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Funding: Patterns and Guideposts in the Nonprofit Sector |
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William Foster, Ben Dixon, and Matt Hochstetler
In 2003, the Bridgespan Group researched the sources of funding for two small groups of nonprofits engaged in youth services and environmental advocacy. We also studied the funding for the largest nonprofits across a variety of fields. Our observations raise some important questions about funding patterns and fund development strategies.
- There appear to be marked differences in the typical funding mix of organizations of different sizes. Do different economic models support different sized organizations? Is there an organizational learning curve at work?
- For larger organizations, field appears to influence the dominant funding type (e.g. larger environmental advocacy groups are supported primarily by individuals and larger youth service organizations are supported primarily by government). However, the very largest organizations in those fields are supported by individuals. How are scalability and individual donor base related?
- Foundation contributions appear to decline as a percentage of total funding in larger organizations, and are not the dominant source of funds for large organizations. At the same time, the absolute amount of foundation funding for large organizations is still considerable. Should foundation leaders think differently about investments in capacity building versus program specific resources for nonprofits of different sizes?
To download a Nonprofit Quarterly article based on this research—“In Search of Sustainable Funding: Is Diversity of Sources Really the Answer?”—from that publication’s website, please click here.
What do you think? We invite you to submit comments on what you have read. Please direct your feedback to feedback@bridgespan.org.
Strategies for Social Impact, the knowledge letter created from Bridgespan's consulting work, shares insights from client engagements, and is offered free of charge.
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