Eight Great Sources for Charity Funding
To grow and thrive, charity organizations must continually seek out new funding sources. When it comes to charity fundraising, every organization uses a different mix.
Today, technology plays a bigger and bigger role in fundraising, with supporters making more donations via mobile devices and through social media fundraisers. Crowdfunding has also emerged as a driving force in charity funding online.
Here are eight sources for charity fundraising—check them out and you may find new sources for the funds you need to support your mission.
1. Individuals
According to Charity Navigator, the majority of all giving comes from individuals, who gave more than $281 billion in 2016 (72% of the $390 billion given to charity). If you add in bequests, individuals account for nearly 80% of all giving.
Clearly, reaching individual donors should be a central focus of your strategy. There are many ways to seek individual support, including social media, direct mail, advertising, public relations, events, subscriptions, merchandise, affiliate links, and more.
There are two ways individuals can help
1. Using crowdfunding to raise funds from individuals
One of the best methods for reaching individuals is crowdfunding. It dovetails easily with your social media fundraisers and simplifies online giving for your donors.
See these fundraisers for inspiration:
2. Individuals crowdfunding for your charity
To reach new audiences, encourage individuals to start a crowdfunding fundraiser to raise funds for your charity. It’s becoming more popular for individuals to tap into their social networks to help out their favorite causes.
Check out these examples:
2. Charity crowdfunding sites
Crowdfunding platforms make it easy for both individuals and charities to raise funds for specific needs. Some crowdfunding sites also help you keep supporters engaged. For example, when you post updates on GoFundMe, supporters can see all the positive outcomes you’re able to achieve thanks to their donations. This may inspire them to make repeat donations. And when the next fundraising cycle comes around, you don’t have to reinvent the wheel when it comes to outreach—your crowdfunding fundraiser serves as a donor database.
Learn more about the best charity funding websites below.
GoFundMe
With Certified Charity fundraisers, GoFundMe makes it easy to raise money for your favorite charities and 501(c)(3) nonprofits. Powered by the PayPal Giving Fund, these fundraisers seamlessly transfer funds right to the charity and provide tax deduction receipts to your donors.
CrowdRise
CrowdRise helps nonprofits use social fundraising to make a difference. The platform can help nonprofits sell tickets, manage events, and grow their donor base. Premium and enterprise models with advanced features and service are available. CrowdRise is owned by GoFundMe.
Classy
Classy is tailored to large nonprofit organizations operating in multiple locations. The site helps remote fundraising teams work collaboratively and includes a fundraiser reporting tool. Another feature helps teams organize volunteer events, including ticketing and event registration.
3. Foundations
According to Charity Navigator, foundations gave $59.28 billion in 2016 (15% of all donations to charitable causes). This makes them the second largest source of funding for charities. While 15% is a small portion of overall giving, for any given nonprofit a foundation could be its major source of funding.
To receive funds from most foundations, your charity will need to be a registered 501(c)(3) nonprofit.
Foundation grants are most often awarded for a specific program or distinct purpose. Foundations often focus on giving to:
- A specific population: people in a particular demographic group or specific geographical area.
- Certain types of nonprofits. A foundation might direct money to nonprofits in areas such as environmental protection or poverty alleviation organizations.
- Particular types of support, such as funding new capacity, projects, or research.
Foundation types
- Family foundations are legal entities set up by an individual, family, or another group for a specific purpose, usually philanthropy. The Bill and Melinda Gates Foundation is one example, though most family foundations are small and focused on a single issue or particular location.
- Corporate foundations get grantmaking funds primarily through contributions from a for-profit business. These foundations are often the charity wing of a corporation. Examples include the Walmart Foundation and the Ford Motor Company Fund.
- Community foundations have permanent funds or endowments established by many donors for the long-term benefit of residents in a specific area. Examples of community foundations include The Cleveland Foundation and The New York Community Trust.
How to find and apply for foundation grants
Use the following sites to review any foundation’s grants, application materials, and more:
- The Foundation Center’s Foundation Directory Online (FDO) Free helps you find a foundation’s website, contact info, and application forms.
- GuideStar is a directory of nonprofit organizations, including foundations, in the US. Registration is.
4. Grants from local, state, and federal governments
Cities, counties, states, and the federal government issue grants to nonprofit organizations. Applying can be time-consuming and the rewards uncertain, but if you do earn a grant there are key benefits.
Biggest benefits of government grants
- Receiving a grant from a government agency can give a charity more credibility, which can help you secure more funding from other sources.
- Government grants are usually made in significant amounts that can make a real difference to your nonprofit’s bottom line.
- Grants from the government require no repayment (unless you don’t spend the money in the manner outlined in your application).
Biggest drawbacks of government grants
- Grant writing applications are complicated and take a lot of time, patience, and persistence to complete—all for an uncertain reward.
- Government grants often come with conditions and milestones you must meet and report on (to demonstrate effectiveness).
- Often, any funds not spent as outlined must be returned.
- As with foundation grants, government grants are usually offered only to 501(c)(3) organizations.
- Grants are meant for specific short-term purposes, not long-term operating costs.
How to find government grants
Catalog of Federal Domestic Assistance is a listing of all US government grants, loans, and programs benefiting nonprofits, businesses, individuals, and families.
- Grants.gov is a great resource—check out their list of grants posted in the last seven days, and sign up to receive new funding notices via email.
- USA.gov for Nonprofits provides information for nonprofits from the IRS, the US Postal Service, and other federal agencies.
5. Earned income
Earned income is distinct from other forms of charity funding (donations, grants, etc.) because it comes from the sale of products or services. According to the Urban Institute, 47.5% of revenue for public charities (such as public universities, hospitals, and the YMCA) came from fees for services or the sale of products.
If your organization doesn’t sell products or services, ask yourselves whether this is something you can (or should) add to your fundraising mix.
6. Corporate philanthropy
Corporate social responsibility has become increasingly important to large and small businesses alike. Consumers trust socially responsible companies more and reward them with their dollars.
How corporate social responsibility can benefit charities
- Some businesses look for nonprofits to partner with and support. They may wish to fund specific initiatives, events, or fundraisers—such as crowdfunding fundraiser that allows them to leverage their presence on social media.
- Businesses might offer matching donations as part of your crowdfunding fundraiser.
- Beyond the dollars they direct your way, businesses often spend just as much (sometimes more) promoting their partnership as your organization does. In other words, they give you publicity. This can boost your revenue from other sources, including donations made by individual customers of the business.
- Businesses may provide volunteer grant programs that enable employees and others to more easily volunteer hours to your organization.
7. Planned giving programs
Planned giving is known by many names: bequest giving, gift planning, deferred giving, legacy giving, and estate planning. They all describe the same thing: someone leaving money to charity in their will.
Planned giving is becoming more and more popular. According to Giving USA, the practice grew by 2% in 2015.
Once your organization reaches a certain status, make a pitch for planned giving to your supporters. It could grow to become a significant piece of your fundraising pie.
8. Volunteers
According to the Urban Institute, 25.3% of US adults volunteered with an organization in 2014, contributing an estimated 8.7 billion hours to the public good.
The value of all those hours? Approximately $179.2 billion—roughly half the value of all funds donated annually. So while volunteers’ time isn’t technically a revenue stream, your organization might want to view it as one. Boosting the number of hours volunteered for your organization is a huge and valuable win.
Making it rain for charity
Along with our fundraising platform, GoFundMe offers a wide variety of resources for nonprofits, like these fundraising ideas for charity. Our blog is also full of useful tips and information, including The Psychology of Giving. If you haven’t already started your first crowdfunding fundraiser, start one today.