Very often biggest issue for nonprofits is how to raise enough money to do the work they want.

Fundraising is an absolute necessity for almost everyone, and understanding the reality of where the funds come from is essential to smart planning. 

These 4 categories are the largest sources of nonprofit funding: but they are not the only possibilities.

It is only smart to invest your fundraising energies into the areas that represent the best chances to generate the funds you seek.

 

First, Hands Down:  Individual Donors

The stark reality is that the vast vast majority of nonprofit funding comes from individual donors. That vast majority is right around 72-74%.

What does this mean to your planning?

It means you need to put your energies for fundraising primarily in this area.  Pay attention to the things you do that increases interest and engagement with the people that support you now. Chasing the big corporate donation, the big government grant, the big gift from a celebrity is not going to be the best use of your energy,. Be sure your development planning includes a strong drive for private donors. 

What this means to you:

This is the first, best place to put your energies in starting your development plans. The effort you put in here has the best chance of showing results, sooner rather than later.

  • hold multiple annual friends raisers,
  • continually build networks, mailing lists, associations
  • expand online and mobile communications, and
  • invest in tracking, reporting, and donor management systems.

Second: Foundations

This sector generate up to 14% of overall giving.  

There are both private and public foundations that can be a regular source of funds. The typical types of foundations include:

  1. Family Foundations – Foundations that receive endowments from families. e.g – Gates Foundation,  Rockefeller Foundation, the Ford Foundation.

  2. Corporate Foundations – Foundations that receive endowments from corporate entities. There is a newer trend where corporate foundations are moving back under the for profit umbrella and becoming more directly linked to advancing corporate goals and corporate social responsibility.

 

  1. Community Foundations – Community Foundations are typically associated with a specific geographic area and pool the donations of several donors who don’t want to set up their own private foundations. This can be from the city, e.g. The Boston Foundation, the United Way

 

Tip: A good starting place  www.foundation center.org. to search for organizations that might be a match for your cause.    Grants.gov provides up-to-date information and a directory of federal grants.

What this means to you:

  • Significant amounts of time must be put into research- identifying the funders whose interests and goals parallel your work, those that are open to new proposals, what their calendar is for applying for funds.
  • Then there is the detailed work of the application itself. All of this time and effort is well worth if should you receive the funds, however, they are never guaranteed; so the time and effort may not pay off.
  • Some funders want to see you come back if you have been turned down previously. So it may be a good idea to keep this running in the background while you seek more immediate income.

Third: Bequests

This sector contributes about 8% of giving.

A bequest is a planned donation, these are gifts also known as planned giving and, left in the name of a nonprofit as part of a will.

These donations tend to be larger and therefore the time and effort to establish the connection and commitment starts well before the individual’s end of life. Every now and then a nonprofit will receive a nice bequest they had not been aware of, which is a nice surprise. Offering your donors this potential option is smarter. 

What this means to you:

  • This kind of planning requires planning on your part first. Identifying potential donors in the category requires knowing your donor pool well. Who may have this capacity to give?
  • What do you need to do to cultivate this kind of giving? Who will initiate the conversation and manage this relationship?
  • Obviously the investment in nurturing gifts as a legacy will take some time and not necessarily a predictable,amount of time before they are realized. However, the payoff can ultimately  be tremendous, so it is prudent to be aware of who in your donor pool maybe a candidate for this kind of giving program.

 

Fourth: Corporate giving

For all the hoopla about working with corporations, this group only represents about 5% of total donations.

There are 3 main forms of corporate giving:

  1. Philanthropic – no strings attached donation similar to individual giving.

  2. Event sponsorship – episodic or short term support typically event based.
  3. Cause marketing – longer term thematic engagement Remember to work with your park or program manager on the donor review requirements for corporate donors.

 

What this means to you:

  • Again, more research into what kinds of funds they may offer, what kinds of organizations have they and do they want to work with, what is their schedule for considering donations?
  • These decisions often take some time and involve a number of different people or committees, which means there can be quite a long lead time before any request can be considered, or granted.
  • In business, things can change quickly and without warning. If there is a problem or crisis, your funds may be held back. Have a Plan B. 

 

The Bottom Line:

Fundraising is tough, but it is the thing that makes your nonprofit able to deliver your mission. Fundraising is change-making. But fundraising is not for the passive- to be successful it requires thought, planning, hard work and lots of time doing the work. 

Working smart makes working hard that much more satisfying. Pick your targets thoughtfully, assign your efforts and energies where they are going to make the biggest impact. It is important to keep the variety of revenue streams in mind as you create your development plans, prioritizing the areas where you have the best chance of a strong return. 

Need some help figuring out where to start? Call, love to help.   310 828 6979