Nonprofits can feel that worrying about funding is against their mission; why talk about funding when should focus on service delivery? Funding is tied to service delivery, and that means it’s something worth caring about. There are different sources of funding available to you and it’s important to consider utilizing multiple funding streams for your nonprofit funding models. Taking advantage of a range of funding options together means that not only can you provide more services, if you were to lose one form of funding, your organization has options and can continue to operate.
Grants are a common funding source for organizations, and oftentimes, the biggest part of nonprofit funding models. Funding through grants offers a sum of money that is awarded after the application process, and it involves money that does not need to be paid back.
Government-awarded grants are the most common type in the nonprofit sector, but there are also options for awards by private organizations. . Oftentimes, nonprofits can qualify for small business grants, which can be awarded from foundations or by the government. And increasingly often, major companies are setting up a philanthropy fund and offering privately-awarded grants for nonprofits. You can learn more about some of these grants of all types in our grant round up, or learn about writing grants and how to stand out during the grant process in this recent blog post.
Another common type of revenue stream to fund your service delivery is donations. They can involve campaign drives such as mailings, emails, fundraising events, or setting up donation stations outside of local businesses. Partnering with local businesses to run small events where customers can round to the nearest dollar and donate the change of their purchase can also be a way to keep donations coming in outside of large pushes — and it’s a good way to spread awareness!
Many of the nonprofits we work with rely heavily on rolling donations. An option that many don’t consider for increasing this type of donation when working on nonprofit funding models is utilizing donation functionality on your nonprofit’s social media profiles or adding a donation page on your website. Facebook makes it easy to launch and share fundraising campaigns, all while engaging with current connections on the platform. It also makes it easy for those connections to share with their connections. Definitely a great, free funding tool you can use to diversify your nonprofit funding models!
In thinking about the long-term of your nonprofit, you can consider investing. While this is a big step that is not risk-free, it can set up your organization for funding success down the road. Board members should consider working with an investment partner to figure out what option (bonds, equity, index funds) would work for your organization. Over time, the money invested can produce the difference between being able to expand your services in the future or not growing over time.
Funding is an important part of running your organization, and being able to have several different options can make your service delivery easier. Instead of only relying on grants and being able to help 50 people, diversifying your funding streams can mean having the resources available to help 150 people. It is also a smart move because in case a grant is not renewed from year to year, your organization can have other streams to use to keep your service delivery going.