Revenue streams for nonprofit foundations

All nonprofits rely on a mix of sources for their income, and funding can come from individuals, foundations, corporations or local and federal government. Some nonprofits charge a fee for certain kinds of services, and some sell goods or services to generate revenue. It’s important to diversify your revenue stream and have a healthy mix of funding sources for your organization. Here are the most common types of revenue streams for nonprofits. Individual Donors. Of all donations made to nonprofits, 71 percent come from individuals.1 Your individual contributors will include a mix of high-level donors (major donors), and mid- to low-level donors (regular donors). Individual donors can make one-time or recurring donations. They might give to your organization through events (including event tickets as well as additional fundraising activities at the events, such as raffles and auctions), annual appeals or planned giving (leaving money to a nonprofit organization in a will). Some individuals or families also have family foundations that can help them make gifts to charities. Identifying and Cultivating Major Donors. For nonprofits, 88 percent of total dollars raised comes from just 12 percent of donors,2 so focusing efforts on major donors is important. While major donors won’t give as frequently as smaller-level donors, the gifts they give will be significantly larger; therefore, nonprofits should have a strategy in place to continually cultivate major donors. The level at which a donation is considered “major” varies from one organization to another. Take a look at your organization’s history of giving and identify the largest gifts to determine what would be considered a major gift. Large organizations might consider major gifts to be six-figure gifts and above, while small organizations might consider a gift of a few thousand dollars to be a major gift. Major gift prospects need to be connected to your organization’s mission, and they need to have both the inclination and the capacity to give large gifts. Starting with your largest donors, most frequent donors and board members is a great way to start cultivating major gift donors

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