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3 Nonprofit Funding Avenues All Founders Should Know About And deciding which one is right for you.

By Janet Gershen-Siegel

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Like for-profit ventures, nonprofits need money to grow and meet mission objectives. There are several choices out there. Many are viable even if the founder has bad credit. Many will even work for nonprofit startups. Play to the nonprofit's strengths. There is funding to match.

Grants

Government grants require paperwork and grant proposals, but they are often a good place to start. These operate a lot like business plans and require a 501(c)(3) designation.

Federal Grants

The federal government wants to hand out money. Go to grants.gov to search for grants. Here are some grants for nonprofits.

  • F20AS00026 – Youth Engagement, Education, and Employment: Develop introductory educational experiences in natural resource careers to young people and veterans (via the Department of the Interior, United States (U.S.) Fish and Wildlife Service).
  • USDA-NRCS-NHQ-UAIP-20-NOFO0001013 – Urban Agriculture and Innovation Production: Develop projects to initiate, build upon or expand the efforts of farmers, gardeners, citizens, government officials, schools and other stakeholders in urban areas and suburbs.
  • RUS-20-02-DLT – Distance Learning and Telemedicine Grants: Improve distance learning and telemedicine services in rural areas.

Try HUD (Housing and Urban Development) for urban projects, also under grants.gov. Here's a nonprofit-eligible HUD grant:

  • FR-6300-N-USP – Authority to Accept Unsolicited Proposals for Research Partnerships Notice

If applying for more than one grant, it must be a separate application under the correct ID.

Try the USDA (Department of Agriculture) for rural projects. There are opportunities like:

Find them online here.

The USDA gives grants for low-income housing, rural development, and housing preservation. See here.

State and Local Grants

Local governments also provide grants. For example, here's one in Massachusetts. You can find them at grantwatch.com or try city and state websites. They are often less restrictive than federal grants. For example, in Houston, everything goes through the Greater Houston Community Foundation.

You can get federal money for state and local programs. Use the HUD Investment Partnerships program. See hudexchange.info/programs/home

Crowdfunding

Nonprofits can try a service like GoFundMe. There is no platform fee. Instead, they offer donors an option to add a tip. GoFundMe offers specific services to nonprofits. These include data and reporting, or you can try event-based crowdfunding with them.

Here are some of the best options for nonprofits looking to crowdfund.

GoFundMe

The best-known crowdfunding site for nonprofits has no platform fees. Rather, GoFundMe makes money with 2.9 percent payment processing fees. It offers fundraising tips and ideas so nonprofits can maximize results. See gofundme.com.

CrowdRise

CrowdRise is part of GoFundMe. Create a nonprofit website with CrowdRise, or work on events or peer-to-peer fundraising. See crowdrise.com.

NFF

Nonprofit Finance Fund (NFF) provides working capital to manage cash needs and bridge loans to cover costs while awaiting other funding. See nff.org/financing.

America's Promise Alliance

America's Promise Alliance provides grants to help young people. Recipients can be communities or organizations (like the United Way). See americaspromise.org/news/funding-opportunities-205.

Candid.org

Foundation Center keeps a large database of grants, grant makers and recipients. Find grants from all over the world for various purposes. See candid.org.

MobileCause

MobileCause runs fundraising campaigns for nonprofits. It engages with supporters through mediums like text. See mobilecause.com.

Global Giving

Global Giving is a platform that connects donors to causes. It also offers corporate partnerships. There is a 5 to 12 percent nonprofit support fee. See globalgiving.org.

CauseVox

This site's purpose is to help a nonprofit create and grow a community around a cause. Its basic plan cost is a percentage of the platform fee. The standard and growth plans' costs are lower percentages, but they have monthly fees. See causevox.com.

Classy

Classy offers a way to create fundraising pages. With Classy Events, a nonprofit can put together road races, concerts and more. It offers a fundraiser reporting tool to track progress. See classy.org.

Building Business Credit

What if a nonprofit founder's FICO scores aren't good enough for traditional loans? If the organization is between fundraising campaigns, it can build business credit. Business credit can help a nonprofit at any stage, so it should build business credit even if the founder's FICO score is stellar. In this respect, a nonprofit is the same as a for-profit business.

Business credit is a great way to get money for a nonprofit without

  • Collateral
  • Cash flow
  • A founder with good personal credit
  • A guarantor

It's a great way to smooth out funding peaks and valleys between fundraising campaigns. An organization can get business credit immediately, even as a startup nonprofit venture. Good business credit is more than a means unto itself. It will help a nonprofit get loans in the future.

These are just some of the ways nonprofits can improve their facilities and programming without having to depend on the generosity of donors.

Janet Gershen-Siegel

Content Manager of Credit Suite

Janet Gershen-Siegel has been admitted to practice law for over 30 years. She is an expert in business credit lines and loans.

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