How To Make Money From Non Profit – Launching a new nonprofit is an exciting feeling. With 501(c)(3) status, you have the start of a framework to improve your community, change lives, help others, and realize your bold vision. But big goals require big money. And that means you need to know how to raise funds for your new venture.
Where do you start? Do you have to finance the work out of your own pocket? Should you start a Go Fund Me or become a Facebook fundraiser?
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Self-funding for nonprofits is not sustainable. Some founders can contribute a chunk of money in the early days to set up the infrastructure, but to bring in the consistent money needed to finance big dreams, you need to get comfortable asking others to pitch.
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To fully fund your mission, you must become a fundraiser. You should be comfortable asking people for money, even if you think asking for money is the last thing you would do.
With a plan, the hill won’t feel as steep. You can break down the big task of raising your operating budget into small, fun steps.
To become a fundraiser, it starts with learning the skills and committing to mastering the craft, which takes time. There are many free resources including YouTube videos, webinars, and e-books. By spending time with these free resources, you’ll begin to hear common themes, such as different funding streams, finding the right donors for the work your organization does, and maintaining your relationships with donors to keep them giving. Just be careful – there are so many free resources out there that you might feel overwhelmed if you try to take them all in!
Once you feel comfortable that you know the basics, it’s time to plan. The Nonprofit Fundraising Success Path provides the checklist you need to make sure you’ve covered all the bases before you ask for money. Your path begins in Stage 1, where you just have an idea and decide.
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The next stage is about building a solid foundation, and this does NOT include asking for money. Before you start asking questions, you need to assemble the Board, recruit the initial volunteers, set up an accounting system, create a website, and tackle several other tasks. This will give your organization the infrastructure, systems, and professional polish it needs to earn the trust of donors.
I started fundraising when I was 6 years old selling candles and candy for elementary school. Why not so many of us start there?
My professional fundraising career began when I accepted a position on the local rescue mission Board. I have absolutely NO IDEA what I have said “yes” to. Fortunately, I have some experience in marketing that gave me ideas on how to help non-profits. And I have a great passion for helping people.
After a year of Council service, I was asked to join the fundraising staff for the organization and of course I said “Yes!” Some things I like, like telling a story well. The rest, I don’t know. I know that if I don’t learn how to ask people for money, my efforts to help people will be limited by my fear of fundraising. So, I jumped in!
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First of all, I was organized. Fundraising involves a lot of work, and I knew I needed a process to make sure all the levers were pulled. Next, I pay attention to why people care about the organization. That seems to be the main question. If I understand why existing donors care enough to keep giving, I can find more donors who will care.
We have several fundraising activities that I need to build on. I tweaked the activity, and the money started pouring in. I realized I was good at fundraising! The chair of the council called me one day and asked me: “What do you do to bring in so much money?”
It feels amazing to bring money. But raising money once is one thing. Collecting money is more and more difficult. There are many strategies to try, but every time I try something new, I have to figure out all the details and go through all the steps.
It took me a while to realize my initial instinct was there. My most valuable asset is my donor base. I consider his experience as a donor. I keep in close communication with the donors. This was the key to my early success.
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I hate watching people struggle with fundraising, because it’s just unnecessary. While there are many tasks on the checklist, the underlying principle is simple and unchanging: your donor value. It can be tempting to treat donors like ATMs. Do this, and you will be lost. Treat people like the valuable asset they are, and they will stay with you and keep giving. He will also bring others into the fold.
My first step was to find a grant opportunity! Grants can be a great source of income, but not for new nonprofits. Most foundations want you to have a three-year program with data that shows your approach is successful, before they invest in you. Even if you have three years of solid program success, it is unlikely that you will be able to fully fund your organization through grants. Most foundations will not fund your program every year. They will move to other organizations. Although there are thousands of foundations that give money, only a few will be a good fit for your organization. Foundations often limit how money can be used. Some do not allow money to be used for facilities and utilities. Others will not allow funds to be spent on salaries. In most cases, grants become a source of funding after you establish a program. And the grant will be one stream of funds for your organization.
I will be holding a fundraising event to fund my non-profit! Fundraising events are the most visible form of fundraising, but offer the lowest return on investment. It takes a lot of time, energy, and money to put on an event, so the money the event pulls in is often wasted. A well-timed and well-run signature fundraising event can generate a lot of publicity and funds, but many small events are not the way to fund a new nonprofit.
I will fund my non-profit with corporate donations! Corporate donations require relationships that take time to grow. Companies are usually not the first stop for new organizations. The best way to get corporate gifts is through connections within the company. Insiders can champion your request and walk the request through internal steps for approval. But there are often strict rules and registration periods that can make it difficult to secure the prize. And the gift from the company will not be renewed next year. Corporate gifts can be a source of revenue, but they are not the solution for new nonprofit startup funds.
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A generous gift from a wealthy person will fund my nonprofit! Instead of targeting people because of their income, approach people because of their values and interests. In some cases, people who are passionate about your organization’s work may be wealthy and able to give large gifts. But in many cases, the people who are most happy to work with you to better people’s lives will be the simpler way.
Crowdfunding seems like an easy way to raise money! Crowdfunding is not a build-it-and-people-will-come model. It’s best if you already have a loyal following, which makes it unsuitable for new nonprofits. Some potential donors are skeptical about crowdfunding platforms and don’t want to share their credit card information. Others don’t like the fees charged by crowdfunding platforms. Like many strategies, crowdfunding is best thought of as one of many revenue streams. It’s best if you have a specific need that captures people’s hearts.
I’ll pay for it all myself until someone else sees the great work I’m doing! Trying to fund your nonprofit will leave you feeling overwhelmed and alone at work. Nonprofits need supporters to grow and develop. Non-profit organizations need a team of people who care deeply about their work together and work towards a goal. This is how nonprofits gain momentum. A non-profit cannot be a sole proprietorship.
If only I could find an angel donor to fund all my great work! Angel donors depend on funding. If you only depend on one person, your organization will collapse if that person leaves. The way to build a sustainable organization is to involve a network of people committed to the work. Relying on one person to write a big check every year puts your organization at risk. You need reliable financing.
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