How Do Charities Make Money?

How Do Charities Make Money?

It is safe to assume that charities rely almost exclusively on the generosity of good samaritans and organizations looking to help those in need. For some charities and nonprofit organizations, fundraising and collecting donations poses no challenge, particularly during the holiday months. For other charities, though, the other months of the year can be excruciating. Unfortunately, many people assume that nonprofits and charities have enough money, which leads to a decrease in donations because of the misunderstanding. Because of this, many charities have created a few methods that drive donations and savings.


One of the most well known and classic examples of raising money and saving money within a charity is done through volunteer hours. This is a win win for the charity because it provides the opportunity for others to serve and feel they are helping while simultaneously exposing them to the needs of the charity. It also allows the charity to save money and do even more good with it.


Not surprisingly, there are actually nonprofit organizations whose whole purpose is to help charities and nonprofit effectively utilize their following of volunteers to their maximum potential. Volunteering really makes a difference, no matter where you volunteer or with which charity you donate your time to.


It may sound counterintuitive, but charities spending money publicly often helps charities and nonprofits make more money. The publicity and media exposure of good being done expand the reach of any charity, creating more awareness and motivation for individuals to donate to the cause. The publicity may not result exclusively in financial donations, but almost always leads to donations of physical goods or volunteer hours.


Typically, charities will hold some type of formal gala event recurring annually or semi-annually. These events, often very formal, are held primarily for the purpose of fundraising. Organizations that exist in the performing arts sector have a significant advantage over other charities as they can present performances in music, theatre and dance with the end goal of supporting the arts. An example of this includes public radio telethons with the goal to raise a certain amount of money in order to accomplish something.


Through product sales, charities and nonprofits are able to raise a surprising amount of funds that can be used for good throughout the year. For example, the Girl Scouts sell cookies and have been doing so since the early 1900’s. Also, Kyani sells their dehydrated Potato Pak to business partners and their philanthropic arm, Caring Hands, takes the purchased product and feeds malnourished children throughout the world each year.


Forbes reports that collectively, the top nonprofit organizations raked in more than $108 billion from private donations. It should not come as a surprise that money is raised into the hundreds of billions annually. With many of the country’s wealthiest allocating 1-2% of their entire net worth towards charity, that money adds up fast. Some donate more than others. For example, Warren Buffet, with a net worth of $65 billion, directs 71.1% of his wealth to charity.


While you might not make even a fraction of what the wealthy make, you can still make a difference. Do you homework and find a reputable charity that helps a cause that is important to you. You can volunteer your time, donate supplies, or make a monthly donation to help those less fortunate than you.

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