The “Save the Fringe” drive aims to raise £7.5 million over the next five years.
A series of new funding pots will be created to try to make the event more affordable to take part in and easier for performers, companies and venues to put on shows.
New initiatives are expected to be developed to reduce the environmental impact of the Fringe and help pay for the roll-out of “sustainable practices” across the festival.
It is hoped the campaign, which is aimed at sparking a "renaissance for the Fringe,” will help develop new audiences for the event in Edinburgh.
And a key aim is to secure a new home for the Fringe Society in the city centre to provide a permanent new space to bring festival workers, arts organisations, performers and community groups together throughout the year.
Edinburgh-based artists, venues, producers and promoters will be urged to contribute ideas for how money raised should be spent.
The Fringe Society, which oversees the event, running its website and box office, has launched the campaign in the final week of a scaled-down return for the festival this year.
This year’s programme features around 1,024 in-person and online shows staged across 146 venues, compared to 3,841 shows in 323 venues.
Venues involved this year have only been able to put on a fraction of their normal number of shows due to uncertainty over what Covid restrictions would still be in place in Edinburgh this month. They were not lifted until three days after the Fringe had begun.
Chief executive Shona McCarthy insisted this month’s comeback should not be seen as a sign the event had “returned to health,” pointing out that emergency grants had been needed to ensure the Fringe went ahead.
The Fringe Society’s campaign has been instigated after its research found the cancellation of last year’s event in the face of Covid-19 cost venues upwards of £21m in lost revenue.
It is being kick-started with £150,000 that has been raised from the proceeds of sales of a limited edition Edinburgh Gin bottle designed by Fleabag star Phoebe Waller-Bridge, who was appointed the Fringe Society's first honorary president earlier this year, and a further £160,000 raised from other supporters of the event in the wake of last year’s cancellation.
Ms McCarthy said she hoped some of the best-known performers to emerge from the Fringe would support the fundraising campaign.
She said: “There has been such an amazing alumni that has come through the event and had their careers launched by being part of this festival. We will also be looking to other donors, supporters and friends of the Fringe. A lot of people just adore the festival.”
The launch of the campaign has coincided with the start of work on a wide-ranging consultation with Edinburgh-based artists, venues, producers, local businesses and residents on what the Fringe of the future should look like.
“There can be many barriers to participation in the Fringe,” Ms McCarthy said.
"It can often come down to the sheer cost.
"Artists coming to the Fringe are usually unfunded. Most people are taking the risk themselves.
“There are all kinds of different choices across the Fringe landscape which have different levels of risk. We want to provide support in a meaningful way.
"We will be working with all our partners to set out how the funding for artists, venues and companies will be distributed, which will be tied into a new manifesto for the Fringe.”
Ms McCarthy insisted that a full recovery of the Fringe, which reached a record audience of more than three million for the first time in 2019, was not about “going back to how things were,” adding the next five years should be about “reimagining the Fringe "as the best version of itself".
Ms McCarthy said: “It’s been a really interesting moment for the Fringe this month.
"I don’t know anybody across the Fringe landscape who isn’t reflecting on what happened last year and this year.
"I’m excited about the coming months and being able to have calm, reasoned, positive conversations about what we learned from a scaled-back Fringe this year, what was better about it and what people missed about it.
"It's going to be really interesting to get a sense from artists, performers, venues and audiences about what an ideal Fringe looks like. Everybody will have a different view on that, but somewhere in the middle of it all there will be a pathway to follow.”
The Fringe Society, which is spread across several Old Town buildings and has to hire space from Edinburgh University every August, first revealed ambitions to find a permanent new home in 2018.
Ms McCarthy said: “We’re on the council's list for any potential buildings that come up, and we’re talking to the university and other stakeholders in the city to let it be known that we’re looking for a new home, but we don't have a specific one in mind at the moment.
"We would probably want it to be somewhere between George Street and George Square.
"We want it to be a home [away] from home for artists and participants, as well as a place for schools and community groups to come to throughout the year. We really want to do is offer all our support services on a much more year-round basis. It would be a drop-in, a hub and a safe space.
"We also want to have a space to tell the story of the history of the Fringe.”