Are you a nonprofit looking for ways to increase your revenue? Do you feel like you’ve tapped into all the traditional sources but still aren’t satisfied with your bottom line? It might be time to explore some new revenue sources.
Nonprofits—especially small ones—often rely on a variety of different income streams to keep them running. Those range from government grants and other public funding, to donations, corporate giving, and more. But there are also some less-talked-about revenue sources out there that nonprofits seem to be overlooking that could really help them meet their goals.
In this article, I’ll be walking you through some of these lesser-known revenue sources and talking about the pros and cons of each. When I’m finished, you’ll have a better understanding of how your nonprofit can capitalize on these new income streams. So let’s get started!
Individual Donors & Crowdfunding
Individual donors may be the first thing that comes to mind when you think of revenue sources for nonprofits, and it’s true—individual donors are an incredibly important source of funds.
However, if you want to receive donations from an individual donor, it’s essential that your nonprofit has taken the time to really understand its target audience. Donors want to know who they are giving their money to, and so it’s key that your nonprofit has a clear mission statement and a real plan for how your organization will use the funds.
Another way to generate revenue for your nonprofit is through crowdfunding. It’s easy—just set up a profile on platforms like GoFundMe or Kickstarter (to name only a few!), engage with potential donors, and showcase how their donations will help make a difference. With crowdfunding, there are no strict parameters—you can receive large or small donations!
Grants are another awesome revenue source for nonprofits. Grants are funds given to nonprofit organizations by corporations, foundations, government entities, and other charitable organizations. Grant funding can be used for nearly anything from supporting educational programs to offering additional resources for fundraising events.
There are two main types of grants: unrestricted and restricted. Unrestricted grants provide general operating funds and can be used at the organization’s discretion. Restricted grants require that the funds be used for specific projects or activities specified by the donor.
When looking for grants, it’s important to understand what type of funding is available and who is eligible to apply. The application process may vary depending on the funder’s criteria and requirements, so it’s best to plan ahead and research potential funders before applying. Additionally, keep in mind that many grants require your organization to already have an established track record of success in order to be eligible.
Overall, grants can be a great way to generate additional revenue for your nonprofit organization, especially if you are well-prepared with a compelling proposal that demonstrates your organization’s impact.
Government Grants and Funding
Government grants and funding can also be a great revenue source for nonprofits. Federal and state governments provide grants to nonprofit organizations for a variety of reasons, such as to fund specific programs, meet funding gaps, or support research and development. Grants can range in size from small amounts of money to large funds, depending on the goals of the grantor and the needs of the nonprofit.
In order to apply for government grants, nonprofits must first research the opportunities available and then fill out an application form with detailed information about their organization’s purpose, mission, goals, and financials. The process can be lengthy—but once approved, it can provide much-needed funds that can keep your organization running smoothly.
Fundraising events can be a great way for non-profits to generate revenue as well as raise awareness of your mission. You may think of fundraising events as an opportunity to bring in donation funds, but there are many other ways to make money during these events.
Organizers can charge entry fees for guests who attend the event. This is a great way to raise money quickly and easily without having to solicit donations from guests.
Product & Service Sales
Organizers can also sell products or services at the event, like merchandise or food and drinks. This is a great way to bring in extra revenue while engaging attendees with your non-profit’s brand.
Sponsorships & Donations
You can also secure sponsorships or donations from local businesses or organizations that support your mission. These can either be monetary donations or gift cards and other goods that you can use as prizes for event contests, games and raffles.
Fundraising events are a great way for nonprofits to raise money, build relationships with their community, and spread awareness about their cause. With just a bit of planning and creativity, you have the potential to make your next fundraising event a resounding success!
Check out our blog post How to Successfully Market Your Nonprofit Event to learn how to make the most out of your event!
Corporate Donations and Sponsorships
Another revenue source for nonprofits you might not be familiar with is corporate donations and sponsorships. Corporate donations are when a company gives money directly to a nonprofit, usually as part of their corporate giving program. They can also take the form of grants or other monetary donations.
On the other hand, sponsorships involve companies making investments in a nonprofit’s goals or projects—similar to how a business might sponsor an event or athlete. This could mean donating a certain amount of funds, providing products or services to the nonprofit, paying for staff time, etc. Sponsorships come with more visibility than traditional donations, which can help attract more donors and volunteers.
It’s worth noting that corporate giving can come with restrictions and expectations, so it’s important that nonprofits take the time to look into each potential donation before committing to it. That said, if done correctly, both corporate donations and sponsorships offer great potential for nonprofit organizations looking for alternative revenue sources.
Generating Revenue With Social Enterprises
Did you know that nonprofits can make money by launching a social enterprise? A social enterprise is a business owned and operated by a nonprofit that produces goods or services for the purpose of generating income to fund its core mission.
Range of Social Enterprises
The types of social enterprises that exist are numerous—from catering services and brick-and-mortar stores to online shops and educational programs. Depending on the organization’s goals, resources, target market and mission, there is a wide range of options nonprofits can choose from when exploring different kinds of revenue sources.
Running a social enterprise has many benefits for nonprofits, such as:
- Increased revenue potential
- Diversified revenue sources
- Ability to cross-market with other organizations
- Stable source of funding
- Improved public relations
- Increased public awareness about the organization’s work
- Opportunities to reach new audiences or markets.
The best part is that social enterprises can be tailored to fit any organization’s size or needs. And since they’re tied directly to the mission, they often benefit the cause more than traditional fundraising efforts do. So if you are looking for additional ways to generate income, a social enterprise might be worth exploring!
QCDs and Stock Gifts
Did you know that Qualified Charitable Distributions (QCDs) and stock gifts are two forms of revenue sources for nonprofits?
When it comes to QCDs, those who are 70 ½ or older can donate directly from their IRA accounts up to $100,000 each year to charities. This means that the donor gets an immediate tax break by avoiding the taxes that would be required if they’d taken a taxable distribution from their IRA and then donated it.
On the other hand, there is also the option of donating stock gifts to a charity. By doing this, the donor avoids paying capital gains tax on the appreciation of the stock, as well as receives an itemized deduction for the full market value. This can be especially attractive for highly appreciated stocks which have remained in the donor’s portfolio for more than a year.
In conclusion, QCDs and Stock Gifts are two practical revenue sources for nonprofits that would otherwise be difficult to access. With these two options in mind, donors have more opportunities to leverage their donations and make a greater impact with their contributions.
If your nonprofit organization is looking for a more long-term source of revenue, you might consider bequest gifts. Bequest gifts are donations made through someone’s estate—in other words, money that is left to your organization in the donor’s will.
Bequest gifts can be a great way for non-profits to build up reserves over time, and can even be used to fund major projects or campaigns. But you won’t see any of this money until after the donor passes away, so this option isn’t ideal if you need an immediate cash injection.
To encourage donors to include your nonprofit in their will, there are several steps you can take:
- Make sure your mission statement is clear and compelling enough that donors want to support it by leaving money in their will.
- Outreach: reach out to current supporters or those interested in legacy giving who may not know about this option
- Promote: use existing social channels or create dedicated ones (e.g; Twitter hashtag) to spread the word about legacy giving
- Make it easy: create a simple form for donors to list their intentions in writing so there is no confusion
Overall, when it comes to revenue sources for nonprofits, the options are vast and varied. You don’t have to settle for just one or two. Consider all of the different types of revenue sources available and determine which ones will work best for your organization.
For example, grants and donations are both popular revenue sources for nonprofits, but depending on the type of organization you have, you may also want to pursue sponsorships, dues and memberships, or crowdfunding campaigns. Every organization is different, so be sure to research each one and figure out which routes make the most sense for your organization.
The specific types of revenue sources you choose will depend on a variety of factors and can vary greatly depending on your specific organization. However, by taking the time to explore the various available revenue sources, you can ensure that your nonprofit can best leverage all of its assets.