Were you aware that nonprofit financing is as simple as reaching out to various sources?
Nonprofit finance is something that many struggle with, especially small organizations. While many nonprofits start strong, the smaller ones often run out of funds after exhausting their initial source.
This can discourage people from starting nonprofits, but fret not. Fortunately, there are no nonprofit rules of finance. Here at The Charity CFO, we can provide all the info you need to get through nonprofit finance challenges as quickly as possible.
Read on to learn about 7 nonprofit finance solutions to consider!
1. Institutional Donations
When facing nonprofit finance challenges, one of the quickest ways to get funds is to encourage institutional donations. This is a common route that nonprofit organizations take as it involves getting funds from organizations.
Institutional donations are often given by those that believe in the cause of a nonprofit. Some of the most popular are the likes of the Ford Foundation and the Gates Foundation.
No matter which organization provides your nonprofit funds, you can expect them to work alongside you throughout many processes. Whether you need help setting up an event or would like to start a fundraiser, the organization will provide everything they can to ensure things go smoothly.
2. Private Donations
Private donations are similar to institutional donations, but they come from individuals. However, large organizations can also be considered private donors.
Learning how to manage finances as a nonprofit often starts with receiving private donations from those in your local community. Anyone that participates in your nonprofit can donate and help with things like an organization would.
As your nonprofit grows, you’ll likely receive private donations from more people in other areas. While you’ll often receive smaller donations, you’ll get a plethora of them to help you sustain the nonprofit.
The more donations you get from private donations, the harder it can be to handle taxes. However, you can check out our services to prepare for taxes so that you can continue receiving donations without any problems.
3. Government Grants
One of the top financial challenges of nonprofits is trying to sustain themselves even after receiving donations. When this happens, it’s best to reach out to the government for assistance.
Many governments offer a variety of grants to nonprofits if they comply with a set of guidelines. If you visit the US government’s website for grants, you can learn more about which grants your nonprofit may be eligible for.
4. Internal Contributions
After getting donations and grants, the next thing you can do is start asking for internal contributions. These contributions come from the board members that are responsible for decision-making in the nonprofit.
Internal contributions are often asked when a nonprofit has exhausted its main resources and is left with few options. However, they’re usually not necessary if you seek other financial solutions.
When seeking internal contributions, it’s best to continue seeking funds from other sources. The more money you can get, the easier it’ll be to manage everything in the long run while avoiding internal contributions.
5. Advertising Campaigns
Many people have the misconception that advertising costs money. While it typically does, you can launch advertising campaigns to raise funds that don’t cost much.
Some of the most cost-effective ways to advertise can be done with posters, billboards, and clothing. All you must do is create a budget and decide how much you’d like to invest in each.
Social media is another great way to advertise as over 4.33 billion people actively use it.
What makes social media cost-effective are the tools that the platforms provide. When using sites like Facebook or Twitter, you can choose who you want to see the ads with filters for age range, gender, location, and more.
Similar to launching ad campaigns, you can get sponsorships from other businesses to help your business raise funds. In many cases, sponsors will pay for advertisements, events, and more things that help you gain visibility.
When it comes to nonprofit finances, it’s best to get as many sponsorships as possible because they’re stable revenue streams. The only thing your nonprofit will need to do is include their branding whenever you host events or launch ads.
Acquiring sponsorship deals can be done by reaching out directly to businesses or having them come to you. If you have a smaller nonprofit, you should contact local companies to help you. As your organization grows, you’ll attract the attention of larger companies.
The last thing you can do to overcome the top financial challenges of nonprofits is host events. The best part about doing so is that the type of nonprofit you have doesn’t matter.
You can do things like host movie nights, races, parties, and more while charging people to enter. This provides value to those that are contributing so your nonprofit will have a better chance of raising funds.
The larger your nonprofit is, the larger events you can host. However, you shouldn’t have a problem coming up with ideas if your nonprofit is small. You’ll just need to focus on your local community.
Start Using These Nonprofit Finance Solutions Now
After reading this article, you now know about several finance solutions that can immediately help you turn things around. We encourage you to start by thinking about events you can host to give back to the community. While doing this, you can ask for donations from institutions and private donors to help fund things.
Keep in mind that it’s best to acquire funds from multiple sources, so don’t rely on one source to keep your nonprofit afloat.
Request a meeting with us today to learn about how we can help you overcome nonprofit finance challenges!