What Are Nonprofit Sources of Income?

A non-profit organization works for social purposes that are not commercial, there is no element of seeking profit in attracting public attention. In conducting a Nonprofit Executive Search, there are several ways to generate income that can be used by a non-profit organization, including:

  1. Revenue from program activities

A non-profit organization is not recommended to seek income from the activities carried out, because it can show that the organization is operating commercially. Organizational income can be sourced from organizational activities by taking into account several basic things, such as:

  • Revenues are made for the survival of the non-profit organization; we cannot always expect financial support from donors. Therefore, the organization must be able to be independent in managing the activities carried out.
  • Expansion of community services through efforts to contribute through activities carried out by a non-profit organization. Revenue from these activities is expected to be able to reach more community coverage following the target activities.
  • Appreciation for the performance of non-profit organizations; Types of activities carried out by non-profit organizations that involve community participation and provide responsibility for maintenance and operations with funding through the imposition of tariffs that are imposed based on agreement.
  1. Income from donations

Donations represent the organization’s income that is obtained without having to present rewards or products as gifts from donors. Donations can be given regularly or only once made through fundraising activities, for example through philanthropic activities.

The strategy used in raising philanthropic funds is to raise issues through coverage of activities to raise public awareness. Also, it can be through program collaboration.

  1. Income from grants

Grants are given by a non-profit organization to support a particular activity. Giving grants is very specific starting from the donor organization, type of activity, implementation to the context of the activities carried out. Such as making proposals, details of activities, and details of funds needed. So that the pure grant fund as a donor is not implementing an activity because it is given according to the proposal submitted. Usually, the amount of funds provided is greater than the type of donation.

  1. Income from interest and other investment returns

Represents income derived from organizational assets that depend on the amount of investment value. Non-profit organizations are not allowed to make investments with high risk because the funds invested must increase in amount. So that non-profit organizations must be more careful in calculating the risks and benefits of investing.

  1. Income from membership fees

A non-profit community with several members usually requires members to make contributions. The amount of contribution is adjusted by mutual agreement or can also be voluntary. The difficulty with membership fee-based income is that of its members, individual contributions are difficult to collect compared to professional or corporate membership.

  1. Revenue from commercial businesses

Direct income can be obtained by a non-profit organization through commercial ventures by forming a special unit in handling ownership of commercial business entities. Commercial activities can run without the involvement of non-profit organizations in daily operations. This separation is important to avoid confusion about the use of a non-profit organization’s resources.

By knowing the revenue sources of this non-profit organization, we can learn and evaluate the amount of income of the non-profit organization that we manage. And see opportunities to get income from other sources, so that they can support the sustainability of the organization and run a better program of activities.