Fundraising is the process of soliciting and gathering money or other gifts in-kind, by requesting donations from individuals, businesses, charitable foundations, or governmental agencies. Although fundraising typically refers to efforts to gather funds for non-profit organizations, it is sometimes used to refer to the identification and solicitation of investors or other sources of capital for-profit enterprises.
Fundraising is a signficant way that non-profit organizations may obtain the money for their operations. These operations can involve a very broad array of concerns such as religious or philanthropic groups such as research organizations, public broadcasters, and political campaigns.
Some examples of charitable organizations include student scholarship merit awards for athletic or academic achievement, humanitarian concerns, disaster relief, human rights, research, and other social issues.
Many non-profit organizations take advantage of the services of professional fundraisers. These fundraisers may be paid for their services either through fees unrelated to the amounts of money to be raised, or by retaining a percentage of raised funds (percentage-based compensation). The latter approach is expressly forbidden under the Code of Ethics of the Association of Fundraising Professionals (AFP), a professional membership body.[1]
Many non-profit organizations nonetheless engage fundraisers who are paid a percentage of the funds they raise. In the United States, this ratio of funds retained to funds passed on to the non-profit is subject to reporting to a number of state's Attorneys General.[2] This ratio is highly variable and subject to change over time and place, and it is a point of contention between a segment of the general public and the non-profit organizations.