To implement projects, non-profit organizations (NPOs) would first and foremost need funds. There are various methods and venues to acquire funds, thus, non-profits should be strategic in seeking approaches suitable to their needs and capabilities. Most if not all NPOs use more than one method to acquire funds, although most of them focus on the ones where they can gain more. Listed below are a few examples of the various methods an NPO can use to get started on their projects.
Normally, this is the first thing an NPO would aim for. Grant funding agencies who provide funding for non-profit organizations are the constant topics of research for non-profits. Applying for grants can be time-consuming and even stressful especially when denied. However, to continually fund many of their projects, grants are usually the biggest contributors. Apart from being the biggest contributors, applying for a grant, even in the event of rejection, really helps non-profits grow as an organization. The time dedicated to planning or organizing proposals can only help implement them more surely, whether they receive grants or not.
One of the easiest ways to acquire funds would be through the donations some individuals or organizations give in cash. Sometimes, during an event, or even in the NPOs office, interested parties would hand over their donations. Although this is an effective and relatively easy way to find capital, most non-profits don't and shouldn't really rely on this method. Although they're not relied upon, cash donations are still highly anticipated by non-profits as it often provides a huge relief to struggling organizations.
Cash donations may sound great but incur the problem that they aren't binding and constant. On the other hand, contributions may be. Partnering with organizations will often affect them providing annual contributions to particular NPOs. Contributions are usually given in large amount by board members of partner organizations. Although not required, it is often times seen as common courtesy.
Because acquiring grants on a regular basis can be challenging, some NPOs have formed memberships with large corporations who in turn will need to pay a certain fee known as their membership dues. These members are not only beneficial because of the dues they pay, as they're also often partner institutions for many projects. Members also help NPOs become more known to the public through their partnership with big corporations, and in effect will give NPOs the capacity to receive more donations as well.
Investment income, when used and managed properly, can be beneficial to anyone, NPOs included. Investments can come from bank loans, the stock market, and many others. Although beneficial, investment incomes can be quite risky and incur losses as well. Creating accounts and leaving money in the bank to grow, although can be unsafe, is considerably the venue where there aren't as many risks. But that practice isn't very often done as the growing process takes really long and does not really earn a desirable amount. Investing in the stock market is often done but can incur losses as well because assurance isn't something this particular practice can provide.
Fundraising campaigns can be done through various methods. It can be through a booth, social media campaigns, and partnerships, among others. Booths can be out up in malls, offices, and even in partnership with some events where people can hand in their respective donations after learning about the organization. Another method of fund-raising could be by hosting events. Mostly, profits from the sale of tickets or other items will go directly to a project organized by NPOs.
In recent years, NPOs have been using social media as a form of raising funds. Websites like GoFundMe have gained popularity where users can read about NPOs, their advocacies, and projects. Through that, they can donate funds through the internet. Of all the examples given for fundraising campaigns, the use of social media is the method used by majority given that it comes with little to no cost to the organization, and yet can deliver effective results.
Matching grants have been reoccurring in many funding sources for non-profit organizations. Although not known to many who aren't involved in raising funds, this practice has been proven to be effective. Basically, a grant funding agency will only approve a grant if an NPO can prove themselves capable of maintaining the projects to be funded. To prove themselves, NPOs will need to raise the same amount of money being offered by the grant funding agency. This way, after the initial stages of the project, have been fulfilled, there are enough funds to maintain them. This type of grant is meant for long-term projects that will continually be monitored.
An NPO would preferably not want to go through this process and just receive full funds. But as proven in many instances, NPOs actually have the capacity to raise funds and this practice not only gives them more confidence to do so but also opens doors to future opportunities for them.
Corporate matching programs
Although not very common, corporate matching gifts are very good opportunities for NPOs to raise funds. Basically, a company employee is to donate funds to your NPO and if he or she successfully submits the proper paperwork to the company's human resources department, then the company will donate either the same amount or even more your NPO. With that in mind, it's important to inform those who make donations to inquire and submit requirements to their respective human resources department as for NPOs to receive double or even more donations. Big corporations such as Apple, Pepsi, Johnson, and Johnson, are only a few of the many who participate in this kind of set-up. With such large corporations involved and just a little additional effort to consider, this should definitely be a practice done more frequently.
Program Service Revenue
A program service revenue is similar to fund-raising. In layman's term, this is simply a fund-raising event. Often, this could be in the form of plays, film shows, concerts, parties, and more. Most of the time, the money earned from the sale of tickets will go to a specific project. Often, through the advertisements, people are informed that it's an event for a cause, which encourages people all the more to attend. Although this comes at a cost and can be risky if there won't be many attendees, successful events not only raise funds but awareness to a great crowd. Sometimes, individual donations are even given after the event.
Similar to cash donations, in-kind donations are also just received by the particular NPO. There's no need to apply for such grants, and although it doesn't require much work to be done, NPOs cannot simply rely on this. In-kind donations are usually commodities such as clothing, food, furniture, transportation, and etc. Supposedly, these donations help NPOs and their projects function more efficiently.
Because grant receiving funds from grant-funding agencies can be challenging, NPOs have discovered and have been using loan financing as a method to receive capital. Loan financing is often easier and a lot quicker to receive, but come with greater risks. It has to be remembered that a loan needs to be repaid. NPOs who have the capacity to pay their debts after a period of time can benefit from this but is not suggested for those who may be unsure.
Giving circles aren't really known to many who don't function as an NPO. Some giving circles can be formal or even as informal as possible. Essentially, giving circles are groups of people who want to help charities. Often times, members would also like to get involved instead of just providing funds, although providing funds is what many of them participate in. In some giving circles, members even need a minimum annual donation, although not all giving circles actually observe that practice. Unlike grant funding agencies, giving circles are much more difficult to search for, as they aren't exactly publicly known.
Unrelated Business Income
Unrelated business income (UBI) comes from a variety of undertakings which isn't allied with the NPOs tax exemption. Examples of this would be sponsorships and advertising, among other UBIs.
This is usually something NPOs generally receive given the form of business they're at. Since they are exempted from taxes, refunds are quite commonly received by NPOs.