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
- 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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Explore resources curated by our staff for this topic:
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.
The Chronicle of Philanthropy
Shattering the Myth About Diversified Revenue
Clara Miller argues that diversifying revenue is not always the answer for nonprofits.
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.
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.
Greenlights for Nonprofit Success
Top Five Myths Regarding Nonprofits
Presents 5 commonly-held myths about nonprofits, including their revenue sources.