Written by Scott Jones, CFRE, BAS, CAI Fundraising Auctioneer

Every organization needs funding to thrive. You need resources to invest in your programs, your members, your staff, and your infrastructure – to ultimately achieve your greater mission. You likely have value that you can offer in various ways to obtain this support. So how do you know which is the right way to do this?

A donation is an altruistic gift, either with a general charitable purpose or for the support of a particular project.  A donation is a fantastic way of contributing to the causes that you really care about. Most nonprofit organizations need help with the boring things, like paying rent and staff, purchasing office supplies and covering the costs of their utilities. You can make a huge impact on the daily work of charities even with small donations. Better yet, you can choose to support a variety of nonprofits, even with little donations, and extend your reach in your community.

Fundraising is about providing social value. A donation is intended to create positive community change and the value gained is at more of a societal level. Although, for a corporation, being connected to a social cause can also be a source of positive affinity. 

Donations may come in the form of cash or in-kind gifts such as gift vouchers from a local retail store, food from a supermarket, office equipment from a small business, etc. It should be considered as a goodwill contribution, without the need for anything in exchange from the non-profit organization. Tax receipts can often be issued for donations, provided there are no benefits or advantages received by the donor.

For donors, they are interested in the number of people helped and the impact on communities and the world.  Donors giving through fundraising efforts want to help you serve your clients. With fundraising, it is the vision of the organization, the programs, and the stories of impact and outcomes that are the primary drivers.

There is less public fanfare around this type of giving. Donors are usually thanked privately, often with a personalized acknowledgment, and in a quiet way. While donations are not made for marketing purposes, a business can (and should) let their community know that they have recently donated to a charitable cause. It’s always great to share that warm and fuzzy feeling when you’ve done something charitable!

To understand motivations and goals, you must investigate through exploratory conversations, curious questions and research. You also want to ensure you understand and can articulate who your audience and clients are. It is important to understand what the motivations, passions and values of every donor are.  Once you understand what a donor is looking for, you are better able to propose what you can offer. Sometimes there is a fundraising opportunity, sometimes a sponsorship opportunity, and it could even be both. Whether you are seeking donors or sponsors, there should always be alignment. For donors, you want to find those that align with similar values and believe in what you are doing enough to invest in it.

Is a donation or a sponsorship right for you? Sometimes you can even do both fundraising and sponsorship with one organization, as it often comes from different budgets – you just have to know what they are looking for and where the decisions are being made.

If you can understand the main differences, and similarities, between sponsorship and fundraising, and how you can determine which one your potential partner might be looking for to achieve their goals, you are well on your way to building a strong pipeline of funds that will allow you to achieve your mission for years to come – while also helping to achieve the goals of others.

The main difference between a sponsorship and a donation is the notion of mutual benefit and promotional value for the sponsor. Sponsorship contributions should not be seen as fundraising dollars.  On the other hand, a donation is a simple way of giving back to important causes quickly and easily. You might even find that in different situations, both sponsorships and donations are right for you!