Documentary funding is often the biggest hurdle faced by documentary filmmakers.
Unless you're Michael Moore making millions in profits from your films, most documentaries make very little, if any, revenue.
Someone once quoted to me that the average documentary makes about $2,000 in DVD sales. I don't know if that's true, but based on personal experience, that figure certainly rings true.
If you consider that a one-hour documentary could easily cost $50,000 to $250,000 to make, you can quickly see that documentaries are typically not profit-generating products.
Fiscal Sponsorship
For this reason, it is often a good idea for the filmmaker to find a non-profit "fiscal sponsor" to handle all donations for the project. That way, you can offer those who want to support the project the opportunity to make a tax deductible donation. Also, handling and managing money can be a major pain, so having an established organization handle your money will not only give you peace of mind, but also instill confidence in the donor that their money is going through a reputable organization.
Typically, a fiscal sponsor will charge 5-10% of all donations as a management fee. If you prefer to handle all the donations yourself, you can consider starting your own non-profit organization for the project. The process is fairly straightforward, but it can take months to get approval and will cost you perhaps $1500 or so in set-up fees. If you think you will be doing multiple documentaries over many years, this is worth considering, but probably not for a one time doc.
A few organizations that offer Fiscal Sponsorships:
The International Documentary Association
Women Making Movies
The Center for Independent Documentary
Another idea for documentary funding is to find a non-profit organization that is connected in some way to your subject matter. For example, at one point I was considering a documentary series based around the Civil Rights Movement. I approached a Civil Rights organization in Atlanta and they agreed to be my sponsor. Basically, they are agreeing to accept money on your behalf and pass along the funding to you.
With this personal tie-in to the documentary, they may or may not require a fee since it is also in their interest to get the documentary made. Another benefit to going this route is that you'll face less competition from other documentary filmmakers also vying for sponsorships. The smaller the non-profit you approach, the better luck you'll have getting approval.
As a side note here. If your aim is get your film picked up by PBS, there are strick guidelines on where your funding comes from. For example, if your documentary is about the Red Cross, you cannot accept money from the Red Cross -- this gives the appearance of a propaganda piece.
Low Hanging Fruit
When you're ready to start fundraising, go first to the "low hanging fruit." That means go to people who know you and/or who are already "sold" on the idea of the documentary. Unless you have a direct connection, don't go to the Gates Foundation first. Choose people and groups you know are already committed and passionate about the subject.
Fundraising Trailer
Another KEY component to raising money for your documentary is to have a "video fundraising trailer". This is a short video that captures the essence of your documentary. There is no better way to raise money than by letting people experience a taste of your vision. This shows people you're serious about the project, it showcases your talents and abilities and builds confidence that your project is worth supporting. There is no better tool for documentary funding.
Here's a movie trailer for a project our team is currently working on about the life of Habitat for Humanity founder Millard Fuller.
Foundations
Foundations are a great way to gather documentary funding, although the research involved can be quite time consuming. I recommend visiting The Foundation Center and researching their vast database of funding sources. You're looking for foundations that give money in your particular field. It's a gold mine of information if you're willing to do the work.
If you're a filmmaker working with a fiscal sponsor or potential partner, the agreement can sometimes be complicated. Who owns the film if the funder is paying for it? How much control does the funder have in the making of the film?
An organization called Active Voice deals exactly with this issue.
For more information about active voice and the prenups concept: http://www.theprenups.org
Documentary Proposal and Budget Templates
Do you know how to pitch your documentary idea to investors, foundations and wealthy donors to get funding?
The Documentary Proposal and Budget Template Combo Pack includes a pre-formatted 25-page proposal template, proposal writing guide, two budget templates and a budgeting e-guide.