Understanding Nonprofit Funding Sources

LDG Accounting Services • August 12, 2025
Understanding Nonprofit Funding Sources

Nonprofits Rely on a Variety of Funding Sources

Each type of funding comes with specific advantages and limitations. It is important to diversify your funding sources to improve financial health and flexibility.

Common Funding Sources Include The Following:

Grants

Source: Government, foundations, corporations; Use: Often restricted; Notes: Large sums; competitive, requires reporting

Individual Donations

Source: Public donors; Use: Restricted or unrestricted; Notes: Flexible; builds community; needs outreach

Corporate Sponsorships

Source: Businesses; Use: Tied to branding/events; Notes: Good visibility; may come with strings

Earned Income

Source: Product/service sales; Use: Unrestricted; Notes: Sustainable; requires business model

Fundraising Events

Source: Tickets, raffles, auctions; Use: Unrestricted; Notes: Engaging; resource-intensive

Endowments & Investments

Source: Investment income; Use: Often restricted; Notes: Predictable; requires significant capital

Funding Types Comparison:

We Help Nonprofits Maximize Their Funding

We help to put nonprofits in a position to succeed. At LDG, we are highly experienced and understand the ins and outs of nonprofit bookkeeping and accounting. Feel free contact us today to discuss how our team can help your nonprofit maximize its positive impact in the community.

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