November 23, 2021 – Ever wonder why nonprofit organizations need support from individuals like you and me? Don’t most of them receive grants or public funding? The truth is, only a small number of nonprofit organizations receive grants and public dollars, and an even smaller number of organizations run completely on grants and public funding. Most nonprofits, especially here in Nevada County, rely in large part on individual or private giving; and it turns out that private giving is often the best form of funding for an organization.
Why? Like any business, nonprofits benefit from diversity of revenue streams for fiscal stability. In most cases, grants and public funding are designed to help an organization get started on a program or special project but are not designed for long term support or support of the general philanthropic mission. Grants may also come with high reporting and audit expenses that make them inaccessible to organizations with smaller budgets. In the absence of stable private giving, this leaves grant focused organizations scrambling for continued funding of programs in the future.
Support from individuals often comes with fewer- or no- restrictions which allows the organization to allocate funds where they will have the greatest impact. This could include efforts such as starting new initiatives, expanding existing programs, or responding to challenges, but it also covers the basic organizational need to pay rent, maintain adequate staffing, and pay for needed supplies.
There are many ways an individual can give. A cash gift is the simplest, of course. But one can give with a pledge offering funds in more than one increment, most often monthly or yearly. Donors who itemize their deductions might benefit from giving appreciated assets, and individuals over 70 ½ can also give from their IRAs and receive tax benefits even if they do not itemize. Donor advised funds have also become a popular way to take a current tax deduction while making decisions about how the funds will be used over time (ask your financial advisor). Watch for tomorrow’s article with more on monthly vs year-end giving.
We think we can safely speak for all CNL member organizations (our own included) when we say that private charitable giving is crucial to successfully meeting critical community needs.
According to Child Advocates of Nevada County, “Individual donors are vital to sustain our programs in support of vulnerable children and families in Nevada County. Grants and contracts alone do not cover the cost of serving every child removed from their homes due to severe abuse/neglect. We have to rely on generous monthly and year-end gifts to fill the gap and sustain our work.”
Hospice of the Foothills adds, “The gap in the basic cost of providing hospice care and reimbursement by Medicare, MediCAL and other health insurance plans continues to widen. Many of our community programs and services for patients, and families are funded solely by private gifts. Furthermore, as “the community’s hospice,” we turn no one away due to inability to pay.”
At the Center for Nonprofit Leadership, our programming would be impossible without the generosity of our donors and business sponsors. Truly, without private giving, our doors would be closed.
Nevada County’s tradition of organized philanthropic giving started over 100 years ago when the Lady’s Relief Society invited every local child to bring a potato and a stick of firewood to school to share with families in need. This seed of giving has grown to reach and sustain every corner of this community.
To share how you have been impacted by philanthropy, as a donor, volunteer, or recipient of services, email firstname.lastname@example.org, and you could be featured in a future article.
This series of articles is provided by the Center for Nonprofit Leadership – itself a 501c3 nonprofit. CNL strengthens the nonprofit community to fully realize its potential. We are a resource center for organizations and individuals. Nonprofit staffs and boards, through workshops and networking, are empowered to fulfill their missions and become stronger and more effective. To learn more visit cnlsierra.org