Create a Diverse Funding Plan for Your Nonprofit

The key to creating a self-sustaining organization is to design a diverse funding strategy with various revenue streams, says Adam Fuller from,

One trap that many organizations fall into is depending on a single funding source. Some organizations rely completely on state and federal funding or huge private foundation grants, while others are struggling to budget small individual contributions.

If you or your Executive Director have been caught saying any of the following, it may be time to diversify your fundraising strategy.

“I need $<insert amount here> by the end of this week (or quarter).” Usually followed by, “Can you get me that?”
“I need a home run.” or “I can’t use small donations.”
“We are robbing Peter to pay Paul!”
“If you can raise us $<insert amount here> we can afford to pay you!”

The key to creating a self-sustaining organization is to design a diverse funding strategy with various revenue streams. The following are should be considered when developing a diverse funding plan.

State and Federal Funding: Many organizations rely on state and federal funding, but not without tons of red tape. State and Federal grants are complicated, often contradicting, and require extensive followup reporting and compliance. Another downfall to this source of funding is that it can be cut without very much notice. However, State and Federal Grants are secure, and the amounts can be significantly higher than any other source of funding.

Private, Public, and Corporate Grant Foundations: Grant funding is the ‘home run’ that you speak of. Grants are usually large. However, the grant approval process is lengthy, and funds are almost always restricted.

Individual Donations: Because individual donations are typically small in nature, the cost to manage them is sometimes considered pointless. However, for most organizations these small contributions contribute to the biggest potential in funding. This is because they are more efficiently request, received, and processed. Furthermore, this type of funding is often unrestricted. Finally, individuals often give on a recurring basis longer that grant foundations.

Annual Campaign: This type of fundraising is typically supported by individuals donors and includes an annual appeal for fundraising. A good funding plan will include a year-long theme to the annual appeal.

Passive Revenue Streams: Often companies will offer a percentage of proceeds to an organization. Partnering with companies in this way will generate a small but often steady source of passive income for your organization.

Fundraisers: The challenge with fundraisers is to spend less than you make. Because of the time and financial investment of a fundraiser, many organizations spin this wheel for a small return. However, by developing a strategic plan, including sponsor support, a fundraiser can bring in money and offer a platform for branding and marketing.

Remember, strategy is essential to developing a diverse funding plan. Lack of strategy often results in the perpetual act of playing catch-up. Alternatively, implementing solid strategy leads to controlled growth and self-sustainability.