While donations and grants are the first things that most people think of when discussing non-profit fundraising, there are multiple ways nonprofits can create revenue for their organizations. Each nonprofit’s individual context will dictate what methods are the most effective in helping them gain more funding, but this article will share five common ways nonprofits can generate income.

  1. Individual Donations. The first method is well known but is tried and true: individual donations. While the size of individual donations can vary greatly, the focus here is recurring individual donations. Individual donations make up the largest percentage of nonprofit revenue and cannot be emphasized enough. Find ways for people to give for the first time and allow this to grow the opportunities for them to give on a recurring basis.
  2. Grants. Grants are another really common type of funding for nonprofits. While getting money via a grant can feel time-consuming, there are multiple grant fund sources on the local, state, and federal level that your organization could qualify for. There are also private grants that could be of benefit for your nonprofit if your organization chooses to apply for this type of funding. There are all kinds of grants that are available for charities, and there are nuances that go into how to actually receive those grants. It is very important to understand that grants are just one type of income source that nonprofits get. You can get a lot of general advice on where to look for grants and the grants programs, and what you should be prepared to do in order to get them. There are many different kinds of grants that we can receive, but the details of each grant can be incredibly unique. Be sure to follow the parameters of the grant your organization is applying for very intentionally.
  3. Services and Products. Services and products have become an extremely viable form of funding for nonprofit organizations. Before diving into the benefits of services and products, it is important to note that nonprofits have to be especially careful about what they offer to make sure that it advances the mission of their organization. An important question to ask when looking to increase income through services and products is, “how does the selling of this product advance my mission?” If there are things and products or services in which the nonprofit organization is exceptionally strong or has access to, it could become a great soure of revenue. Now remember, the U.S. government does not even permit nonprofit organizations to produce 100% of their income from selling services or buying goods. This could cause them to become very expensive as a result. So if someone donates money to a charity, or if someone gives a grant to a charity, they will find out if some of the money is being used to support the organization.
  4. Sponsorships. A less common form of income for nonprofits is through sponsorships. Sponsorships are quite distinct from a monetary contribution because a sponsor may be expected to provide the kind of help that you need to achieve a mission. In exchange for supporting you, a company or a person can give you an award, a great product, or a great service. It may be an opportunity to get additional funding, or it may be to give people an exclusive opportunity to give to your organization. There are many things to consider when considering a sponsoring organization. There are many different types of gifts, and of course, a sponsoring organization is a very important thing to do. You can not use the amount that someone gives you as a gift that can be tax deductible, even if it is a small gift. This means that what each donor gives to your organization in return for helping it is less valuable than what the donor initially donated, and the difference between that and the donation amount is taxable.
  5. Fundraising Events. The fifth and last source of funding we will discuss is fundraising events. Fundraisers can be extremely beneficial for nonprofits on multiple levels. In addition to getting increased funding, it also helps as a marketing source for your organization. For example, it could be that the event attracts donors or you might be able to ask people to sponsor you. When putting on a fundraising event, be sure to create multiple opportunities for people to give. From first-time gifts to recurring donations, donors should have multiple ways to give. It could be simply by having people sell tickets or it could be that sponsors of the event are helping you to get money. It might be people who sponsor those events or it may be people who give money to the organizations to help them promote and run their programs. Major fundraising events can be complicated and cost a lot of money so it is important to know the fundraising goals. However, if done well, the payoff for these events can be extremely beneficial.

Fundraising and donor tracking can be difficult, but it doesn’t have to be. MyDonors can help you manage this information. MyDonors is part of MyCommunity, which exists to build relationships and tools that equip organizations so that they can maximize their impact. Our suite of tools is designed to help organizations of all sizes focus on their mission without worrying about the logistics. We understand the importance of building strong relationships, so we provide the necessary tools to maximize impact and make a difference like our easy-to-use platforms MyDonors and MyVolunteers. Likewise, MyNonprofitCoach equips nonprofits with the training they need to be successful. Schedule a demo for any of our solutions here.

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Source: https://www.youtube.com/watch?v=nlwl3-O2JX4