The Many Ways Charities Make Money

By Ryan C. Fuhrmann | July 10, 2012 AAA
The Many Ways Charities Make Money

Charitable organizations survive primarily from the donations they receive from organizations and individuals. For most charities, the holidays, and especially in December during the Christmas holiday, are among the most active from a donation perspective. This leaves roughly eleven months to get creative and find other ways to make money, aside from simply relying on the generosity of others. Below are five important avenues for charities to bring in money and make their donated dollars stretch further.

SEE: 6 Ways To Volunteer During The Holidays

Volunteerism
Donations bring in needed revenues, but charities can make them stretch even further by relying on the generous time individuals are able to donate to their favorite cause. There are even nonprofit organizations that exist to help other charities maximize their army of volunteers. The majority of charities rely mainly on volunteers to help them run, and people can volunteer in many great ways. One estimate put the total of American volunteers at 63.4 million in 2009, meaning that nearly a quarter of the population donated their time during the year. The monetary value to a charity stood at just over $20 per hour and saves quite a bit of funds that can go to their worthy underlying cause.

Gala Events
Many charities hold a gala event each year to help raise funds. The events can be quite costly to organize and run, but can bring in some of the biggest funds of the year. One organization that funds cancer research announced it raised more than $2 million during its fundraising gala at the end of 2011. It put its attendance at a couple of hundred people through a mix of wealthy donors, corporations that sponsored the event or individual tables, as well as numerous other individuals interested in the cause. Silent and live auctions of travel events, products and other services donated by businesses also bring in revenue during these events.

SEE: People Who Benefit The Most From Volunteering

Product Sales
Selling a product can be one of the more tangible ways for charities and other nonprofit organizations to raise funds. The annual sale of Girl Scout cookies and Boy Scout popcorn are two of the highest profile product examples, with the former bringing in an estimated $714 million in 2010. This was estimated at 20 times its annual membership revenue and easily brought in the most funds for the organization during the year. It has been a lucrative revenue area for the Girl Scouts since the early 1900s, when the first cookies were said to have been sold.

Events and Performances
Gala events certainly qualify as important charitable events that can bring in donations. Other events and performances also result in revenue. Obviously, organizations in the performing arts have a leg up in this category and can present concerts, dance performances, and music recitals to help support the arts. Other events can include telethons, such as those that public radio and television organizations hold to secure operating funds.

SEE: Pros And Cons Of Volunteering In Your Career Field

Publicity
Spending money is thought to be a vital way to eventually make money. Advertising and publicity can increase a charity's reach and awareness among potential donors. As with volunteerism, it isn't a specific revenue generator, but can lead to giving and related revenue, such as gala attendance or product sales. A celebrity endorsement can have a huge impact. Animal rights organization PETA lists over 113 celebrities on its website, many of whom are famous, which undoubtedly helps to build awareness for the cause and attracts much-needed donation dollars.

The Bottom Line
There are many ways an organization can make money, and charitable organizations are some of the best at generating revenue. From product sales to events, charities can make revenue from many sources. Furthermore, with volunteers helping them out for free, margins are even better for these non-profits.

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