Charitable donations are an essential part of most nonprofit’s budgets and allow an organization to carry out services and its mission. It is critical that nonprofits have a wide variety of funding sources in order to be sustainable over the long term. The following resources can help organizations prepare for fundraising and learn about a variety of funding sources in Minnesota.
Fundraising Planning, Principles, & Practices
For many nonprofit organizations, fundraising is an essential function of ensuring adequate resources are secured to achieve their charitable missions. Fundraisers build and steward relationships with key stakeholders and represent the work of the nonprofit organization to the community. Careful attention to best practices, ethics, and thoughtful planning are crucial aspects of effective and ethical work.
MCN’s The Principles and Practices for Nonprofit Excellence is a comprehensive overview of accountability principles and management practices based on the values of quality and responsibility that distinguish the nonprofit sector from government and business. Principles and Practices identifies 3 principles and 16 practices with regard to nonprofit fundraising, including:
- Policies
- Accountability to Donors
- Communication with Donors
Foundations and Grantwriting
A nonprofit foundation is an organization that supports charitable acts for the good of the nonprofit sector and the constituencies nonprofits serve. Foundations grant nonprofit organizations funding for general or operating support, or for program development or project support.
There are three basic types of foundations: community, corporate and private foundations. Some foundations will grant funding to a broad range of missions and causes, while others may be more limited to specific nonprofit missions or organizations located in a specific geographic location.
There are three main ways that foundations focus their grantmaking: geography, activity area, and constituency served.
In Minnesota, there are approximately 1,500 active foundations and corporate giving programs that provide grantseekers with a wide variety of funding interests from which to apply. Grantseekers are responsible for developing a persuasive proposal that can not only stand up to questions and scrutiny but effectively fits the interests and guidelines of the funder to which it is sent.
Three Types of Foundations Explained
Individual Giving
Individual donors are a strong funding source for Minnesota nonprofits, accounting for more than 70 percent of total contributions. Individual donor appeals should always be conducted according to the highest ethical standards and clear policies should be adopted to ensure transparent communication with donors and financial responsibility. Nonprofit fundraisers and seekers must always remember that individual giving relies on building strong and successful relationships with donors.
Annual Donations and Major Gifts
Types of Funding and Campaigns
Tips for Communicating with Donors
Government Funding
While it is true that applying for government funding, especially federal funds, has always been highly competitive and more time intensive than a foundation grant, the payoff can be great. Government grants, particularly those from the federal government, are usually very large. Once an organization has identified a particular department within the federal government, built relationships with the staff and successfully received funding, it is likely that more funding will follow unless it is specifically one-time money.
Finding State Grant Opportunities
Additional Funding Sources
Program-Related Investments (The Basics)