Funding: Patterns and Guideposts in the Nonprofit Sector

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. For example, are there distinct patterns to the ways in which nonprofit organizations are funded? If the answer to this question is "yes," those patterns could provide important "guideposts" for similar organizations planning their funddevelopment strategies.To begin answering this question, the Bridgespan Group researched the funding for three samples of nonprofit organizations using Form 990 returns, complemented by company-specific reports and personal interviews. 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 ofrevenue sizes where organizations move from heterogeneous to singletypefunding.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 analysis -- youth services and environmental advocacy -- growth 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