Fundraising in the public sector: a strategic leverage beyond the financial emergency

In the current landscape, characterised by increasingly limited public resources and growing social challenges, fundraising is emerging as a fundamental tool for Italian public bodies too. Traditionally associated with the Third Sector, fundraising is now considered to be a strategic opportunity for local authorities, schools, universities and healthcare companies. It represents not only a response to the chronic shortage of resources, but above all a paradigm shift in public administration management, enabling innovative collaboration models and approaches oriented towards project- and results-based evaluation.

This article briefly explores the potential of fundraising as a strategic lever for government, highlighting how it can go beyond the simple collecting of funding to become a catalyst for innovation, transparency and good governance. In order to be fully seized, this opportunity requires the development of specific managerial skills within government agencies.

Fundraising as a strategic and not just an emergency response

In public debate, fundraising is all too often invoked exclusively as an emergency solution to compensate for budget cuts or to cope with unexpected or excessive expenditure compared to forecasts. This reductive vision severely limits its transformative potential. Fundraising in the public sector must be rethought and incorporated as a structural component of a long-term development strategy, not as a mere temporary expedient.

Forward-thinking administrations have already understood that planning systematic fundraising activities means building an ecosystem of stable relationships with diverse stakeholders: banking foundations, local businesses, citizens, and third-sector organisations. This network of relationships represents a heritage that goes beyond the immediate economic value, constituting social and relational capital capable of activating virtuous processes of local development.

The Municipality of Milan, for example, through the “Crowdfunding Civico” initiative, has been able to integrate fundraising into its strategic planning, using it not only to raise additional resources, but to stimulate the active participation of citizens in the co-design of urban interventions. Similarly, some state universities have established fundraising offices which, far from acting only in response to budgetary emergencies, operate with multi-year plans integrated with the university’s institutional mission.

The difference between an emergency and a strategic approach is substantial: in the first case, funds are sought to plug immediate shortages; in the second, a system is built that generates shared value over the long term, aligning the needs of the public body with those of the target community and potential supporters.

Strategic leverage for innovative projects

Enabling advanced fundraising strategies is a very important lever for fuelling social innovation in policy-driven activities of general interest. This happens because the citizen through their own donation (understood as participation) becomes co-producer of a desired change and that “touches” them closely. The donation therefore becomes a stimulus to feed transformative action on three levels:

• the context, by responding to new, unmet needs and by strengthening community solutions. Much of the quality of life, in fact, lies in the production of goods and services activated by the contributory action of inhabitants;
• the subject. Giving is an act of trust which, when reciprocated, generates a more aware and active individual. The culture of giving in this sense has an educational value: those who participate (by donating) are linked to something that rewards them and activate a relationship that, as we know, is the basis of the Social Capital of a territory;
• the local development model. Donating means nurturing anew paradigm of shared administration, a paradigm that feeds from the bottom up, capable of generating initiatives that otherwise could not exist, making the subsidiary method concrete.

Starting from this hypothesis, one can intuit the value for public policies, especially those specific activities and entities that may not find their way into ordinary funding lines. This mechanism for earmarking resources allows public administrations to experiment with innovative solutions without compromising the essential services guaranteed by ordinary funds.

Well-structured fundraising campaigns can focus on pilot projects, experimental initiatives or interventions with high innovative potential that would be difficult to finance through traditional channels. This is particularly true for areas such as the digitalisation of services, educational innovation in public schools, or the implementation of new telemedicine solutions in healthcare companies.

The added value of this approach lies not only in the funds raised, but also in the ability to draw public attention to specific issues. A project supported through a fundraising campaign inevitably receives visibility that helps raise awareness in the community of certain issues or opportunities. Consider the campaigns of some state schools to create digital laboratories or innovative learning spaces, which have produced not only economic resources, but also a constructive debate on pedagogical innovation.

In this sense, fundraising becomes a means of communication and involving citizens, creating a virtuous circle between fundraising, the raising of awareness and active participation. The example of the University of Bologna, which has developed targeted campaigns to support research projects in emerging areas such as environmental sustainability and ethical artificial intelligence, shows how fundraising can become a lever for affirming the strategic positioning of a public institution on cutting-edge issues (https://www.unibo.it/it/ateneo/organizzazione-e-sedi/amministrazione-generale/3211/5306/index.html)

Public-private collaboration

Fundraising is one of the most effective tools for promoting and structuring innovative forms of collaboration between the public and private sectors. By overcoming the traditional dichotomy between State and market, these partnerships can generate hybrid modes of producing public value, in which diverse resources, skills, and perspectives are integrated to meet complex needs.

The forms of this collaboration can be many: from technical sponsorships where private companies provide goods or services to support public projects, to more structured partnerships where risks and benefits are shared. A significant example is that of the “sponsorship contracts for the restoration of cultural heritage”, through which various municipal administrations have been able to recover monuments and historical sites thanks to the contribution of private companies, which in exchange have obtained returns in terms of visibility and reputation.

This also includes the Art Bonus, a tax measure introduced in Italy in 2014 that allows citizens and businesses to obtain a tax credit equivalent to 65% of the donations intended for the maintenance, protection and restoration of public cultural assets, as well as for the support of public cultural institutions and places and entertainment organisations. Since its inception, the Art Bonus has raised over €1,076,000,000, involving more than 47,000 patrons and benefitting around 2,800 institutions, with over 7,500 interventions published on the dedicated platform.

Forms of co-financing, where the public body uses its own resources as leverage to attract private investment, are also particularly promising. This is the case with matching funds, where the administration undertakes to supplement with its own resources funds raised from private individuals in predefined proportions, thereby multiplying the impact of the initial investment.

Beyond the economic dimension, these collaborations enable the transfer of skills and methodologies from the private sector to the public sector. For example, a healthcare company working on a telemedicine project alongside a corporate foundation can acquire not only economic resources, but also knowhow in terms of innovation management and evaluation of results.

Experiences such as those of hospitals that have built strategic partnerships with local businesses for the financing of infrastructure and services of general interest, demonstrate that public-private collaboration can go beyond simple economic transaction, generating ecosystems of innovation and inclusion for the entire community.

Transparency and accountability

In a context where trust in public institutions is constantly being put to the test, fundraising can paradoxically become a powerful tool for transparency and accountability. When a public body engages in fundraising activities, it voluntarily exposes itself to a level of scrutiny beyond that provided for by ordinary public expenditure control mechanisms. Donors, whether citizens, businesses or foundations, generally require detailed information on the use of donated resources, encouraging the institution to develop more effective and accessible reporting systems. This dynamic favours the adoption of results-oriented management practices and impact assessment, with positive effects that can extend across the whole organisation.

Particularly relevant is the potential of fundraising as a catalyst for innovative social accountability practices. Civic crowdfunding campaigns, for example, commit the administration to continuously reporting the progress of projects to the citizen-donors, creating a direct link between economic contribution and visible results. This “bottom-up” approach to transparency can effectively complement traditional “top-down” institutional control mechanisms.

The experience of some Italian municipalities that have adopted digital platforms for real-time monitoring of projects financed by fundraising shows how these practices can help rebuild the trust pact between citizens and institutions. In these cases, reporting is not perceived as a bureaucratic obligation, but as an opportunity for dialogue and community involvement.

Transparency in fundraising activities is not limited to the use of funds, but must characterise the whole process, from prioritising to selecting partners, ensuring that the choices of the administration are guided by public interest and not by particular logics.

The managerial skills needed for effective fundraising

The effective implementation of fundraising strategies in the public sector requires the development of specific managerial skills within administrations. It is not simply a question of “learning to ask for funds”, but of acquiring a complex set of capabilities ranging from strategic planning to managing relationships with stakeholders. Fundraising thus becomes an indispensable tool for next-generation policies that are realised not only through redistribution but above all with “contribution.” Social justice and the common good require the contribution and collaboration of citizens. In this sense, it is clear how necessary a capacity building action is that re-orients the mindset, strategies and tools of public institutions.

Strategic planning

The ability to integrate fundraising into the strategic planning of the institution is fundamental. This means knowing how to identify the priorities on which to focus fundraising efforts, aligning them with the institutional mission and the needs of the community of reference. The public manager must be able to develop a long-term vision that goes beyond immediate contingencies, identifying areas of intervention that can attract the interest of potential advocates.

Economic and financial analysis

Economic and financial analysis skills are essential for assessing the sustainability of initiatives and for building effective mixed financing models. The public manager must be able to analyse the costs and benefits of the various fundraising options, evaluate the economic viability of projects and prepare financial plans that integrate public and private resources in an optimal way.

Project management

Fundraising  initiatives take the form of specific projects that must be managed using appropriate methodologies. This requires project management skills adapted to the public context, with a particular focus on time, resource and risk management. The ability to coordinate cross-disciplinary teams and manage complex stakeholder networks is particularly relevant in this area.

Impact assessment

Measuring and evaluating results is a crucial area of expertise for legitimising fundraising activities and building trust with donors. The public manager must master impact assessment methodologies that demonstrate the value generated by interventions, not only in economic terms, but also in social, environmental and cultural terms. Tying project objectives to the social impact produced (by measuring it) highlights the need for  increasingly hybrid public managers, that is, those capable of interpolating and orchestrating public and private resources, internal and external skills, in an environment where the digital dimension is indistinguishable from the physical one.

The evolution of these skills requires specific investment in training and professional development. Some pioneering administrations have already started dedicated training courses, often in collaboration with universities and specialised research centres. The inclusion of fundraising modules in training programmes for public managers is a positive sign of cultural change that deserves to be further strengthened.

A few final considerations

Fundraising in the public sector is much more than a temporary solution to the scarcity of resources: it is a paradigm shift in the very conception of public service, which is becoming increasingly co-produced through the interaction between institutions, citizens and private actors. The experiences analysed demonstrate that, when properly integrated into the institution's strategy, fundraising can generate public value in excess of the economic resources directly collected.

To realise this potential, it is necessary to invest in the development of specific skills within administrations and to promote an organisational culture which is open to innovation and collaboration. Public managers are called upon to rethink their role, moving beyond the traditional function of public-resource managers to become orchestrators of complex ecosystems in which different resources – public, private, and civic – integrate in the service of the common good.

The future of public fundraising in Italy will depend on the system’s ability to evolve from pioneering and fragmented experiences towards a more systemic and strategic approach, supported by an appropriate regulatory framework and institutional recognition of the value of these practices. The challenge is open and represents an unmissable opportunity to renew the relationship between institutions and communities.

In this context, POLIMI Graduate School of Management offers the “Fundraising for the public sector" course, designed in collaboration with The Fundraising School, for professionals who wish to acquire strategic and operational skills in fundraising, harnessing the potential of artificial intelligence to optimise fundraising strategies and processes.