Grassroots Fundraising vs. Top-Down Philanthropy: Which Works Better?  

Most people love to give, especially when it benefits others and not just ourselves. But sometimes, we get confused by which is more ethical, sustainable, or somehow “better.” 

Grassroots fundraising, sometimes known as “bottom-up” philanthropy, is when a nonprofit solicits donations from the general public, often through direct mail and email solicitations. 

Top-down donating refers to soliciting large donations from wealthy individuals and foundations. The goals of these two methods are very different, but there is an ongoing debate about which method is more effective. 

If you are a nonprofit organization, you might have heard about top-down and grassroots fundraising, but what does this mean for your organization, and why does it matter? 

The New Age of Fundraising 

Grassroots fundraising is a vital source of support for many nonprofits. The growth of social media has made it easier than ever to fundraise directly from potential donors. The many nonprofit crowdfunding sites that have emerged over the last few years help individuals support their favorite causes. 

Younger generations are particularly interested in actively supporting worthy causes, and research suggests that millennials are more likely to participate in grassroots fundraising than older generations. 

Millennials are often the first source of funding for grassroots organizations. This generation has a sense of identity and community, so they have a natural drive to fund local causes that they care about. They also have the time and resources to help out and are familiar with technology. 

Millennial women, in particular, are more likely to donate to societal causes than older generations. According to the New Face of Wealth and Legacy Report, most millennial women note that they have a personal responsibility to use wealth to benefit societal causes as part of their legacy. This tops the responsibility of financially providing for future generations. 

That’s where crowdfunding comes in. 

Many successful campaigns use social media to spread the word about the cause and reach out to potential donors. Sometimes these donors meet their goals without any face-to-face interaction; sometimes, they use social media and crowdfunding platforms to find like-minded individuals who will donate or help them raise funds in some other way. 

Research shows that millennials prefer this method of donating because it’s more interactive, personal, and less confrontational. 

Grassroots Fundraising: The New Face of Philanthropy 

Grassroots fundraising and crowdsourcing are not new concepts, but the ways people and communities apply these concepts are getting more advanced. 

A few years ago, crowdfunding was limited to raising funds for projects in the arts, like organizations using GoFundMe to help support a community orchestra. Today, crowdfunding on platforms like Indiegogo has been used for all sorts of projects — from start-up companies looking for financial support to individuals trying to raise funds for medical expenses or new businesses. 

There’s also a big push toward nonprofits using crowdfunding. GoFundMe states that in 2017, 68% of donations were under $50, and 84% of donations came from households with an annual income under $120,000. 

Examining the benefits of grassroots fundraising can help you decide whether this type of charitable giving is the way to go for your nonprofit organization. 

You will be able to reach out to everyday citizens and make them feel as though they are making a real difference in their community. Grassroots fundraising can be done year-round, and there are no limits on how much money you can raise through door-to-door visits, mailings, telephone calls, and even social media. 

The main benefit of grassroots fundraising is that it helps people feel more control over where their money goes. It’s a way to break down the distance between donor and recipient. 

Additionally, it’s easier to start small and build momentum than to ask for a large donation right out of the gate. 

Grassroots fundraising creates a sense of ownership within a community, an important part of onboarding long-term donors. 

Top-Down Philanthropy: A Traditional Approach 

Top-down philanthropy is what you most likely think of when you think of major donors. 

It is when a wealthy individual gives large sums of money to a nonprofit organization. This form of philanthropy can come from individuals or corporations. 

The top-down system is commonly used by larger and better-known charities that already have a presence in the mainstream public eye. These organizations may receive some funding from grassroots campaigns, but most of their donations come from large corporations and foundations that already know about their organization. 

The individual may have personal ties to the organization or cause supported. Through top-down philanthropy, wealthy individuals can fund programs and organizations that they have strong feelings about. They may focus their giving on arts, education, healthcare, poverty, or religion. 

It can be difficult for nonprofit organizations to raise money from this form of philanthropy because it may take a long time to gain the trust and respect of wealthy individuals or corporations. 

Many times this type of giving comes with stipulations as to how the money should be spent or who should be supported by it. This puts limitations on the nonprofit’s access to funds and can delay executing the organization’s mission on time. 

Why Telling Your Story Matters 

Whether your organization chooses to focus on grassroots fundraising or top-down philanthropy, storytelling has long been proven to drive increased donation rates over the past several years. 

In grassroots fundraising, authentic storytelling is even more vital for spurring donations amongst younger generations. As this group is bombarded with information all day long, it is necessary to stand out from the crowd to attract them. 

The most successful grassroots campaigns use storytelling to make their case. 

The process of telling a story has long been recognized as one of the best ways to connect with an audience and elicit an emotional response.  The same rules apply when telling stories to raise funds as they do with other types of stories.  

A well-developed story will touch upon a common experience or emotion and help create empathy between the teller and listener.  This foundation is important for any good storyteller, whether trying to share a personal experience or motivate others to support their cause. 

Conclusion 

A common misunderstanding is that charity begins with the wealthy. In fact, much of the world’s charitable giving originates from grassroots efforts and individual donors—not Bill Gates or Mark Zuckerberg’s foundations. 

Grassroots fundraising can be a way to describe an organization that has a grassroots approach to its efforts. This method of seeking donations is appealing because it is community-based and hands-on. It relies on communication and collaboration with local supporters. 

It is also very effective in helping volunteers feel connected to the cause they support. Grassroots fundraising is a collaborative effort between the nonprofit and its supporters. 

This type of solicitation often draws in more people because of its grassroots approach, making people feel like they have a say in their community’s future. It also helps build trust among donors who want to support the community and know exactly how their money is spent.