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Accounting & Finance

Innovative Tools To Generate Funding

business funding

One of the great oxymorons of life is that to make money, you must have money. As bizarre as it sounds, it really is true. Almost any venture – in business, in the nonprofit sector, or anywhere else-requires some amount of startup money to get things going and to set you on a path to generate ongoing revenue.

How do you overcome that initial hurdle? What steps can you take to get that infusion of cash to get things underway, or to expand your activities later on? The creativity that has generated lots of great ideas to use funding has also generated lots of great ways to generate funding. Here are some of the more common techniques.


One of the best ways to raise money for any group is to get a base of donors who feel like they belong to the organization. When that link is strong and that relationship is valid, episodic donors become lifelong supporters.

Many construction projects have successfully achieved this by tying donations to a physical element of the building. Probably the most common way this is done is by naming a building after a major donor. Another is to mount a plaque in the building to recognize large contributions. The downside of those is that they leave no room for smaller donors.

Smaller-scale commemorations like fundraising bricks are ideal. Many more donors can chip in, and they can maintain a relationship by visiting “their” brick. Every time they see their name set in masonry, they reinforce the bond between themselves and the group.

Going Public

When a business venture or nonprofit is too small to get mainstream attention, it can build its own campaign. Social media makes it easier than ever for them to frame up an idea, present it to a small network, and use the multiplicative power of friendships and acquaintances to spread a great idea to a huge base of people.

This has given rise to lots of different crowdfunding platforms, and many venture capitalists have begun using social media as a tool to identify potential investments. They like the privacy offered by anonymous examination of a project because it helps them step away quietly if the project isn’t to their liking. It also prevents other groups from creating a feeding frenzy when they see the investor funding the initial project.

Building Endowments

Most businesses and nonprofits think of fundraising as a way to generate funds for direct use on operations, an upcoming project, or development of something new. Typically, that is the best approach to take.

But universities and many charities have learned that endowments can be more effective. These require larger sums of money initially, but with a properly-designed plan for the endowment’s long-term use, it can be very appealing to potential donors. Many will prefer to contribute to something that will sustain itself for years or decades to come rather than constantly being solicited for new money each year. It can even spur them to give a large sum up front rather than having to provide annual contributions.

The most important thing with endowments is to have a logical and realistic plan for managing them so that the initial endowment is not consumed. Good financial advisors are essential.

The ability to generate funding to get projects started is essential to any business or nonprofit. Yet it can also be incredibly difficult. Building a fundraising campaign around the existing assets of the campaigner-its history for philanthropic achievement, its innovation in products, or even the people already associated with it-is a very effective tool for getting the money it takes to make money.