Reference
Investments and fundraising.
Understanding investment and fundraising is part of building greater control of our own economy. Learn about personal investing, business funding, public offerings, and nonprofit fundraising—and the risks and responsibilities that come with each.
Donation and reward campaigns generally involve gifts or products, not ownership or a promised financial return. Securities offerings follow different rules, with required disclosures and real risk of loss. Nothing here promises returns.
01
Investing for long-term ownership
Investing can help build assets, but it puts money at risk. Start with household stability and understand what you own before chasing a return.
Key concepts
- Savings and investments
- Savings for bills and emergencies serve a different purpose from investments that can lose value. Consider when you will need the money and whether you could absorb a loss.
- Stocks, bonds, and funds
- A stock is an ownership interest in a company; a bond is a debt obligation. Mutual funds and exchange-traded funds can hold many investments, but not every fund is diversified or low-risk.
- Diversification, fees, and risk
- Spreading investments can reduce concentration risk, not eliminate losses. Compare fees, liquidity, and the underlying holdings. Local ownership and supporting Black enterprise matter, but community ties do not replace financial due diligence.
Checklist
- Write down a goal and time horizon without submitting your financial information here.
- Read the investment’s documents, costs, and withdrawal or resale restrictions.
- Independently verify the provider and its registration where required. Reject promises of guaranteed high returns.
Related resources
02
Funding a business
Choose funding that fits the business’s cash flow, purpose, and ownership goals. A larger amount is not automatically a better deal.
Key concepts
- Self-funding and loans
- Self-funding uses your own resources and puts them at risk. Loans create repayment obligations; compare interest, fees, collateral, and any personal guarantee before signing.
- Equity and control
- An investor may receive an ownership stake and negotiated rights. Understand valuation, voting rights, profit sharing, and how future financing could reduce your percentage of ownership.
- Grants and crowdfunding
- Grants have specific eligibility and permitted uses, not a blanket promise of free startup money. Donation or reward campaigns are different from selling securities. Securities crowdfunding has legal requirements, including registered intermediaries under Regulation Crowdfunding.
Checklist
- Prepare a business plan, a realistic budget, and a clear use of funds.
- Compare repayment, ownership, fees, and reporting duties for each funding path.
- Before promising investors returns or advertising a securities offering, consult qualified securities counsel.
Related resources
03
Public offerings
Public offerings can connect a business with public investors. They are regulated capital-raising transactions—not ordinary donation campaigns or an easy shortcut to funding.
Key concepts
- IPOs and follow-on offerings
- An initial public offering, or IPO, generally means a company first sells shares to the public. A company may raise more capital in a later follow-on offering. Public fundraising can affect ownership, control, disclosure duties, and costs.
- Registration and Regulation A
- Securities must be registered or offered under an applicable exemption. A registered IPO typically includes a registration statement and prospectus. Regulation A is a different route for eligible companies, with an offering circular and tier-specific requirements; it does not automatically mean shares will trade on an exchange.
- What investors should examine
- Read the latest offering documents, financial statements, risk factors, use of proceeds, and ownership rights. Understand dilution, possible loss, and resale restrictions. Buying shares from an existing shareholder does not necessarily provide new money to the company.
- Review is not approval
- SEC registration effectiveness or qualification does not endorse a security or guarantee a return. An IPO allocation is not assured, and a listing does not eliminate volatility or business risk.
Checklist
- For a business: review the appropriate route, current federal and state rules, accounting needs, costs, and ongoing duties with qualified counsel.
- For an investor: read the current prospectus or offering circular and independently verify the issuer and intermediary.
- Do not treat an advertisement, community connection, or regulator filing as a guarantee of a sound investment.
Related resources
04
Nonprofit and community fundraising
Black-led and community-serving nonprofits need dependable support for their work. A fundraising plan should explain the need, the budget, and how the organization will account for contributions.
Key concepts
- Donations, sponsorships, and grants
- These support a mission rather than purchasing an investment return. Define what support is needed, any restrictions on its use, and any benefits promised to sponsors. A grant’s eligibility and reporting rules must fit the organization.
- Trust and stewardship
- Describe the program honestly, keep records, thank supporters, and share useful updates on how funds are used. Treat donors respectfully; urgency is not a reason to hide costs or pressure people.
- Status and fundraising requirements
- Nonprofit status does not automatically make contributions tax-deductible. Verify current tax status and applicable solicitation, reporting, and receipt requirements before making claims. Seek qualified legal and tax guidance.
Checklist
- Set a specific program goal, budget, campaign timetable, and reporting plan.
- Check grant eligibility and the organization’s tax status before soliciting support or claiming deductions.
- Protect donor information and offer ways to help through time, skills, and needed supplies as well as money.
Related resources
Trusted resources
Each link opens a short summary here first, then the original source.
U.S. Securities and Exchange Commission / Investor.gov
Beginners’ Guide to Asset Allocation, Diversification, and Rebalancing
Official introductory explanations of investment risk, time horizons, diversification, and why spreading investments does not eliminate the possibility of losses.
- Investments can lose some or all of their value; diversification is not a guarantee against losses.
- This is general education, not a personalized portfolio recommendation or a promise of returns.
U.S. Small Business Administration
Planning and funding a business
Official guidance on business planning and comparing self-funding, investors, loans, and crowdfunding. The funding section sits within the SBA’s broader planning guide.
- Read the funding section and compare obligations, not just the amount available.
- A loan must be repaid; equity investment can change ownership and control. This is guidance, not a loan approval or grant award.
SEC · Investor.gov
Regulation Crowdfunding for investors
An investor bulletin explaining securities-based crowdfunding, registered intermediaries, disclosures, and the risks of early-stage investments.
- Regulation Crowdfunding is different from donation or reward campaigns.
- Read current rules at the source rather than relying on old investment limits. Early-stage businesses can fail, and resale may be difficult.
SEC · Investor.gov
Investing in an IPO
An investor bulletin on initial public offerings, registration statements, prospectuses, allocation of shares, and risks of a newly public company.
- The bulletin explains what to examine in a prospectus, including risk factors, use of proceeds, financial condition, and dilution.
- SEC review does not approve the investment’s merits or guarantee the accuracy of an issuer’s disclosures.
SEC · Investor.gov
Understanding Regulation A
A bulletin about an exemption allowing eligible companies to offer securities to the public, with offering circulars and requirements that differ by tier.
- A Regulation A offering is not the same as a registered IPO and does not automatically create an exchange listing.
- SEC qualification is not an endorsement. Read current federal and applicable state requirements with qualified securities counsel.
Grants.gov
Federal grant eligibility
Understand which organizations may apply for federal grants and why each notice of funding opportunity has its own eligibility requirements.
- Nonprofit, business, and individual eligibility depends on the specific opportunity; appearing in a general applicant category does not establish eligibility.
- Grants.gov does not provide personal financial assistance. Check deadlines, application instructions, permitted uses, and reporting obligations.
Internal Revenue Service
Charities, nonprofit status, and contributions
Official information about tax-exempt organizations, annual filings, charitable contributions, and the IRS organization search.
- Nonprofit formation is not automatically federal tax exemption, and a payment to a nonprofit is not automatically deductible.
- Use the IRS organization search and current contribution guidance. Federal tax guidance does not replace applicable state fundraising requirements.
Candid · Melissa Wetzel, CFRE
Building strong donor relationships
A nonprofit fundraising article about consistent communication, donor trust, thoughtful stewardship, and long-term support.
- This overview summarizes themes of the article; it does not reproduce the original text or promise fundraising results.
- The article is a reading resource, not a grant application. Other Candid products may have separate access or pricing terms.
Prepare before you raise or invest
Raising money, especially by selling ownership, is regulated. Get your household and business records in order first, and consult a qualified securities attorney and accountant before making any offer or investment. Nothing on this page replaces that advice.