It is important for non profit organizations, both those just starting out and those which are well established, to have a diversified stream of income. By diversifying where your revenue is coming from, your non profit organization will be less dependent on each revenue source. The more diverse your organization is the better it will be able to withstand changes in funding.

Grants, for example, are a great way for non profit organizations to generate the revenue which they need to operate. However, if an organization is relying too heavily on grants and their grant funding gets pulled or reduced, the organization may struggle trying to make up for that loss of funding in other ways. It is better to be prepared by having additional fundraising initiatives and soliciting donations in addition to applying for grants.

The need for multiple sources of funding has become even more important with the recent decline in the American economy. As bank accounts continue to shrink, individuals, organizations and foundations are becoming more selective over which organizations they are making contributions to. This is creating more competition between organizations for the resources available. The organizations which are best equipped to deal with this competition are those that are the most diverse in their revenue sources and the least reliant on one single source.

Organizations should look at fundraising efforts also as a way of marketing and getting your name out into the community in addition to generating revenue for your organization. Fundraising events, while they may not always create a large amount of income for an organization, cannot always be measured by the amount of money they generate at that event. This is due to the possibility of future donations and contributions based on the relationship which may have been established at one of these events. Additionally, hiring a professional fundraiser can be a smart move for even the youngest of non profit organizations.  Not only does a professional fundraiser have experience working a variety of different events, a professional fundraiser knows how to make connections and secure sponsorships.

Even non profit organizations which have been successful over a period of time using one revenue source should consider working to find new untapped sources of income. This will strengthen any organization and all organizations will welcome more income; as more income allows the organization more freedom in working towards accomplishing their mission and fulfilling their goal.

Want to learn more about the do’s and don’t of fundraising effectively? Check out CharityNet USA’s short video “The 8 Truths of Fundraising” .