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As potential grant seekers, some types of charitable (or nonprofit) organizations in the United States of America are more likely than other types to need to compete head-on against their peers for public and private grants.

 

This post explores nonprofits’ revenue development strategies and their varied mixes of funding sources. Later posts will explore their funding mixes further, as well as their options for seeking grants.

 

Different Sources, Different Impacts:

Different types of charitable organizations depend to varying degrees on different types of revenue sources. Those that focus on arts, culture, and humanities, environment, and animals rely most heavily upon private contributions. Such charities are more susceptible than others to economic turmoil that contributes to fluctuations in individual giving.

 

Compared to other types of charitable organizations, educational institutions rely more upon investment income. Their revenues are susceptible to volatility in financial markets that impacts their investment income. As recent economic history has demonstrated, market downturns affect those investments directly and adversely.

 

Charities that derive much of their revenue from private payments (e.g., fees for services) — such as health care and education institutions — are less likely than others to suffer revenue losses when external factors cause changes to the level of private contributions (donations).

 

Funding Mixes:

In An Overview of the Nonprofit and Charitable Sector (2009), the Congressional Research Service (CRS) reports that for arts, culture, and humanities organizations, the revenue source mix is 12% government grants and payments, 29% private payments (fees), 9% investment income, 43% private contributions (donations), and 7% other revenue. See table ad infra.

 

For education organizations, the mix is 12% government grants and payments, 56% private payments (fees), 17% investment income, 13% private contributions (donations), and 2% other revenue.

 

The revenue source mix for environment and animals organizations is 12% government grants and payments, 24% private payments (fees), 7% investment income, 48% private contributions (donations), and 9% other revenue.

 

For healthcare organizations the mix is 37% government grants and payments, 56% private payments (fees), 3% investment income, 2% private contributions (donations), and 2% other revenue.

 

Finally, for human services organizations, the mix is 36% government grants and payments, 41% private payments (fees), 3% investment income, 16% private contributions (donations), and 4% other revenue.

 

Type of Organization Source of Revenue
  Gov’t Grants Fees Investments Donations Other
Arts, Culture, Humanities 12% 29% 9% 43% 7%
Education 12% 56% 17% 13% 2%
Environment and Animals 12% 24% 7% 48% 9%
Healthcare 37% 56% 3% 2% 2%
Human Services 36% 41% 3% 16% 4%

 

Later posts will explore nonprofits’ funding mixes and their consequences, as well as their options for obtaining grants from private grant makers.

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  1. […] Knowing the Competition: Nonprofits’ Revenue Sources (grantresults.wordpress.com) […]

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