Different platforms provide different aesthetics, user experiences, and probably most importantly, linkages to different fiscal sponsors. Scroll to page three of this document to learn more about platforms and sponsors.

Ask everybody within your network to reach out to people in their networks to tell them about the great work that you are doing. This is a life update that friends and family will care about. The idea is to continue passing the message on to others. If people can give, great. If they can like, or share, that helps too. Also share the message with those in your networks doing the fundraising to not to be ashamed to directly ask for money. Recipients of the conversation can then make the informed choice to or not to donate. Connect with existing resource guides and newsletters to include in their directories and blasts.

Get in touch however you can. Call media outlets, use Instagram and social media outlets, show up at physical locations if you know where you might be able to find people, and again, do not be afraid to make the ask: educate them about what you are doing and tell them what contributions you need. You miss 100% of shots that you don’t take 🙂

Look for connections to people/groups outside of your communities and take advantage of those connections. Make as many connections as possible and ask if you can be included on distributions of those who have a wider distribution network than your own.

Brainstorm widely who might be interested in your community and, if possible, find any connection to those individuals and reach out through those connections. If there isn’t a personal connection, just find their contact info however you can (ideally personal email address, but direct messaging or tagging on Instagram could work too) and carefully introduce yourself. Briefly explain what you are doing and share a link to your fundraising site. Ask them for a conversation and during that conversation tell them more about it. Ask them for a specific amount of money (determined by your group’s needs). They may not give the full amount, but at least you’ve started a negotiation. 

This process may feel awkward, but if these people are wealthy, they are quite used to it, and may even expect it. Keep in mind that you are not hounding them for money, you are simply educating them on how best to apply their charitable giving, which they likely have already set aside. They will appreciate being made aware of this great opportunity to help out and your being there to directly answer any of their questions and make them feel involved. 

If you get a large amount from somebody, you may also invite them to visit or virtually join a meeting to learn more about what you do. This kind of step will help them get emotionally invested and be more likely to support you again.

If you can, set up your online or physical site to collect people’s contact info (specifically email addresses), particularly when they give. If you have a fiscal sponsor, the donor will automatically be sent a form acknowledgement and tax receipt. It is a best practice to then personally follow up with all of your donors later on to ask them to give again. One easy way of doing this is to once monthly write an update email to send to everyone that has donated letting them know what you’ve accomplished so far, what you still need to do, and how much more you need to raise to get it done. People will appreciate knowing what they have contributed to, and some will be inspired to give again.

Subscription-based or recurring donation models can be quite effective for nonprofits in the long run (from months to years) since they provide a mechanism for donors to give more cumulatively than they might have otherwise. It can also be beneficial for the receiving organization by enabling them to better plan their future cash flow. For project-based Mutual Aid groups, the long-term gains are less relevant. It may be preferable to instead simply fundraise any possible funds from any donor up-front. Afterwards, if possible, follow-up with them in the subsequent months for second and third donations.

If you have a fiscal sponsor, you likely will not have a limit to the amount of money that you can raise. It will be good to check with your sponsor to be certain. Although it is highly unlikely, if we do raise all that you need, it is ethical to stop fundraising at that time.
If you do not have a fiscal sponsor, this becomes more complicated. For example, if you were to keep everything on Venmo, your weekly spending limit would be $6,999.99. There will also be a tax liability if you raise more than $20,000 in total. Refer to What do we need to know about tax liability? for more on this.

Understand the mission of the organization that is your fiscal sponsor. This is a partnership between two organizations. Legally, because you live as a project under the fiscal sponsor, your mission has to be able to fit under their organizational mission.  If your mission is not aligned with theirs, the fiscal sponsorship will be unlikely to happen. 

For example, an economic justice project is not going to be able to be fiscally sponsored by an arts organization if the mission of the arts organization is to promote the arts and artists in NYC, and your work is focused on getting groceries to elderly people (who are not artists). However, a mutual aid effort for artists may qualify under the umbrella for fiscal sponsorship for that same arts organization.

A fiscal sponsor is more than just a passthrough for your money, they also are often a signifier of where your priorities are as a group. You might not be completely aligned with groups under a fiscal sponsor’s umbrella, but the fiscal sponsor’s goals and philosophy might still be aligned with yours. Understand what your limitations are and what is a dealbreaker. This can be an issue especially if you are being fiscally sponsored through a religious non-profit that may itself have limitations of who they will support based on their own philosophies and beliefs. 

For example, if you are doing work explicitly for LGBTIA+ communities, you will probably not want to be fiscally sponsored by an organization that has other fiscally sponsored projects under their umbrella with homophobic/transphobic histories.

At this time, City resources are directed primarily toward individuals, businesses, and nonprofits. Opportunities for unincorporated neighborhood groups to secure City funding appears limited. One option that may be helpful to your group is the Mayor’s Office of Criminal Justice Safe in the City Grant Program, which was recently expanded to address COVID-19. It may also be helpful to get in touch with your local community board to request information on whether it is allocating resources toward COVID-19 response efforts.

We recommend fundraising through a fiscal sponsor. This means that you do not need to incorporate a 501(c)(3) or obtain an EIN and the sponsor will lend their tax deductibility status and liability coverage.

Fiscal sponsorship is an arrangement in which a legally incorporated nonprofit agrees to accept and manage funds for another entity, such as an individual or informal group. It occurs when a group or an individual wishes to receive tax-exempt contributions for charitable or community-focused activities without building a full organizational infrastructure.

Selecting a fiscal sponsor will likely be linked to what platform you choose to fundraise on since many offer their own fiscal sponsorship. For our purposes, it is a best practice to select a partner who can offer both. Otherwise you will likely choose an online platform and a third party sponsor (please refer to Appendix 1: Common Fiscal Sponsors to learn about a few that other groups use)

1. How soon can my project be sponsored? Normally it takes a few days to get approved and set up.

2. What are the fees and the fee structure? These may include some combination of:

a) donation processing and/or credit card fees

b) fiscal sponsorship fee 

c) any flat rates

3. Is our project eligible? Are there any restrictions on what money can be raised or spent on?

4. How easy is it to disperse funds and how long does it take? 

5. What are the additional services offered? These include preferred user experience, fundraising tips, customer support, etc.

6. What kind of fees are there and how do these function?

Most fiscal sponsors will take some administrative fee, normally between 5%-10% of total fundraising. Refer to Appendix 1: Common Fiscal Sponsors to learn more.

Most sites will include a donation processing fee associated with credit card donations. Normally, this is around 3%. When donating online, supporters are given the option to add the processing fee on top of the donation, which will help with this. You can also build the +3% into your project budget, so that you fundraise for it.

What is allowed for cash donations will vary between platforms. If a supporter wants to give in cash, a project leader who is comfortable doing so can collect that cash and then use their personal card to give the same amount to the project.

This practice will not raise any red flags with the IRS as long as the cash income is less than $15,000.

If you have a fiscal sponsor, you will not need a bank account to accept donations.

If you chose not to use a fiscal sponsor and would like to open a bank account, it is recommended to create an account for your group rather than under an individual’s name. If you do this, be aware that you will either need to incorporate as a 501(c)(3) or your total funding must stay under $20,000 to avoid tax implications.

While we cannot suggest one type of institution over another, we can share that some people feel that credit unions are a superior choice to banks. Credit unions are not-for-profit organizations that exist to serve their members. Like banks, credit unions accept deposits, make loans and provide a wide array of other financial services. But as member-owned and cooperative institutions, credit unions provide a safe place to save and borrow at reasonable rates. Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates and lower loan rates. Amalgamated Credit Union is a popular choice. 

Whether you choose a bank or a credit union, you will need to file the required paperwork with the state to form a nonprofit corporation or nonprofit association and obtain a federal Tax Identification Number in order to open an account for your group. You can open a bank account and start doing business before applying to the IRS grants for a tax exemption, but you won’t receive all of the benefits associated with tax-exemption until you get your IRS approval.

This depends on the fiscal sponsor you select.

There are a number of ways to electronically transfer money to your volunteers from your fundraising account. If you have a fiscal sponsor, check to see if they can manage this process for you. If not, you might consider the use of a cash transfer app. While they can provide fast and convenient ways to send money, each comes with its own set of limitations, charges, and other considerations. A helpful comparison of a few popular options — Zelle, Venmo, Cash App, PayPal, and Google Pay, Apple Pay Cash, and social media money transfers — is here. You may opt to employ multiple choices depending on your needs and the needs of the recipient. 

In addition, you may want to consider whether the app is unavailable to volunteers who need to be reimbursed due to reasons such as technological access/capability, access to financial institutions, the app’s policies as to who can use it, which is available in the platform’s terms of service.

Regardless of what your method is for transferring payments, it is always important to implement accounting practices such as tracking expenses and retaining receipts.

Depending on which platform you use, the money will either be dispersed once you have completely closed the fundraiser, or at set intervals during the fundraising process. Dispersal usually comes through an ACH transfer to a bank account (usually between within 24hrs or once weekly depending on your sponsor), or reloadable debit cards.

It is always best practice to keep accurate records of how funds are used. How you track funds will depend on what method you use for distributing funds. If this is a task that is required, it may make sense to choose a fiscal sponsor that can provide this service.

It is best practice to track where funds went and what they were spent on, especially as the dollar amounts get higher. Be aware that transfers of large amounts may be subject to tax regulations. Partnering with an organization that offers fiscal sponsorship before receiving and distributing large funds may be worth considering to decrease risk.

Please take caution when considering large fund transfers as these may be subject to tax regulations that a fiscal sponsorship relationship can assist with and provide guidance on. It is always best practice to track cash flow, maintain accurate records, and reach out for guidance sooner rather than later.

There are many ways to do this. The quickest and easiest way is to connect those wanting to give directly with those in need with no intermediary. However, when considering larger scale transfers and/or ongoing projects, you may want to consider fiscal sponsorship or even 501(c)(3) status. Many crowdsourcing sites will have restrictions on how they will disperse funds and fund-transfer apps often have their own weekly, monthly or upper limit restrictions on the number or amount of transactions an account can make. This may make working entirely on these platforms tricky, but not impossible. Try to find this information out before and consider if there are other options to achieve your objectives.

There are many avenues to take here. It may be worth considering an online campaign which is heavily promoted to a particular demographic either in a particular geographic or affinity community. There are many crowdfunding sites that focus on giving in this way. It also may be worth considering fiscal sponsorship or even 501(c)(3) status. Crowdsourcing sites will have restrictions on how they will disperse funds.

There are a number of free and relatively low-priced technological tools that your team can use to facilitate communication and manage the flow of information and resources. Slack, for example, is a popular free tool used to communicate with volunteer bases, and has several channels that can be used to facilitate communication between multiple teams. Google Sheets is a free tool that groups use to track various types of information in real time in sharable spreadsheets. For helpful examples of how one group has structured their volunteer base and employed technology to manage and respond to requests from their community, please see this slideshow describing Bed Stuy Strong’s procedures and systems. This is provided as an example and not as an endorsement of their processes.

Unless you seek it out, you likely will not have liability insurance. This means that, for instance, if a volunteer slips and falls while working on a project activity, the group leaders could legally be liable. You may check with your fiscal sponsor for provision or linkages to liability insurance.

If you have a fiscal sponsor, they will manage the tax liability for you, so you do not have to. If you do not, expect to have a file a 1099-k if you raise more than $20,000. Most advice explains that you will need to count the fundraising as “other income” and then on another line, report an offset reduction for the same amount. You should consult a tax professional to be sure.

If you have a fiscal sponsor or are incorporated as a 501c3 they will, otherwise they will not.
It might also be worth noting that the CARES Act has affected tax-deductibility. Just for 2020, individuals can deduct charitable gifts cumulatively totalling up to $300 from their gross income. This means that even if donors don’t qualify for itemized deductions for charitable donations, they can still simply subtract up to $300 from their reported income, and they will not be taxed on that money. To learn more: https://afpglobal.org/news/cares-act-charitable-giving-incentives

• Webinar recordings
  • Ioby Crowdfunding in unusual times: Adjusting your fundraising plans
  • NFG: The Importance of Digital Donor Communication During a Crisis
  • Ioby Webinar: Crowdfunding for communities
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  • NFG: Virtual Fundraising Toolkit
• Other resources
  • Financial Assistance and Grants to Nonprofits