Exploring How to Make Money with a Nonprofit

Passionate about creating positive social change? Turn that passion into a sustainable venture! In this article, we'll explore the potential for nonprofit organizations to generate income, leverage a range of funding sources, and organize a loyal community of fundraising supporters and donors.

Contrary to common misconceptions, nonprofits can indeed generate revenue via a wide range of resources, including crowdfunding, government grants, individual donors, endowments, online donations, the support of corporations, and more. So whether you're advocating for environmentalism, wildlife conservation, medical research, human rights, or any other mission, let's dig through some innovative ideas to help you fundraise for your cause!

What Does It Mean To Be a Nonprofit Business?

A nonprofit organization is fundamentally a business entity committed to serving a particular cause or community - prioritizing social, health, or environmental impact over financial gain. In contrast to for-profit organizations, a nonprofits' primary focus is addressing needs and creating positive change; nonprofit fundraising is done to support the charity's goals.

Nonprofits enjoy tax exempt status; donors can often claim tax deductions for their contributions. This legal structure requires organizations to reinvest all funds into the cause rather than distributing profits to individuals.

How Do Nonprofits Make Money?

Nonprofit organizations utilize various fundraising avenues and funding sources to generate income, including:

Grants

There are a number of different ways a charity can apply for grants. Government agencies may provide financial support for projects aligned with public interest. Foundations and philanthropic organizations may also offer grants for specific initiatives. And private or public foundations may have funds earmarked for supporting appropriate causes. A grant writer can help you determine the best way to pursue grants for your nonprofit funding.

Special Events

Special events can gather a large number of donors together to fundraise in the name of a cause, for instance organizing and selling tickets to a popular event to raise money, with the ticket proceeds going to the charity. The event itself might also feature other opportunities to make money for the cause, such as a silent auction, donation bins, or fun merchandise items that donors can purchase.

Product Sales

Speaking of purchasable items, nonprofits can sell merchandise or services related to their cause for fundraising purposes, with profits going to the charity. This merch can basically be anything that the charity feels will represent them well, and will encourage supporters and donors to buy it.

Earned Incomes

Generating fundraising revenue through activities like workshops, consulting, or educational programs; for instance, a nature conservation program might offer paid nonprofit funding workshops on plant identification or gardening, with the proceeds going to the cause.

Individual and Corporate Donations

Nonprofits can solicit fundraising support from individuals and businesses who are passionate about giving money to a shared cause. Nonprofit fundraising support can be requested via a number of avenues, including social media, text messaging, email, and direct (print) mail. One of the best ways to encourage online donations is to include a fundraising donation form on your website.

Sponsorships and Partnerships

This category basically means that the charity is collaborating with businesses to fundraise for financial support. Corporations, in particular, often partner with charitable projects to boost their social responsibility or improve their philanthropic image through nonprofit funding.

Can Nonprofit Founders and Employees Make Money?

Yes, the nonprofit founder and staff members can receive a reasonable compensation for their work. Taking care of salaries and providing additional benefits within reason is a common practice within the nonprofit sector to attract and retain talented individuals who will work to advance the charity's mission goals; the staff helps keep a nonprofit's day-to-day operations running smoothly, therefore paying them is an allowable administrative expense.

6 Big Ideas to Make Money With a Nonprofit 

Peer-to-Peer Fundraising Campaigns

Peer-to-peer nonprofit fundraising involves recruiting supporters to fundraise on your behalf, leveraging their networks for a wider reach. Ideally, your supporters would reach out on their own to family members and friends, building on their established relationships to increase your charity's appeal, as people are more likely to become donors when the request comes from a person they know. Peer-to-peer fundraising events can include simple asks, or more in-depth nonprofit funding activities like sports tournaments (charity baseball, fun runs), workout challenges, supply drives, or viral challenges, like the legendary ALS Ice Bucket Challenge from 2014. 

Corporate Sponsorships

Build partnerships and corporate sponsorships with businesses that align with your cause, offering them visibility in return. There are a variety of types of corporate sponsorships, from matching gifts to in-kind gifts (when companies give product donations rather than money), event sponsorships, or direct philanthropic no-strings-attached charitable donations.

Events and Crowdfunding

Host virtual, recreational, and IRL (in real life) events bringing groups of people together to raise funds, welcome new donors, and increase community engagement. These can include auctions and art shows; galas, dances, talent shows, and dinners; "nights on the town"; house parties; car shows; holiday-themed events; or fashion shows with supporter volunteers as models. Crowdfunding is a similar prospect: crowdfunding means that many donors make smaller charitable donations, and all of them together add up to a big financial impact for the charity. You can leverage online platforms to run targeted campaigns for specific crowdfunding projects or goals, and use social media tools like photo posts and videos to hype up interest in supporting your cause.

Passive Income Streams

Consider affiliate marketing possibilities that align with your organization's values as another funding source. If there are advertisers that complement what your charity is working toward, it could be to your nonprofit organization's benefit to set up affiliate marketing links to make money, generating passive income for the charity. For instance, a charity supporting community gardens might find it appropriate to have the revenue from affiliate links to an heirloom seeds website as another means of nonprofit funding. Having a form on your website can also encourage online donations on an ongoing basis.

Product and Service Sales

Create and sell merchandise or services related to your cause to generate revenue. These funding sources can be as simple as physical products like branded t-shirts and sweatshirts, mugs, stickers, flags, or digital products like e-books that are related to your cause. You can sell these IRL, at fundraising events, or on a dedicated website hosted on a platform like Fourthwall, where you can easily get started customizing your charity merch with images, slogans, and more on a wide range of appealing products. You could also set up charity merch booths at places like farmer's markets, craft fairs, book sales, or as part of related special charity events. 

Incentivize Memberships

Membership or subscription programs with exclusive benefits can be another way to raise money, this time in the form of recurring support. This is especially effective if your charity can offer specific membership benefits to donors for a monthly pledge, even something like a welcome kit, exclusive branded sweatshirt only available to members, or access to exclusive media. Make membership subscriptions easy by headquartering your charity shop on Fourthwall, where you can reward your nonprofit’s supporters with perks and exclusive content.

How To Maintain Your Nonprofit Status

Maintaining 501(c)(3) status is crucial for nonprofit organizations. Here are 6 steps to help with compliance:

Establish a Board

Nonprofits should elect officers and appoint a board of directors, with board members attending regular meetings to make sure the nonprofit is functioning in the way intended. The board may also vote on important issues related to the organization, acting in the charity's best interests.

Have and State a Purpose

A nonprofit should have a clearly stated goal, scope, and fundraising purpose, and should adhere to the same; for instance, if your charity's purpose is to raise money to help bring clean and safe water to a community, your charity organization cannot suddenly pivot to supporting a medical cause.

File Taxes

File the correct forms to provide the IRS with financial information. 501(c)(3) nonprofit organizations are required to pay state and federal taxes as outlined. You may want assistance with this to make sure you're fulfilling your charity's tax requirements with the IRS.

Correctly Acknowledge Donations

Acknowledge all contributions with written receipts; charity organizations that solicit donations from the public must provide a receipt or other form of written acknowledgement to anyone who donates, so that those donors can apply for a year-end tax deduction.

Ensure Contract Transparency

As all activities of your charity nonprofit organization are intended to benefit public interest, it's important to ensure transparency in contracts and to provide commercially reasonable employee compensation. In many cases, contracts must be presented to and approved by the board of directors.

Avoid Political Campaign Activity

Keep your charity efforts apolitical; nonprofit organizations are forbidden from participating in any activities that endorse or favor candidates for political office, including campaign fundraising or donations.

Maximize Your Impact and Boost Revenue With Fourthwall!

Fourthwall is a revolutionary platform empowering nonprofits to enhance their revenue streams. With Fourthwall, you can sell high-quality merchandise, create and sell branded items, offer memberships, and engage your community through fun campaigns.

Build a loyal fan base, offer personalized thanks, and connect directly with supporters of your nonprofit organization's cause. Try Fourthwall today and witness the positive transformation it can bring to your organization - Fourthwall can help you elevate your nonprofit's impact, raise funds for your charity, and gain financial sustainability.