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Non Profit Funding

Non Profit Funding

Factors to Consider Regarding Non Profit Funding

Non profit funding is the lifeblood of a non profit.  It is what pays the bills, staff, and keeps the programs funded.  However, many, when learning how to start a non profit organization, disregard key factors that will affect the ease in which the non profit funding will be obtained.  The way in which a 501c3 is put together can be a determining factor in the ability it will or will not have in getting initial funding.  I will give you a few pointers below.

There are many different ways to start a nonprofit and obtain non profit funding. The most stable types of non profit funding are individual donors and donations from corporations.  The gifts from these two sources may or may not be large and most likely takes a combination of non profit funding sources to fund a non profit that has a substantial budget.  While donations from individuals is the easiest and many times the most stable form of non profit support, a nonprofit may find that it needs to find some larger sources for donations.

Corporations a Source For Non Profit Funding

Corporations and other non profits can be a good source non profit funding from larger donations.  Many corporations give large amounts of non profit funding to charities.  While larger gifts might be desirable, donations from organizations are more difficult to rely on.  Having a few larger gifts mixed in with donations from individuals can be a good strategy for funding until a stable donor base can be established. Unfortunately for those just starting a non profit, there is a challenge in getting non profit funding from corporations and other granting organizations, otherwise known as grantmakers.  The method of starting a non profit can make a huge difference in its ability to solicit funds from these organizations.

Non Profit Funding Challenges

Many are unaware that larger gifts and donations might be unreachable during the first years because the 501c3 has not established a track record for which donors and grantors can be comfortable that the non profit will do what it says it will do with funds.  Once given, donations and grants are not refundable, and the grantor has no recourse.  Many times a corporation or granting non profit likes to choose the programs or ways the donations are used inside the non profit to which they donate.  There are certain programs that many of these organizations like to donate money towards and so they specify how they would like the grant monies used.

This prompts many corporations and granting organizations to work with only established non profits with a proven history of honoring grantors’ gifts.  This circumvents many newly established independent 501c3 non profits from engaging these organizations for non profit funding until after being established for several years.

One easy way to circumvent larger non profit funding being out of reach is by starting a non profit and establishing it alongside other more established non profits.  The easiest way to do this is through a fiscal sponsor.  Through Fiscal Sponsorship, the newly established non profit sits inside of an existing independent 501c3 non profit.  This fiscal sponsor organization, with its established history, gives the newer non profit history.  The newer non profit can use its sponsor’s history to prove to granting organizations that it can be trusted with their donations. Of course, the Fiscal Sponsor and the sponsored non profit will want to track every penny of the non profit funding and grants in order to establish good grant compliance.  For more information on fundraising and fiscal sponsors read the “Simple Nonprofit Manuel” and “Simple Fundraising” which are part of the “Simple Nonprofit Starter Bundle.”

A great way to get started obtaining funding is to learn how to grant write.  Grant writing can be a great way to find ongoing funding for a non profit.  Learn non profit funding through the online grant writing workshop available on this site at http://SimpleNonprofit.com/grantwriting.

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