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In Search of Sustainable Funding
Is Diversity of Sources Really the Answer? |
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William Foster, Ben Dixon, and Matt Hochstetler
Beyond high-level, broad-strokes data, there’s not a lot of information available about trends or patterns in funding for nonprofit organizations. As a result, philanthropists and nonprofit leaders have little choice but to make assumptions about funding, such as “having a variety of sources makes for a healthier organization.” A preliminary study of a small number of youth-services and environmental-advocacy organizations suggests this assumption may be true to some extent but incomplete.
The study identified a distinct pattern—a “U-shaped curve”—characterized by fewer funding sources at the smallest and largest ends of the spectrum, with a greater mix of funding sources for mid-sized organizations. More generally, it found clear differences in the typical funding mix of organizations depending on their size. Patterns such as these could provide important guideposts for nonprofits that want to build robust economic models.
To access the full Nonprofit Quarterly article from the website, please click here.
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