Blog For Noob Random thought of a Noob Blogger
This blog is going to discuss the difference between investors and non-profit donors. It will go over what the difference between the two is and where you will commonly see examples of both. Let’s start with the definitions:
- Donor – A donor is an individual or an organization who typically provides low-level (and often sporadic) financial support that is not always directly linked to the mission of the individual, business or non-profit organization.
- Investor – An investor is usually looking for some kind of return on the money that they invest into an individual or business and as such, you are usually unlikely to see an investor put money into a non-profit, thanks to the very nature of it being not for profit. An investor will usually make much larger financial commitments that span over several years as opposed to the sporadic nature of a lot of donors. An investor is also, generally, much more concerned with the long-term success of an organization as opposed to the short term performance.
What Do Donors Put Money Into?
Donors have the freedom to put money into almost anything they want. They are able to donate to businesses thanks to platforms such as Crowdfunder. Not to mention, they often donate to political campaigns that align with their interests. This is encouraged through campaigners’ use of Democrat text donations, for example. This approach was initially picked up by the Democrats, specifically Barack Obama when he was first elected and now it is used frequently in political campaigns by candidates of all stripes.
What Do Investors Put Money Into?
Investors are usually much pickier with what they put money into, firstly, because of the fact they are usually parting ways with a lot more of it. Where donors will likely give $10, $20 or $50 on sporadic occasions, the amount investors give can wrack up to over six figures. Of course, no one parts ways with that much money without expecting something in return, which is another reason why investors are much more picky about to whom they give money. They will want to ponder over a business’s books and get an idea of how successful it is, what its profit margin is, where its investment is going and how that investment will lead to further profit in the future.
Conclusion
A lot of businesses, individuals and non-profits require external funding in order to really get off of the ground. The most common form that this comes in is usually investment, which is what people are used to; however, this is changing as donations are now becoming much more popular. The difference is that donations are often done with small amounts, sporadically and without the expectation of any kind of return on investment. Investors will usually put a lot of money into different organizations and as such will delve deeper into a business’s finances to get a good idea for the potential return on investment.
