Non-profit organizations are individuals-based groups that function independently that could focus on specific humanitarian and environmental causes, social missions, and international philanthropic.
Depending on its missions and objectives, a non-profit organization can operate at local, national, or international levels to serve specific causes or purposes.
According to the World Bank, there are two main groups of non-governmental organizations.
The first one is an operational non-profit organization that focuses on development projects. And then, there are non-profit advocacy organizations that focus on promoting specific causes. But certain organizations might fall into both categories as well. Many successful organizations have huge scale budgets.
There are some top non-profit organizations, such as The Red Cross, WWF, Oxfam, Unicef, etc. And you might have wondered how they are funded and kept operating for years to years.
Do they even make money?
You will find the proper answer right here in this blog post.
The non-profit organization’s forms can be different from one country to another. Although the government does not necessarily manage them, they often obtain funds from the government, among other funding sources.
The funding sources can make organizations thrive for more extended, paying the expenses to run their missions and achieve their specific goals.
The funding sources can be everything from membership fees, sales of merchandise, service fees, private sector funds, philanthropic foundations, individuals and groups donations, grants from local and state agencies, as well as private donations.
Many non-profit organizations have attained a massive amount of donations from wealthy individuals like Warren Buffett, Ted Turner, Bono, etc. But most of them rely on a large number of small contributions from the participating individuals and groups rather than a small number of large donations from wealthy individuals.
That’s why many organizations won’t only rely on limited funding resources. Instead, they’d open as many channels of funding as possible. There are various legal methods for attaining the funds.
Here are the standard methods for attaining funds that are applicable in many countries:
Contributions
Contributions come from partners and other organizations with the same purposes and corridors as those of the particular non-profit organizations. The gifts are often more feasible than donations because there is a commitment in them. For instance, organization A contributes to a non-profit one. They will conduct it daily, weekly, monthly, or annual, depending on their promises.
Organizations’ products and services sales
Depending on the types of organizations, it is possible to sell products and services to the public to raise funds. In this case, the staff within the organizations will all be participating in the missions. The revenues will be supervised tightly by the people in charge so that the funds won’t be abused.
Matching grants
In this method, the organization will make an application to a grant funding agency. To be qualified, this organization must raise the same amount of money that the grant funding agency offers to them. The grants are for long-term projects.
In-kind donations
The in-kind donations come from many different sources. In this case, the responsible folks won’t need to make proposals to specific agencies or whatsoever. The funds can be attained from sales, interest, commodities, and others.
Memberships
The membership of non-profit organizations can be influential supporters in the material category. Most of these groups have formed memberships with startups, entrepreneurs, and corporations who have seen the same interest in the project and have proceeded to work together to certain extents. There is a fee called membership dues.
These members will pay the membership dues to stay as members of the organizations. Not only can they support non-profit organizations financially, but they can also support them in many projects by transferring their resources, professionals, sets of skills, and others. These organizations will be more recognized by the public when they work together with big corporations as well.
Investments
The investment income is also one of the most important funding sources for non-profit organizations. The internal members manage the investments. But the financial experts will handle their assets.
These investments can be from the stock markets, obligations, loans, trading, and so on. But we already know that some investments also have risks. The risks of loss are also there.
Fundraising campaigns
The campaigns can take various forms, depending on the executors of the project. For instance, the most common practice is promoting their causes through social media, offices, malls, public places, and events, etc.
In other cases, fundraising will be more effective when the organizations join hands with influencers. Non-profit concerts, for instance, are an effective way to raise funds. The sales of the tickets will go to the organizations’ purse.
Grants
The grants usually come from grant funding agencies. Grants are the most common form of funding but can also be the most challenging to get by. Grants are generally viable in project development. It is also one of the most significant contributors to many non-profit organization projects. But to attain the grants is complex and complicated. The proposals must be convincing enough so that the grants will be liquidated.
Donations
It is one of the most common funding sources for non-profit organizations. Individuals and groups usually contribute. Here is where small donations can be delivered by many individuals supporting the cause or specific projects developed by the organizations. The rooting participants will hand over their contributions in cash, fiat currency, or cryptocurrencies.
This method is also a no-brainer since the organization owner must think about how to make such a captivating campaign so that the donations can be made.
Crowdfunding
Crowdfunding platforms are available on the internet. It will be easy to find dozens of platforms that facilitate organizations and investors to meet as you browse around. Through these platforms, individuals and groups can donate funds through the internet. These crowdfunding platforms usually charge little to no fees.
