Sources of Funding

Nonprofits can and do utilize the following sources of income to help them fulfill their missions:

• Fees for goods and/or services
• Individual donations and major gifts
• Bequests
• Corporate contributions
• Foundation grants
• Government grants and contracts
• Interest from investments
• Loans/program-related investments (PRIs)
• Tax revenue
• Membership dues and fees

 

Nonprofits fund their programs with a basket of income streams, such as:

• Charitable Contributions. Although the total income for nonprofits comes from an assortment of sources, of which contributions are but a part, individuals are the largest source of charitable donations for nonprofit organizations. According to Giving USA, total charitable giving in the U.S. reached more than $298.4 billion in 2011. Of that amount 73% came from individuals. The rest of the philanthropic pie is made up of grants from foundations, through bequests, and by way of corporate philanthropy.


• Corporate Philanthropy. Corporate philanthropy has come to be a integral part of the identity of most large corporations and many smaller businesses as well. CSR (Corporate Social Responsibility) has become more important as consumers have become more likely to buy from socially responsible companies.Corporate funding can be a long-term commitment to certain causes and the charities connected to them, or corporate funding can be more episodic and market driven, revolving around particular campaigns, events, and projects. 

• Federal, State and Local Goverments. Many nonprofit institutions benefit from all levels of government. Obvious examples are public education, higher education, and the public media. Federal, state, and local goverment grants fund many programs provided by nonprofits, especially in areas such as urban human service nonprofits, and healthcare. 

• Grantmaking Public Charities. These organizations are a cross between a private foundation and a charity. They typically receive funding from the general public, government and private foundations. They may do public service, but primarily raise funds and provide grants to charitable nonprofits that provide direct service. You can find many such grantmaking public charities in your local area. Some are associated with an overarching national organization (the Junior League is one such example). 

• Foundations come in various sizes and types, but their grants can be important and substantial. They can include:Corporate Foundations are private foundations, but their boards are often made up of corporate officers. Their endowment funds are separate from the corporation and they have their own professional staff. Family Faoundations receive endowments from individuals or families. Many large, iconic foundations are family foundations. 

Funding - loans and grants from the European Union

The EU provides funding in the form of loans and grants for a broad range of projects and programmes covering areas such as education, health, consumer protection, environmental protection and humanitarian aid. Funding is managed according to strict rules which help to ensure that there is tight control over how funds are used and that funds are spent in a transparent and accountable manner. EU funding is complex, since there are many different types of programmes managed by different bodies. Over 76 per cent of the EU budget is managed by the Member States. This includes the structural funds - which finance regional policy, social and training programmes, as well as agriculture (including support for farmers). 

Two main types of funding

• Grants for specific projects, usually following a public announcement known as a 'call for proposals'. Part of the funding comes from the EU, part from other sources.
• Public contracts to buy services, goods or works to ensure the operations of EU institutions or programmes. Contracts are awarded through calls for tenders (public procurement) and cover a range of areas: studies, technical assistance and training; consultancy, conference organisation, IT equipment purchases, etc.As a group, the 28 EU Commissioners have the ultimate political responsibility for ensuring that EU funds are spent properly. But because most EU funding is managed at country level, national governments are responsible for conducting checks and annual audits.

Beneficiaries

• Small businesses - Can obtain EU funding through grants, loans and guarantees. Grants provide direct support, while other funding is available through programmes managed at national level.EU funding opportunities for small businesses

• Non governmental & civil society organisations - May be eligible for funding, provided they are active in EU policy areas on a non profit basis.EU funding opportunities for NGOs by policy area

• Young people - Two main types of funding: 

  1. Lifelong Learning Programme - study opportunities through Erasmus, support for school goers nearing the end of secondary education, and vocational training in another country

  2. Youth in Action Programme - co funding of projects which encourage civic involvement, volunteer work and a broader multicultural outlook. Lifelong Learning Programme - funding for education and training Get involved in the Youth in Action Programme

• Researchers - Over €53 billion has been made available between 2007 and 2013 for research, mainly through the seventh framework programme (FP7). Grants are available in the form of co financing for research related to cooperation, ideas, people, capacities & nuclear research. EU funding opportunities for research & innovation

• Farmers - Most farmers in the EU are eligible to receive direct payments to support their income. Farmers must respect standards related to environmental protection, animal welfare and food safety. Most support is not linked to production. But under certain conditions, EU countries may give less money and instead provide support linked to production. 

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