Let JMT help your nonprofit generate better and more reliable revenue
While everyone should be encouraged to donate to nonprofits of their choice, philanthropic donations are not by any means the leading source of nonprofit revenue — philanthropic donations only made up roughly 13 percent of a nonprofit’s total revenue. Other key sources of revenue include fees from programs, goods, or services, government grants, and investments.
Take Advantage of your Tax-Exempt Status
One of the leading sources of income for a nonprofit comes from selling a good or service. These goods or services can be just about anything from t-shirts and coffee mugs to washing peoples’ cars. Take advantage of the nonprofit-specific benefit of no federal income tax! Nonprofits are exempt from federal income tax by the IRS, meaning you can maximize your income.
Fundraisers, if successful, provide funding for your nonprofit (hence the name, FUND-raising) and an opportunity to engage your members. Nonprofits grow with the support of their members, so it is important to keep them engaged and feel like they are making a difference in the big picture.
Fundraisers can be hosted by your organization itself, or they can partner with another. Some well-known fundraising partners include:
- Chipotle Community Fundraising: This is a very hands-off style fundraiser. By filling out a form on their website, you are able to choose a date and time range in which you will receive 33 percent of event sales. Easy money, right?
- Bonfire: Bonfire is a free website where you can design, sell, and buy custom-made items that represent your nonprofit. Simply launch a fundraiser, promote your items, and then cash out on your profits. There’s a creative aspect to this fundraiser, but their user-friendly website makes the entire process run smoothly.
- Krispy Kreme: Krispy Kreme offers two different kinds of fundraisers, so you are able to choose which is best for your organization. You can choose from a digital fundraiser or an in-store fundraiser. Both options include Krispy Kreme donuts at a reduced price, allowing your organization to keep more of the profits.
Federal grants are extremely time-consuming and competitive, however, as the saying goes… “the greater the risk, the greater the reward”. Grants.gov offers a tool that allows you to search for various grants and choose which one is right for you and your organization. The amount of funding varies from year to year as the federal government reevaluates its budget.
Account registration can take anywhere from 1 to 3 weeks, so it is best to leave yourself plenty of time before the application deadline. After submitting an application, you can expect an extensive application review process including initial screening, programmatic review and assessment of applications, and financial review.
Nonprofits are free to invest their money how they choose, but also at their own risk. Investment opportunities, such as stocks and bonds, vary in terms of their risk factor. To alleviate as much risk as possible, it is recommended that nonprofits establish an internal investment policy. This process will ensure direct oversight of the nonprofit’s investments.
While finances are ultimately the responsibility of high-ranking board members in the nonprofit, many nonprofits turn to outside resources specifically for investments. There are many investment management companies, such as Vanguard, to consult during this process.
The Bottom Line
There are many ways for your nonprofit to generate enough revenue to sustain itself. While some of the most common include fees from programs, goods, or services, government grants, and investments, you are also free to brainstorm additional ways. With a varying level of difficulty and investment, you are sure to find a good fit for your organization.
Since 1991, JMT Consulting Group has worked exclusively with nonprofits to deliver the finance, development, and productivity solutions required to meet their unique goals of sustainability and mission effectiveness. Their experts use decades of nonprofit experience to mitigate risk, anticipate needs and make holistic recommendations based on the broad range of projects they have successfully delivered to over 2,000 clients across the U.S. If you are interested in learning more about better methods for managing your revenue streams, contact us here.