How are nonprofits funded?
Nonprofits can and do use the following sources of income to help them fulfill their missions:
- Fees for goods and/or services
- Individual donations and major gifts
- Bequests
- Corporate contributions
- Foundation grants
- Government grants and contracts
- Interest from investments
- Loans/program-related investments (PRIs)
- Tax revenue
- Membership dues and fees
While opinion varies as to what a nonprofit's "ideal" mix is, using several different sources to achieve sustainability is generally a good practice. Candid’s Social Sector Dashboard provides data about the percentages of various sources of nonprofit revenue, demonstrated here in a pie chart:
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See our related Knowledge Base Articles:
- Where can I learn more about fundraising planning?
- What is a program-related investment?
- What is strategic planning? Where can I learn more about it?
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Staff-recommended websites
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Giving USA
2022 Giving Overview
Giving USA's 2022 Giving Overview is a data visualization tool that allows you to view current and historical giving trends.
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Candid
U.S. Social Sector Dashboard
Candid's annually updated website shares key statistics about the organizations, financial flows, and people that make up the social sector in the United States.
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Urban Institute
2019 Nonprofit Sector in Brief
This brief highlights trends in the number and finances of 501(c)(3) public charities and key data insights on the nonprofit sector, such as private charitable contributions and grantmaking by foundations.
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Stanford Social Innovation Review
Ten Nonprofit Funding Models
For-profit executives use business models—such as "low-cost provider" or "the razor and the razor blade"—as a shorthand way to describe and understand the way companies are built and sustained. Nonprofit executives, to their detriment, are not as explicit.
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The Chronicle of Philanthropy
Shattering the Myth About Diversified Revenue
Clara Miller argues that diversifying revenue is not always the answer for nonprofits.
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Nonprofit Quarterly
Beyond Sustainability: Identifying the Right Resource Mix for Growth
This article is excerpted from chapter 10 of the book, Finance Fundamentals for Nonprofits: Building Capacity.