4 Top Funding Sources for a Nonprofit Organization

Written by Dave Lavinsky

funding sources for nonprofit


Nonprofit organizations gain support through many different means. Whether you are looking for volunteers to help your organization, or need to apply for a grant, there are numerous funding sources available. This article lists five of the main types of funding sources used by nonprofit organizations.

Common Funding Sources for a Nonprofit Organization

Nonprofits receive funding from a variety of different sources most of which require you to first complete your non-profit business plan. These may include:

✓   Government Grants

✓   Local/Corporate Donations

✓   Special Events

✓   Annual Memberships


Government Grants for Nonprofit Organizations

Government grants are awarded by local, state, and federal governments, as well as government agencies. In the United States alone, government grants top $500 billion a year.

When starting your nonprofit organization, in order to qualify for a local or state grant, you must meet certain criteria and specify how your organization will benefit from the money. Grants based on need — known as “earmark” grants — are normally awarded by federal agencies such as the Indian Health Service (IHS).

Many government grants are awarded for a specific purpose, such as buying equipment or technology. In order to qualify for these grants, you must meet the criteria set by the organization that is awarding them. 

Governments may also provide general operating support to an organization that provides public goods and/or meets certain requirements. For example, a charity that is recognized as a 501(c)(3) organization may receive support from the United Way.


Local & Corporate Donations for Nonprofit Organizations

Individuals and businesses provide monetary donations to nonprofit organizations through local fundraisers, corporate giving programs, and other methods. Local contributions include foundation grants, corporate sponsorships, and individual donations.

Many nonprofits also benefit from special events that are held in their honor. There are many examples, including volunteer fundraisers, dinners, auctions, and other events. Some of these functions may charge tickets for entry in order to cover the cost of food and entertainment in addition to raising money.


Annual Memberships for Nonprofit Organizations

Nonprofit organizations can generate revenue from annual memberships. Subscribers pay a fee in order to receive certain benefits, such as discounts on services or publications. Many organizations have special members-only events and activities that encourage people to join. Membership fees may also be tax-deductible for the member.


Special Events for Nonprofit Organizations

Nonprofits can benefit from hosting or sponsoring special events. These can include gala dinners, signature theater performances, and other activities.

Nonprofit organizations may also benefit from participating in traditions by serving as the host of a holiday party or being involved in local parades. Sponsoring community celebrations also provides an opportunity to promote awareness about your cause, mission, and/or services throughout the year.

Grants, donations, and special events are just some of the common funding sources that nonprofits rely on. Although finding the resources you need can be challenging, following best practices for fundraising will help you find success in reaching your goals.

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10 Tips to Get Your Nonprofit Organization Funded

In the modern world, nonprofit organizations have an extremely difficult time sustaining themselves without outside funding. There are so many nonprofits out there competing for funding sources that it is hard to stand out from the crowd.

Here are ten tips to get your non-profit organization funded:

  1. Be authentic – Donors want to give their money to a cause, not a company. Be real and be yourself. If you are unable to convey your personal passion for your nonprofit, then there is no way that anyone else will be able to connect with what you’re doing either.
  2. Be specific – When asking someone to support you, go into detail about exactly how they will be helping you. The more specific you are, the easier it is for someone to say “yes”.
  3. Be clear about what your nonprofit needs – Be open and honest when describing your organization’s needs. If you are not upfront with donors or stakeholders about how they can help, then they will have no reason to support you.
  4. Be comfortable asking for help – Asking someone to help you out is not an easy thing to do. However, if you aren’t willing to ask for what you need in order to make your dream a reality, then no one else will be able or willing to come forward and offer their support either.
  5. Don’t forget your volunteers – Volunteers are an integral part of any non-profit organization. They are the ones that keep it running on a day-to-day basis. Without them, you won’t be able to accomplish your goals or reach your full potential.
  6. Make yourself available – Another way to get people involved in your project is by making yourself readily available to speak with anyone who is willing to offer you their support. They are the ones that will be able to tell others about what you’re doing, so don’t make it difficult for them to get in touch with you.
  7. Ask for feedback – Donations are not the only way that someone can help your organization. If someone is willing to give up their time or knowledge, then take advantage of it and put them to work.
  8. Offer rewards for donations – While it may seem counterintuitive, offering someone a reward for donating to your organization is a way of keeping them engaged. When people feel that they are getting more out of an experience than you are asking them to give, then they will be more inclined to support you again in the future.
  9. Be patient – Ultimately you cannot force someone to donate or volunteer for your organization, so have patience and wait for the right opportunity to arise. Do not waste time chasing after those who do not want to support or work with you; instead, go after those that will make a difference.
  10. Make it easy for people to support you – Last but not least, set yourself up to succeed by making it as easy as possible for people of all backgrounds and experiences to get involved with your organization. As long as they are willing, then you should be able to find a way of getting them the help that they need.

If you are able to follow all of these best practices for fundraising, then there is no reason why your non-profit organization should have to go without the support it needs. Remember, the rewards are well worth the effort.



It is important to remember that your non-profit organization needs funding in order to survive. Fortunately, there are a number of different sources from which you can choose. In order to set yourself up for success, follow the ten tips listed above and make them your mantra as you begin your nonprofit journey.

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