Here's how you can diversify funding sources in the nonprofit sector.

Don't Put All Your Eggs in One Basket: Diversifying Nonprofit Funding Donations are vital, but relying on a single source is risky. Here's how to diversify: Grants: Research & apply for grants aligned with your mission. Individual Giving: Expand your donor base through targeted campaigns & recurring options. Corporate Partnerships: Build relationships with companies for sponsorships, cause marketing or employee giving. Membership Programs:Create tiered membership structures with benefits to foster community & recurring support. Social Enterprises:Consider launching a business venture with a social mission to generate revenue for your nonprofit. Event Fundraising: Organize engaging events(virtual/in-person)tailored to your target audience.

I've found that it can be helpful to break down the different kinds of grants that exist, and then set application goals within each sub-category. For example, this can include neighborhood/council, city, state, and national funding, private foundations, and donor advised funds. If you're finding that you're already receiving a large amount from one of these income streams, it can help to build up giving from another direction. This way if, for example, there is an economic downturn that leads to government funding shrinking, you may still maintain funding from donor advised funds.

Individual donors are the lifeblood of many nonprofits. To diversify funding, nurture relationships with a variety of donors, from small givers to major philanthropists. Personalize your outreach with heartfelt messages and host engaging events that showcase your mission. Use storytelling to connect emotionally, sharing real-life impacts of their contributions. Remember, donor engagement is an ongoing process; consistently build trust by updating donors on your progress and demonstrating how their support makes a difference. Show appreciation regularly, making each donor feel valued and integral to your cause.

Earned income can be a double-edged sword. It can be a reliable and sustainable part of your annual revenue. However, if it grows too large, donors may be skeptical of how much your organization “needs” their donations and may cause mission-creep if it is not closely aligned to the work your organization does. Consider the intersection of what your organization does well, has existing infrastructure to do, and what someone would pay for when creating an earned income program (ex. humane society offers pet boarding for a fee).

Diversifying your nonprofit's revenue starts under the waterline of the iceberg with establishing an honest needs-based budget. Too often revenue models stay stagnant (or less-diverse) because the income portion of the budget plans for it to be so. Creating a true, needs-based budget demands fund diversifcation and more gen-ops dollars. Only until you do this can your development team actually plan to reach/exceed goal and diversify funding. Lastly, fund diversification is often hindered because the development team hasn't had proper relational fundraising training....they're on the spin cycle of grants, appeals, and events because that's what they know. Teach them to have investment-level conversations you'll diversify your revenue model.