Nonprofit Revenue Sources : Nonprofit Income

766 WordsJul 19, 20164 Pages
Nonprofit Revenue Sources Most nonprofits have multiple streams of income. Nonprofit income sources include: charitable donations, fees, government funding, investments, and cash converted from goods and services donated. The diversification of a nonprofit’s portfolio differs based on the size of the organization and the financial health. It is critical that the management overseeing the organization’s accounting finds a strategy that will allow the organization to develop the income mix that best achieves its social mission. The strategy should include a diverse mix of incentives, donors, customers, and government affiliates that will provide the income needed to fund the organization’s cause (Young, 2007). There are pros and cons to being considered a nonprofit versus a for-profit business. Unlike nonprofits, for-profit businesses do not have to worry about restricted assets or the prohibition on issuing stock or imposed taxes. On the other-hand, nonprofits do not have the pressure of turning a profit, or having major revenue surplus, to be considered financially healthy. In fact, surplus in revenue could mean there is an issue with the organization ineffectively serving their demographic. The government judges the financial performance of organizations by whether the organization was able to balance their budgets while attending to the needs of their participants (Young, 2007). Donations Donations are made up of cash and in-kind gifts. In-kind gifts are tangible goods

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