The most important thing you need when running a business is capital. When the business you’re running is a nonprofit, it can make acquiring the capital you need even more difficult. Nonprofit owners often assume that typical business finance sources are out of their league. After all, many investors shy away from nonprofits due to a fear of not receiving enough return on their investment. For entrepreneurs interested in the nonprofit sector, this can make running a nonprofit seem daunting. However, there are many methods that one can use in order to both get funding and attract more donors.
Don’t be Afraid to Network
Networking might be the most useful tool in the nonprofit’s arsenal. It allows you to find investors, build a reputation, and engage in the communities you wish to help. However, it can also allow you find allies that can help you better achieve your goals. These allies are other nonprofits with goals similar to yours. By working together with other more established nonprofits you can increase you reputation, get information on where to apply for grants, and discern which donors are most sympathetic to your cause.
Explain Social Importance
If you cannot attract investors with profits, show them how your business will benefit the community you are trying to help. You can do so through implementing mall advertising strategies in your local mall. Draw investors toward your ads and provide them with positive analytics. Look for investors in your local area, or who have a personal interest in your nonprofit’s cause. This will increase the likelihood that they will benefit from your business and make them more willing to invest in your nonprofit. These investors can be used to acquire the initial starter capital you need to start your nonprofit. However, it is important to think for the long term. If your business practices are clear and your impact is strong enough, your investor may choose to become a major donor and repeatedly invest in your nonprofit.
Be Ethical And Transparent
What is considered ethical for nonprofits can be unclear. Attempt to make your financials as transparent as possible, and follow government guidelines of what information you must release to the public. This builds your investors confidence in you and ensures that they are more likely to repeat their investment. Once you have your investors’ confidence do not pester your investors or donors for more funding. However, be sure to acknowledge their patronage with small gifts as a thank you and to remind them of your company. Finally, your company should under no circumstances accept funding with specific conditions attached to it, even if you do not believe that it will affect your business’s mission.
Apply For Grants
It can be difficult for newer nonprofits to secure government grants. Most government grants tend to go to nonprofits that the government has already done business with in the past, and therefore trust. However, there are certain ways you can structure your business in order to make it more likely that your application for a federal grant will be approved. In general, the government tends to favors organizations that are more bureaucratic. They prefer nonprofits that agree with their ideas regarding control and power. If you share similar political affiliations to an administration in power and you can build a tolerance for red tape, government grants can be a good source of funds. Hence, they are a great option to get funding for a nonprofit.
Make A Profit
A nonprofit can make money off of related business ventures and use those profits to help fund itself. However, a nonprofit must be careful that the business actions they preform in order to profit do not become the business’s primary focus. You must ensure that these profits are infrequent enough that you do not lose your nonprofit status. More importantly, you do want not lose sight of your nonprofit’s mission. Instead, you want to confidently speak in public about your mission while simultaneously profiting off of related business opportunities.
In short, the numerous ways a nonprofit can attract repeat or new investors or donors can be best broken down into five general rules. Network with other nonprofits with similar goals in order to find the best places to acquire grants or investments. Show your investors how investing in you will help them and their communities. Be as ethical as possible. Make your business as attractive as possible for government grants, and see if you can make a profit to sustain yourself on. Following these suggestions will go a long way to ensuring that your nonprofit can continue to operate and make the social impact you desire.