Tree Growing Out of CoinsAbout 45,000 nonprofit organizations incorporate each year, according to a 2012 analysis by Georgia State University, and 16 percent of them fail within five years. Nonprofits—also known as 501(c)(3) organizations, in reference to the corresponding IRS code—are meant to further a particular cause, as opposed to generating profits for shareholders and executives. If you want to establish a nonprofit, you’ll have a better chance of success if you’re in it to better the lives of others, not yourself. A nonprofit will only be as successful as your passion for the cause.

When it comes to raising startup capital, nonprofits face many of the same obstacles for-profit businesses do. But some funding options are exclusively available to 501(c)(3) organizations.


A 2013 survey of existing nonprofit organizations, conducted by GrantStation and grant management firm PhilanTech, found that 80 percent of respondents received some type of grant during the year. Notably, 31 percent said they received larger awards in 2013 than they did the year prior. Grant money is out there, if you put forth the effort to secure it.

The Center for Nonprofit Excellence is the go-to source for available grants. The website lists grants based on the criteria necessary for approval and by deadline. The NonProfit Times also lists numerous grants organized by category.

The process of finding grant opportunities isn’t easy, but writing a proposal to the administrator will be even more difficult. If you plan on write the proposal yourself, make certain to study up on grant-writing essentials. Talk to other nonprofit administrators in your region who have recently received grants. Ask them for copies of their letters and any other advice they are willing to offer. You may even consider hiring a professional grant writer to minimize any uncertainty about the process.

Government Contracts

State and federal governments frequently outsource services they do not have the means to provide to nonprofits. TMC, formerly the Texas Migrant Council, Inc., was established in 1971 using federal funds available through the Head Start program. The organization provides educational and other opportunities for migrants who did not speak English and/or need to acclimate to their new culture.

The Success For All Foundation uses a similar approach, providing students extra help with reading and other essential skills necessary to succeed in life. Federal government funds come with strings attached, so make sure you read the fine print before accepting any. Start your research at

Member Contributions

Nonprofit organizations are headed by a board that makes all the business decisions. The small group you put together can simply pool together their available funds to get the project started. Begin with savings accounts and all other liquid assets.

Anyone currently receiving structured settlement or annuity payments could contact J.G. Wentworth or a similar company to potentially buy their future payments for a lump sum of cash now. Many Americans have gained equity in their homes in the past 20 months due to home prices steadily rising since mid-2012. Talk to your bank about a potential home equity loan.

A nonprofit built on principle as opposed to potential profits has the best chance of long-term success.

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