Wednesday, February 24, 2010

How are nonprofits funded?

The green, green grass of funding...

Nonprofits, just like their for-profit partners, require funds to continue operations.  
How do nonprofits raise money to fund their operations?  If they are competitive and progressive in the nonprofit sector, they have a variety of funding resources that are evaluated and prioritized annually.

Resources
Individuals
According to the June, 2009 news release from the Giving USA Foundation, charitable giving in the United States exceeded $300 billion for the second year in a row in 2008. Donations to charitable causes in the United States reached an estimated $307.65 billion in 2008, a 2 percent drop in current dollars over 2007.  The 2008 number is the first decline in giving in current dollars since 1987.

Federal, State and Local Governments - typically through grant applications in the areas of social services and healthcare

Public and Private Foundations - grant applications

Community/Family Foundations - relationships and grant applications
 
Corporations - relationships and grant applications

Federated Funds - i.e. United Way - grant applications

Special Events - donor support through dinners, walks, auctions, etc.

Annual Fund - annual (or more frequent) appeal to community members

Membership Campaign - annual appeal to community members

Capital Campaign - usually a multi-year campaign to raise funds for capital projects or a specific project/event

Faith Community - individual or group donor support through funds or in-kind investment

Product/Services Revenue - sales of services, items, products

Planned Giving - often a large donation at the time of death or an immediate large gift

Endowment Income - funds that produce interest that is used to support the organization

Each resource has its advantages and disadvantages to the organization in terms of cost effectiveness, record keeping, accessability, risk, process, guidelines, requirements for board involvement , mission focus and requirements for donor investment. 

To be successful, a nonprofit must be positioned accurately, particularly for the fundraising effort.  The organization will benefit by knowing its own strengths and weaknesses.   

Tuesday, February 9, 2010

Five Moneymakers in Nonprofit Fundraising

With this blog, DCRinsights, I am able to share my knowledge about fundraising, marketing, grant writing, strategic planning, organizational development and merger, leadership and governance in the nonprofit sector.  My background includes 10 years as senior executive management for two human services organizations, providing services to over 25,000 homeless and domestic violence victims annually. 

I am in the process of developing this site as a vehicle to help nonprofit organizations increase their sustainability, donations, community position and media visibility.  My company, DCR Design, a division of Rice Agency, features a department with a profit and non-profit business consulting focus.  I am looking forward to sharing my insights with members of nonprofit organizations.


Diana Campbell Rice

Upcoming Topics
  • How are nonprofits funded?
  • Develop a Direct Mail Campaign
  • Develop Your Case for Support
  • Develop a Membership Campaign
  • Choose Your Board Members Wisely
  • Create Special Events
Recommended Reading
  • Please scoll to the bottom of the blog for reading suggestions