The Everything Nonprofit Toolkit by Jim Goettler

Author:Jim Goettler [Goettler, Jim]
Language: eng
Format: epub
ISBN: 9781440538971
Publisher: Adams Media
Published: 2012-07-15T00:00:00+00:00

Public and Private Funding

As your board and consultants develop a fundraising plan, begin breaking down how you would like to spend the money (operations, capital development, staffing, programming, etc.) and where you intend to raise it. You have two clear choices: public financing or private financing.

The IRS has already helped you by mandating that a minimum amount—one third—of your total income must come from public sources. As you sketch out your fundraising plan, begin with that number.

For example, if your overall projected budget is $60,000, you must show that at least $20,000 came from public sources and the remaining $40,000 from private or nonpublic sources. Show hard numbers representing these percentages in the preliminary budget you provide as part of your application for tax exemption and then stick to it in the future. The IRS monitors a new 501(c)(3) organization for five years to make certain it is indeed operating as a public charity and is securing at least the minimum percentage of its operating budget from public sources.

On a basic level, public funding can be broken down as:

Government funding

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