International Fundraising: Getting Started in the Big World of Global Giving
Let’s begin with some quick math.
According to a study by Charities Aid Foundation, 68 percent of Americans donated money in 2014. The U.S. population that year was roughly 319 million, which means about 217 million Americans donated. Atlas of Giving found that those 217 million Americans gave a total of $456.73 billion that year.
Clearly, the U.S. is a giving powerhouse. But it’s not even the most giving.
Eight countries, including Ireland, Canada, the Netherlands and the United Kingdom, rank ahead of it in percentage of population that donate money. Myanmar, of all places, ranked first with an astounding 91 percent donating in 2014. Malta is second; Thailand is third. All told, 1.4 billion people worldwide donated money in 2014—more than six times the amount of Americans who donated.
This is not a knock on U.S. giving. It’s a reminder that the donor pool is much larger than many charities realize. International donors are a viable and underserved fundraising market—a vast pool of untapped resources. How do you tap into it? For answers, we asked a pair of international-fundraising experts.
NonProfit PRO: We’d venture to guess that an organization proficient in fundraising in its home country isn’t guaranteed success in international efforts, correct? How does development on the international level differ from its domestic counterpart?
Murali: Successful fundraising is marked by certain similarities regardless of the geographic market. A nonprofit has to offer an impactful solution to a challenge investors care about and, ideally, make giving simple and engaging. The differences between domestic and international fundraising lie in these two offerings. Some causes resonate with investors in foreign markets more than others. Legal and financial regulations vary by market, which alters the processes of registering as a charity, accepting funds and providing tax benefits. Also, cultural nuances are important to acknowledge, as certain donor communities may prefer gift solicitations and acknowledgements in specific ways.
Harper: On the institutional side of fund development, there have been fewer grantmakers with international interests. But this seems to be changing as borders become increasingly meaningless in terms of disease, conflict, human trafficking and other “stateless” issues whose implications/ramifications are on the rise. One seeking funding needs to ensure his or her organization’s geographic focus and programmatic plans align with the grantmaker’s funding priorities. (This holds true with domestic grantmakers, as well.) Monitoring and evaluation—a key component of successful grant funding—can be more complicated for international programs lacking strong local partners who do not understand program metrics.
On the individual side, making what happens abroad matter to donors in the U.S. can be challenging. The U.S. remains one of the most generous countries in the world in terms of philanthropy, and donors are increasingly sophisticated in their giving. When an organization can connect the programmatic dots and show how real change can occur and be sustained—usually through powerful individual stories that link to the greater picture—donors understand how their contributions make a difference. Because people give “through” and not “to,” donors wish to know their own philanthropic aspirations are being realized.
NonProfit PRO: Let’s say my organization wants to expand its development activities into overseas markets, to tap into that vast fundraising potential. What’s the first thing I should know?
Murali: It is always important to understand your organization’s fundraising strengths and who your core donors are, so that you are optimizing your foundational networks first. Growing from your roots with specific leads and activities that have a high probability of success is preferred, as that will always have a stronger return than starting an international fundraising program based on sheer faith in opportunities.
International fundraising can draw upon a lot of organizational resources, given the financial and legal preparation needed. Make sure you have advisors, volunteers and staff who are well versed in local regulations and can set you up to be compliant. Secondly, map out your base network through leadership, donor and staff connections. Be clear on where you can be most successful given your organizational network and the markets in which your particular mission will resonate. Finally, don’t go too broad geographically, too fast. Start with your core supporters and their networks, and see which international markets those networks take you to. Make sure you can lay out a clear, milestone-based plan for revenue return against any initial investments, so that you know what success looks like and can retract if the costs do not justify the return.
Harper: Understand the funding landscape. Don’t be afraid to ask questions. Donors appreciate frank inquiries, as no one likes to have their time wasted. Understand the political, policy, cultural and economic realities of your focus country. These are the hurdles that can undermine the best philanthropic intentions. Who are the gatekeepers? Who wields the authority? What is the historic context for your programmatic issue area?
NonProfit PRO: You’ve mentioned a few already, but what are some of the inherent challenges to international fundraising?
Murali: The main challenge in building an international fundraising program is determining resource allocation toward fundraising in different markets. The impact of the resource-allocation decision can be more critical for smaller organizations, as moving into a new market may take a significant initial investment and an uncomfortable lead-time to see financial return. You need to make sure the core organization can sustain that investment and the associated lower fundraising efficiency for a period of time.
Also, while donors everywhere are motivated by similar things—alignment with mission, social responsibility, transparency and impact, public leadership—the practicality of implementing and sustaining an international fundraising program can be very different in each market, depending on the compliance requirements, the culture and the specific donor community you are working with (example, expatriate or local national). An informed revenue planning and tracking process ensures that your fundraisers have clearly articulated plans to operate against and are able to present projections for leadership to make decisions.
NonProfit PRO: What about legal challenges?
Murali: Certain markets, like the United Kingdom, have very sophisticated charity laws, so understanding those laws and how to operate effectively (and in compliance) is a prerequisite. Other markets also have their own nuances—for example, in Singapore, organizations need a permit to conduct fundraising activities when their programs are not implemented for communities in Singapore. In India, receiving funds from companies under the new corporate social responsibility law also carries specific reporting requirements. Knowing the requirements associated with receiving funds ahead of time will help alleviate strain on your organization and help determine if the revenue return for your programs justifies the cost of compliance.
NonProfit PRO: What kinds of organizations are involved in international fundraising? Is it typically limited to larger nonprofits, or are there opportunities for smaller organizations, as well?
Harper: Nonprofit organizations of all sizes seek funding for international programs. Larger organizations can wield more influence and impact, and smaller organizations can be more nimble and responsive on the ground. To some funders, smaller organizations are more entrepreneurial, creative, and willing to experiment or take a calculated risk in the name of advancing new solutions. To other funders, larger organizations are more proven as a fund beneficiary.