The aim of nonprofits is to make a positive impact on society. To do so, nonprofits need funds. Without these funds, they will not be able to achieve their goals. Nonprofits have numerous ways to acquire funds. For those organizations that are in their nascent stages or have been struggling to acquire funds, worry not. There are numerous ways to organize and acquire funds, we have taken the liberty of listing out some of the most popular channels to get funds for your nonprofit.
The 10 most important funding sources for nonprofits
While we have listed 10 funding sources below, note that the listing is not definitive or indicative of the strength of each channel. How each nonprofit succeeds and utilizes certain channels is their discretion. Some organizations may find success in multiple channels, some may stick to a single one. Here are some of the most important sources of funding for nonprofits:
Perhaps the first target of any nonprofit, grants are the bread and butter of funding. Each year thousands of grants are given and nonprofits have greatly benefited from this charitable gesture. However, grants are very hard to receive. Applying for a grant is a very tedious and time-consuming process. Nonprofits have to do a lot of research and submit proposals. Despite the effort, the chances of their grant proposal getting rejected are far higher than it getting accepted.
While it may seem like a very narrow avenue, grant foundations remain the biggest channel for funds. The time nonprofits spend on applying for grants only helps improve their proposal and eventually, they will succeed.
The easiest way to get funds is through donations, and cash donations in particular. These donations can come directly from individuals or through corporate organizations. A lot of funds are often gathered in this manner, and it is almost always that the interested individuals step up and pitch in. They can often be the saving grace for organizations that are in dire need of funds.
A very popular way to gather funds, fundraising campaigns can be done through a variety of ways. Social media campaigns, community drives, a booth, and partnerships are just some of the ways. Yet none of these are as effective as hosting events. The sale of tickets, tables, plates, and other items often goes directly to the nonprofit.
While their importance has reduced in recent times, this is still a very effective way to attract the elites of society and ask them for contributions.
The power of the internet is one of the game-changers in the world of altruism. Websites such as GoFundMe have gained immense popularity where people can contribute to causes from around the globe. There are platforms where you can raise your voice and bring much-needed attention to your cause. This method costs little to no money to nonprofits but can often bring in tremendous amounts of profits.
We have already discussed the merits of donations, however, they are inconsistent. A better alternative would be contributions. These can come through organizations that partner up with nonprofit organizations. Contributions come in the form of large amounts given out by the board members of the partnering organization.
Whatever little fund a nonprofit has can be easily turned into more. Investment is seen as an effective way to increase your funding without relying on outside support. For established nonprofits this is one of the best ways to keep money flowing in, for the more recently formed ones, this cannot be a reliable source just yet.
This is a process where a grant foundation only agrees to approve the funds if the nonprofit can gather funds on its own. This is a good way to ensure that there is enough funding to sustain long-term projects. This process might seem very counterproductive, it often helps foundations stay afloat for longer and gives them the confidence to raise more funds.
Corporate matching programs
This is a neglected practice that yields great results. When an employee of a company donates to a nonprofit, they can submit the paperwork for the donation to their human resources department. When they run through the paperwork and if they find that it is proper, companies can match or donate even more to a nonprofit. You must inform every individual of this process as most of them remain unaware.
Program service revenue
To put it in easier terms, program service revenue is a fundraising event where the sales of the tickets go directly to the nonprofit. One can attract donors through advertisements, when they learn it is for a cause, they are more inclined to attend. When done correctly it can yield fantastic results.
These are similar to donations, except the commodity that nonprofits get is not cash. The donations come in the form of clothing, food, furniture, etc. This is a good way to gather resources and makes it easy for nonprofits to function, however, this is not a great way to sustain themselves.
All of these methods can be very beneficial when done correctly. You must find the right funding source that suits your organization and its goals.