component of this fundraising is that it is administered on behalf of the nonprofit by a volunteer.
For the nonprofit, there is a significant opportunity benefit that comes with this type of fundraising. A fairly efficient fundraising department in a nonprofit spends less than 35 cents to raise a dollar. What isn’t factored into typical expense ratios is the opportunity cost. Staff resources lost in other areas should also be factored in. The enormous advantage of this fundraising is that it doesn’t drain internal resources.
Incorporating third-party fundraising into a nonprofit’s existing events and having a stand-alone 3rd party program will boost revenues, reduce a nonprofit’s fundraising expense ratio, and improve other aspects of an organizations capital campaign by freeing up development resources.