The name “nonprofit” can sometimes mislead people to think nonprofits don’t make any money. While these organizations don’t make a profit, they need to bring in funds to support their mission-based programming and operating expenses. In this article, we’ll look at several nonprofit funding sources and how they support nonprofits’ important work.
Just like for-profit businesses, nonprofits are funded by a variety of income streams. These streams typically fall into two categories: earned income and contributed income.
While it may seem counterintuitive to think about nonprofits making money, they need to have a steady stream of funding to support their mission. Although their aim isn’t to bring in a profit, having sufficient funds is crucial to maintaining operations.
Let’s look at six ways nonprofits make money!
Fundraising is the primary income source for most nonprofit organizations. Whether they’re fundraising online, in person, over the phone, or through the mail, asking the public for donations is a big part of what allows them to do so much good.
Donorbox has helped more than 80,000 organizations raise over $2 billion with easy-to-use, comprehensive fundraising tools like:
And more! The right platform can streamline the fundraising process, introduce new ways to raise more, and bring more value to your organization.
Events are a great way for nonprofits to make money, spread awareness about their cause, and connect with their community. Nonprofits can host upscale events like galas or golf fundraisers or more casual gatherings like a fall festival.
Whatever the event looks like, they can make money for nonprofits in the following ways:
And more! There are many opportunities to make money before, during, and after events – which is why this is such a popular revenue generator for nonprofits.
Donorbox Events helps nonprofits sell more tickets without adding extra work for staff members or volunteers. Set unlimited ticket tiers, as well as deadlines and limits for each tier. Collect any necessary information from your guests and ask them for an additional donation on top of ticket sales (another revenue generator!). Plus, let the tool do the tax work for you by calculating the tax-deductible amount of each tier based on the fair market value. And create an unlimited number of promo codes for free or discounted tickets, boosting sales and that all-important revenue.
Check out how Harvest for Hope used Donorbox Events to create an Events page to sell tickets for their fundraising dinner. They included all the necessary information on their Events page, including the impact of donations.
Nonprofits can see a nice boost in income by selling products and merchandise supporting their mission.
Branded merchandise can bring in funds from supporters who want to represent your organization in public. Nonprofits that have an in-person presence, like a museum, often sell these goods in their gift shops, and sometimes they even sell food. Selling merchandise as well as food and drink can also bring in additional funds at events such as trivia nights, bingo fundraisers, and more.
If your organization is looking to sell products but you don’t have a point-of-sale system, consider investing in a donation kiosk. The Donorbox Live™ Kiosk app turns a tablet and card reader into a powerful tool to collect payments and donations. Supporters can pay with a card, smartphone, or smartwatch – so no more missing out on donations because your visitors aren’t carrying cash.
Looking for more ideas about products to sell and how? Check out this blog!
Memberships are a great nonprofit funding source for sustainable growth. Typically, a nonprofit membership program will include several tiers with levels of membership dues and benefits. Because membership dues are paid on a regular basis, they are a consistent source of money for organizations.
Donorbox helps organizations sell more memberships with Donorbox Memberships. Easily manage recurring payments for membership dues, set up unlimited tiers, and collect contact information from your donors.
Asclepius Snakebite Foundation uses Donorbox Memberships to collect membership dues on a monthly or annual basis. Take a look at how their page details what the member receives at each membership plan level.
Set up your Membership Program
Some nonprofit organizations have activities and programs relevant to their mission like theatre performances, museum exhibits, dance performances, camps or classes, and product sales. These activities generate revenue that nonprofits use to cover their operating costs and support their mission.
While this may not be part of every organization’s mission, most organizations can choose an additional revenue-generating activity to help diversify their income.
Grants are another common way nonprofits bring in funds to support their mission. There are many different kinds of grants, including government grants at state and federal levels and grants from community, family, and private foundations. There is typically a grant application process for each, during which nonprofits submit proposals with details about their programs, additional revenue streams, operating expenses, and more.
Learn how to get a start-up grant in this blog. If your organization is looking for more advertising opportunities to boost awareness and bring in more funds, consider applying for a Google Ad Grant.
Bonus Resource: Watch our playlist on fundraising ideas! Subscribe to our YouTube Channel to get fundraising tips and strategies from nonprofit experts.
While nonprofits do make money, they don’t make a profit. All of their revenue goes toward supporting their mission and operating costs – which means their funding sources are vitally important.
Donorbox helps organizations raise more with powerful and easy-to-use fundraising tools. Discover all of our fundraising products and start fundraising in under fifteen minutes!
Check out the rest of our Nonprofit Blog for more fundraising insights. Subscribe to our newsletter for a curated collection of blogs delivered to your inbox every month!
Lindsey spent years wearing many hats in the nonprofit world. Whether she was helping arts nonprofits with their messaging and content, planning a fundraising gala, writing an NEA grant proposal, or running a membership program with over 400 members, she learned how to navigate – and appreciate! – the fast-paced world of fundraising. Now, she loves sharing those hard-earned lessons with the Donorbox community.
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Lindsey Baker Bower