When you start a non-profit, your vision is NOT to beg people for money. Your vision centers on a personal encounter with real people in your community who need help. So, you help people! Others join in. And the programs grow.
Eventually, your expenses outpace your income. Or you are hit with an unemployment claim from a former employee. Or a natural disaster triples your caseload in a matter of days. Like many small businesses on the brink of the next level – you need cash!
And often at that moment of poverty, someone on your board might say, “We need to hire a grant writer, so we can raise $60,000 by next month!”
Grants are only one kind of income opportunity for non-profits. The strength of grants is that they can often provide significant startup costs for a new program, or even underwrite the administrative costs of a growing non-profit. But the weakness is that most foundations shy away from providing continuous grant income.
Winning a grant is NOT like winning the lottery. It is more like a bank making an investment in a small business that has proven itself worthy. Funders want to see others invest in your non-profit, too. Also, most grants are for specific programs or equipment, meaning the income is restricted…and usually given according to the foundation’s timeline, not yours. And that can be pretty tough when cashflow is tight.
Here is a list of income streams for non-profits to consider in addition to grants:
Fees for Services
Many non-profits find that clients prefer a hand-up over a handout. They are glad to contribute in some way to receive the services you provide. A sliding scale allows a reasonable fee to help cover the costs of many health services. Or, insurance or Medicaid may pay for a portion of the cost. And those few dollars per client may well add up to thousands over the course of the year.
Some non-profits have contracts with the government to provide services as well. Many of these contracts are awarded using a bidding process that is akin to a grant application. Landing even one contract can provide reliable income for your non-profit…sometimes for many years in a row. Consult grants.gov for more information.
The vast majority of donations to non-profits are from individual donors. If you have never done an annual appeal, or even an email appeal, start with your board, and let them help you grow your list of donors. Or, you may have some amazing volunteers, all of whom are much more likely to give if they volunteer. You just have to ask! (And ask more than once a year!)
Most board members donate but if some cannot, you can also encourage them to solicit corporate or individual donors. While we all dream of large gifts, keep in mind that such gifts require, on average, about 18 months of dedicated cultivation. You’ll need to help people learn more about your programs. Offer to set up site visits for your most engaged donors—including your board! Once they see your programs in person, they may write another check!
Some families establish small foundations or a fund at a community foundation to help them develop a fair and efficient means to sift through the many requests they receive. There may be an application or site visit process. Often, these kinds of grants are found by “word of mouth.” So, teach your board to share your mission ALL the time and to pay attention to friends who give.
Giving back to the community is a great marketing strategy, and most non-profits can count on a few “Christmas bonuses” as well as organized giving from campaigns like United Way. Many times, these businesses will rely on employees to help them decide where to invest. So, be sure to cultivate those relationships among your clients and employees, not to mention your board.
Many national businesses have online grant portals for their corporate marketing efforts. Some of these applications are very detailed and time-sensitive, and others are funded on a rolling basis year-round. Also, some may only fund tangible items. But the application process might be easier than you think – and funding may also be quite prompt.
Pancake breakfasts, 5K running events, and gala auctions with speakers are but a memory today. Events are still a terrific means of jumpstarting unrestricted income and engaging volunteers. In our post-pandemic world, many special events and auctions are moving online, which requires some technological assistance. And the individual and corporate sponsorships may also have to be re-imagined along with the ways you solicit their help. This is a great time to try new ideas, especially if your events needed a reboot anyway.
Asking more often is not a bad thing. But don’t expect it to be easier than an in-person event. Asking for donations of any kind is still centered on one important factor: a positive relationship with the donor. They need to receive regular updates on your amazing programs, and a stream of gratitude including well-placed personal phone calls by board or staff members. People give money to people who are doing great things.
We believe in your mission! At Upstream Consulting, we want to help you keep investing in your community! Strong non-profits with a plan win more grants AND raise more money to serve their clients. Contact us to see how we can help!