Most community groups will need to raise money to be able to provide their services and manage the day-to-day operations of their organisation. Fundraising is important work for community groups.
What is fundraising?
A fundraising activity (pdf, 1.74MB) can be a single event over a limited period of time or an ongoing activity. Generally, fundraising activities are those activities which meet the following requirements:
- you ask or target the public (ie. people outside your organisation)
- you ask for money or other benefits, such as goods or services (eg. food, clothes)
- the reason for you asking for the money or benefit is not solely for your profit or commercial benefit.
In general, if you or your organisation is asking for or receiving money or other benefits to use for not-for-profit purposes, you will be conducting fundraising activities.
Generally, an organisation that conducts a fundraising activity will need to register as a ‘fundraiser’ in Victoria, unless:
- the law says the activity is not fundraising, or
- your organisation is an exempt organisation.
Fundraising requirements are regulated in Victoria by Consumer Affairs Victoria (CAV).
Establish a fundraising strategy
The development of a fundraising strategy needs to be an annual exercise and should be evaluated and tweaked throughout the year as well. A fundraising strategy needs to have the flexibility to react to new opportunities or to curtail activities that are either not practical or not profitable. The best thing is to schedule some time for those interested in fundraising to get together and thrash around some ideas and establish some goals.
- Outline your goals. What do you hope to achieve?
- Research past fundraising activities – what has worked? And just as importantly, what hasn't?
- Work out who your friends and potential friends are and who is willing to support your organisation - businesses, government departments, individuals, families, philanthropic trusts and foundations.
- Conduct market research with members, friends, etc., collecting their good ideas and examples of what has worked in their groups to raise money.
- Detail a case to support each prospective fundraising activity.
- Describe and decide on the methods you plan to use to raise funds.
- Set an estimated target for each method.
- Set a timeline and a year planner noting good times for the organisation to raise funds. Pay attention to grant deadlines.
- Document your progress so that if you are struggling, the bells start ringing early enough to change tack.
- Establish an evaluation strategy.
Remember, if you are asking for money, it is easier to raise money for a specific project or activity than for the organisation as a whole. Most people would rather know exactly where their money is being spent.
There are virtually countless sources of funds that your community group might be able to tap into but all of these fall roughly under one of six headings:
Grants are a very important source of funds for most not-for-profits. Billions of dollars is provided each year by local, state and federal governments, as well as philanthropic, community and corporate trusts and foundations. The trick is knowing how to get your share. You need to know what your group wants to do, and you need to know who might provide the sort of grants that could fit those aims.
Smaller groups often think it's too hard or they're not worthy to get donations. That's not true - if you have supporters, then you can have donors.
A membership program (or, if you're a school, an alumni program) can provide a handy source of regular, predictable and renewable funds for your organisation. Friends-of schemes serve much the same purpose. Of course, membership schemes are first and foremost about fostering a sense of belonging among your supporters, but the fundraising potential is also important.
Special events are the lifeblood of many not-for-profit groups, though they can take a lot of time and energy to be truly profitable. Examples include:
- Sales, fetes
- Trivia nights, fashion parades, talent contests, art shows with a local retailer or gallery, dances and discos, Film nights, restaurant function
- Various 'athons, with club members and players gaining sponsorship for a walkathon, readathon, skipathon, workathon or skillathon
- Games' nights using casino-type games and 'play money'
- Sponsored record attempts or other similar quests
- Fun runs (carefully check legal requirements with local authorities)
Almost every not-for-profit organisation has a number of items or services it can exchange for much-needed revenue. Earned income refers to the money you make through selling what you know, what you do, what you have, or what you can sell.
Community business partnerships/sponsorships
Creating a successful community-business partnership brings benefits to both the business and the not-for-profit involved, and often for the wider community as well. Sponsorships are just one type of community-business partnership. Other models include volunteering, donations schemes (money, goods, services), pro-bono or discounted services and products, sharing/donation of premises/infrastructure, etc.
Fundraising and tax
Depending on your not-for-profit’s fundraising activities, there may be different tax treatments for GST and claiming tax deductions on contributions.
Another common source of funding for not-for-profits is through philanthropic or government grants. In general, 'grant' is usually used to describe a one-off provision of money, whereas funding describes a longer-term agreement. Organisations that give out grants or funding to community organisations (grant-makers) include:
- government bodies or statutory authorities (federal, state or local government)
- philanthropic or other grant-making organisations, and
- corporate bodies (that is, businesses).
What should we do before applying for grants or funding?
There are a number of checks your organisation needs to do make before applying for a grant or funding.
Organisation's internal requirements
Your organisation should check its constituent documents (constitution or rules) to see if they contain any requirements about 'funding sources'.
If there are clauses that prohibit your organisation from receiving funds from outside bodies (or it is not consistent with your organisation's objects or purposes to do so), your organisation will need to comply with its constitution or rules.
Alternatively your organisation will need to make a change to its constitution / rules before applying for grants or funding from external sources. For more information about making changes to constituent documents, see Not-for-profit Law's page on rules and constitutions.
Most philanthropic organisations and many government organisations will only give grants and funds to community organisations that are incorporated. Another example is that certain philanthropic organisations have a (legal) requirement that they can only give grants or funding to organisations that have deductible gift recipient (DGR) tax status. For more information on DGR go to Not-for-profit Law's page on DGR.
Grant amount and conditions
It is common for grants to have a series of conditions attached to them. When you receive grant money your organisation will be considered to be in a contract with the grant-maker. The grant conditions will be the terms of that contract and your organisation will be under a legal obligation to comply with them.
These conditions may involve things like:
- how your organisation is to receive and spend the grant money
- how often your organisation must report to the grant-making organisation
- what kind of information your organisation must provide to the grant-making organisation in its reports, and
- whether your organisation is required to prepare audited accounts (which can be costly, especially if these are not currently obtained by your organisation)
Read the conditions!
If there are any conditions that you do not understand, it is important that you seek advice. Taking this step might prevent problems in the future which may arise if the condition was misunderstood or misinterpreted.
Some government funding may have conditions like complying with a legal regime that your organisation would not normally need to comply with, for example Privacy Laws. This can have a huge impact on the way your organisation is run.
There are several reasons why your organisation may not want to agree to all the conditions without further negotiation, including:
- the conditions are inconsistent with your organisation's goals, purposes, values or objectives
- the conditions are too administratively onerous
- the conditions are too restrictive in terms of how you spend your money or the activities your organisation can undertake, and/or
- the obligations under the conditions continue too far into the future.
Moonee Valley City Council Grants
There are grants available through Moonee Valley City Council. It is important to source grants that align with your community group’s values and to remember that when you receive a grant you are legally contracted to deliver what you agreed to.
For further information, read through the Moonee Valley Community Funding Guidelines.
- Free assistance to community organisations to find, and apply for, relevant grant programs.
- Philanthropy Australia provides information about philanthropic giving and how not-for-profit organisations can seek philanthropic funding.
Department of Environment, Land, Water and Planning
- This site has all of the grants that are available from DPCD. Many of these are aimed at community organisations.
- The Funding Centre provide information on grants and fundraising in Australia.
- The Our Community group provides advice, connections, training and easy-to-use tech tools for people and organisations working to build stronger communities.
Consumer Affairs Victoria: Fundraising
- Information about regulations and liability relating to fundraising.