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. The National Center for Charitable Statistics' Nonprofit Sector in Brief 2014 provides a pie chart showing the percentages of various sources of nonprofit revenue:
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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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Staff pick
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.
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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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Staff pick
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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Staff pick
Urban Institute
The Nonprofit Sector in Brief 2019: Public Charities, Giving, and Volunteering
This brief funded by the Urban Institute highlights trends on private charitable contributions and volunteering.
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Greenlights for Nonprofit Success
Top Five Myths Regarding Nonprofits
Presents 5 commonly-held myths about nonprofits, including their revenue sources.