Funding: Patterns and Guideposts in the Nonprofit Sector
New York, NY (September 1, 2003)- Although funding is a pressing concern for nonprofit organizations across the United States, detailed information about how dollars flow within the sector is hard to come by. The Bridgespan Group researched the funding for three samples of nonprofit organizations using Form 990 returns, complemented by company-specific reports and personal interviews.
Key findings include:
1. The largest organizations tend to rely on a single type of funding for the majority of their revenue, rather than having a balanced mix from a variety of funders. Among youth services and environmental advocacy organizations, there are distinct transition points across a spectrum of revenue sizes where organizations move from heterogeneous to singletype funding.
2. Among the largest organizations, the kind of work an organization does influences, but does not dictate, the identity of its dominant funding type.
3. In the fields we selected for in-depth analysisóyouth services and environmental advocacyógrowth to a significant size is extremely rare, and the largest organizations control most of the resources.
4. In youth services and environmental advocacy, there seem to be transition points in the typical funding mix used by organizations of different sizes, suggesting that the size of an organization influences its dominant funding type.
* In environmental advocacy, foundations and individuals provide most of the funding, and the funding composition of the top 50 organizations is stable over time.
* In youth services, government funding is a more significant part of the funding mix for larger organizationsóapart from the organizations above $100 million, which tend to rely on individual funding.
* In both youth services and environmental advocacy, foundation funding is an important type of funding for small organizations (less than $1 million), but it becomes a small part of the funding mix for large organizations (greater than $10-25 million).
The research raises several important questions. Chief among them: How much does an organizationís field influence the types of funding available to it? What is the role of foundations in transitioning grantees onto other funding types? What are the potential benefits of partnership with a larger organization? And, finally, how important is an organizationís brand when it comes to accessing certain types of funding?
Related Resources:
Funding: Patterns and Guideposts in the Nonprofit Sector
Bridgespan Group
