Traditionally, nonprofit organizations have focused their annual budgets and fundraising on programs and necessary operating expenses. Few have budgeted set amounts for future major capital expenses or to replace depreciated assets. When it came time for a major capital expense, especially a new building, nonprofits would often seek major grants from foundations. In the past, foundations generally served as the main source of capitalization in the nonprofit sector. Since the 2008 recession, however, more and more foundations have shifted their grants towards funding operating expenses, new program initiatives and organizational sustainability.
Using these three tactics will allow nonprofit leaders to concentrate more on strategic and proactive decision making, rather than having to manage the latest budget shortfall.
Unlike most businesses or governmental agencies, nonprofit organizations have no standard way of financing themselves. Indeed, the variation in nonprofit financing patterns is enormous… So it is not surprising that nonprofit executives commonly ask: What is the best income mix for my organization?