What's the difference between funding and fundraising and why is it important to have both in your charity fundraising 

Funding versus Fundraising?

A friend often helps me with inspiration for my writing, usually with opening lines. The latest being “The oxford dictionary defines funding as …” Initially, I didn’t feel particularly inspired by this (eep, etymology anyone?) but it did beg the question – What is the difference between funding and fundraising?

So, I got to looking up the Oxford dictionary (Oxford Dictionaries Online, for more modern language use) and found that funding is defined as:

Money provided, especially by an organization or government, for a particular purpose.

and fundraising as;

(n) The seeking of financial support for a charity, cause, or other enterprise

(a) Seeking to generate financial support for a charity, cause, or other enterprise

I decided to include the adjective here because it helps us determine an important distinction between funding and fundraising.

A quick google search didn’t conjure up much about this topic, but my own thoughts are these:

Funding, while it is something we seek after, it is generally for a specific purpose. When you seek that funding, you are asking a trust, a foundation, or government to support a particular service that you provide to the public or to a group of people. You can only use it for that purpose, nothing else and you will report back to that funding provider about exactly how you spent the funds. You need receipts and to report on outcomes/outputs to measure ‘success’ of your project or programme.

Sometimes, depending on the funder, you may be able to get general funds to cover the ongoing costs of running your organisation or achieving the purpose of the organisation. This is rare, but still requires a level of reporting that fundraising does not.

While there is a lot of work involved in getting funding it is in fact, money provided in the sense that your funder has money set aside to invest in programmes in their community or areas of interest. Many funders in New Zealand have a statutory obligation to ‘donate’ monies, for example gaming and licencing trusts.

When we’re fundraising (the REALLY fun bit), we are helping people support our causes. We are seeking to generate financial support. While the oxford dictionary defines it as financial support, fundraisers (the people) are really about the people and the support they are able to give to their charity or cause. This might mean financial support, it might be a product or service given free of charge (in-kind donations), volunteering (can save on overheads), generally just getting behind the cause and spreading the word.

We, as fundraisers, really are out there seeking opportunities to engage people with our cause. I like to think more that we’re providing opportunities rather than seeking though.

Unlike funding, which is highly tagged, support or money raised through fundraising is usually untagged and in most cases can be used for whatever purpose the organisation is trying to achieve. Sometimes, fundraising efforts are tagged for a particular event or service, if perhaps requested by your supporter or if you have a particular campaign that is supporting a specific project/event like natural disaster relief programmes or scholarship funds for students to attend your programme.

This aside, fundraising is an important aspect of any organisation whereby we can grow our services through increased untagged funding and increase our support through generating opportunities for people to give and understand that which we are trying to achieve.

So, funding is tagged monies for a specific purpose, project or programme and your fundraising is untagged funds to help you achieve the overall operations of your organisation be it salaries, or increasing service delivery or paying for your office space. Or as I like to say, fundraising is your dreaming space!

How much of your organisations income is tagged vs untagged?


Ta'ase Vaoga is a Consultant with Foresee focusing on implementation of fundraising programmes for our clients as well as providing strategic advice and mentoring to support charities build sustainable fundraising programmes.
You can contact Ta'ase by email here.

Funding versus Fundraising

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