What Is The Best Way To Fund My Nonprofit?

Your nonprofit exists to fulfill a unique purpose fueled by staff, volunteers and MONEY!   

How to fund your nonprofit

Nonprofit funding sources include individual donations, fees for goods/services, memberships, grants, federal funding, corporate sponsorships and inkind donations.

Concentration in one source

The adage “don’t put all your eggs in one basket” applies to nonprofit funding. When possible, it is best to build a diverse funding model that includes more than one source of income.  This helps to mitigate the impact loss of one source could have on your mission.  For example, if all of your income comes from a grant and a change in spending priorities causes that funding to be cut off, your ability to operate could be interrupted. 

Concentration in one donor

The wisdom of diversification also applies within a funding source.  For ministries that exists solely on the donations of individuals, it is important to look at the composition of your donors.  What % of your donations comes from your largest donor?  How many donors do you have in various ranges (bands) – such as less than $1,000, between 1 and 5k, 5-10k and over 10k per year?  What is the age/life stage of your donor population?

Annual review

As you prepare your budget annually, take time to analyze your funding sources.  Review this with your board and thoughtfully consider the risks that could impact your funding.  Look for plans to mitigate those funding risks so that your impact is not interrupted!