No Budget, No Problem: Engaging the Community Through Third-Party Fundraising

We’re wrapping up our conference season and Learning Series with Lynn Adams, assistant director of donor relations at the Community College of Aurora Foundation. In her AFP session, Lynn warns us of five major roadblocks to be aware of when working with third parties, as well as some of the crucial benefits, including expanding your reach.

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While major organizations can host multiple events annually, smaller organizations generally only have the budget for one. But, here’s the thing – the local community wants to support the local organization. There’s an economic impact when a community gives where they live, and it can be a very powerful thing. Community support can come in a variety of forms, whether it individual donors or larger-scale, third-party fundraising.

What exactly is third-party fundraising?

It’s a fundraising effort hosted by an outside party to raise money on behalf of a non-profit organization. Third-party fundraising allows an organization to raise money without investing in yet another event.

The goal of third-party fundraising, as with most fundraising efforts, is to create less overhead for the organization, prevent overworked staff, and increase community engagement.

What can third-party fundraising do for you?

The benefits of partnering with an outside agency can be fruitful.

  • Nonprofits can broaden their reach geographically.
  • The creativity and possibilities of what these partnerships look like is limited only by your imagination.
  • It’s an opportunity to introduce your mission to a new audience, who doesn’t already know about your organization.
  • Your organization will build strong relationships with local businesses and the community (and remember how much local supports local?).

Think of it as gateway philanthropy. Third-party fundraising opens the door to new audiences, a new flow of funds, and new relationships. The key is to find a business that is in line with your organization’s mission, values and philanthropic focus. Otherwise, your message may land on deaf ears.

Where do you find the perfect match?

You may already have the perfect partner in your existing donor base. Is there a donor with whom you’ve wanted to strengthen your relationship? Is there a consistent donor, who has a strong social or business network you would like to engage? Alternatively, check in with your volunteers to see if any one of them has a connection worth exploring. Oftentimes, you needn’t look very far to find your perfect third-party match.

A good partner will be able to guarantee an agreed-upon fundraising profit, a multi-year relationship, and a speaking opportunity for your organization.

How to spot a red flag

Okay, so you’re starting conversations with a few interested parties, but you’re just not sure if they’re the right partner. If they cannot commit to a specific budget, don’t communicate, and don’t provide your organization an opportunity to speak, there’s a good chance the partnership will go south quickly.

If they talk in broad terms about fundraising, aren’t transparent about the proceeds your organization will get, or their philanthropy is really a disguised for-profit event, there’s a high chance their motives are less than altruistic. Keep your eye on the prize: less overhead, fewer overworked staff, and increased community engagement.

Navigating the third-party relationship

As you’re creating this new relationship with your third-party organization, keep an eye out for the following:

  1. Opportunity cost
  2. Diluting your message
  3. Giving up control
  4. ROI: overburdening your staff with little return
  5. Stewardship is not possible 99% of the time

It doesn’t hurt to create a third-party policy to include:

  1. Annual goal
  2. Prospect list
  3. What you must know to approve the event
  4. What you WILL and WILL NOT do
  5. Clarify any tax requirements

There is always an opportunity for third-party fundraising when working with a small budget. Local businesses are happy to partner with non-profit organizations and show their support to the community. Just be sure it’s a good match for your organization, and you know you’re getting all you can from the relationship.

“Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”
– Margaret Mead

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Lynn Adams is the assistant director of donor relations for the Community College of Aurora Foundation. Prior to joining CCA Foundation, Adams was a development associate for the Crisis Center in Castle Rock, CO, where she was responsible for community outreach, building donor relationships and facilitating third-party events.

Adams’ primary focus is centered around developing, leading, and driving CCA Foundation’s fundraising and donor appreciation/cultivation events. She also shares responsibility for providing vision and strategic direction for the foundation’s donor stewardship and engagement efforts.

In addition to more than 15 years of event-planning experience, Adams teaches a monthly workshop on event planning and fundraising at Colorado Free University.