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How do nonprofit apps that don't charge for service make revenue? Does the government give grants to nonprofits for their services?


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Mark’s Answer

Great question Aleena! Making a profit is one reason for any organization for creating and offering an app (free) but it's not the only reason. By signing up for an app, any organization can start a relationship with you. And that's worth a lot. Sometimes they get a small fee from an advertiser based on the number of subscribers. Ultimately, they are often trying to build a tribe - a coalition of people who identify with their cause in some way.

The app can help develop that relationship in a way that people who just read a blog or visit a website just can't. Once the NP has the connection made possible by the app, they can continue to communicate with you. Whether you join the NP, support it morally or financially, the engagement an organization can get over time is a great return for offering the app for free.

I hope that makes some sense.


Ok, thank you! Aleena M.

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Dawn’s Answer

Great question! Non-profits source their funds through fed/state/local govt grants, foundations (local and national), fundraising campaigns, individual donors, and often times corporations have a community giving department that offers grants to non-profits aligned with their corporate interests. For example banks may support non-profits offering financial literacy programs.

Fund raising is a full time job for most non-profits, and often times the grants are provided for specific programs, technical assistance. General overhead operating funds are the hardest to find these days as most organizations providing grant funding want to tie it to a particular program and require metrics that measure results and success.

Thanks Ms. Holdridge! That makes sense! Aleena M.

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Craig’s Answer

Hi there,

In general, non-profits "earn" revenue through grants, donations, and other sources of revenue. Grants and donations could come from governments, corporations, other non profits, or individuals. Other sources of revenues could come in the form of advertising space, sponsorships, etc. Non-profits are exempt from certain types of taxes (i.e. most federal income tax).

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Bill’s Answer

While there may not be a fee, there is almost always an indication that not 100% of the donation goes to the cause. Operating costs/Salaries, etc are covered through the donations.

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Del’s Answer

There are some good articles on this topic via google. Sponsorship and lead generation are the two most popular sources of income for non-profits. Try to align your app with companies that provide products or services that are aligned with your non-profit cause. If folks decide to buy the products or services you could earn a commission.

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Will’s Answer

While some generate adds and sponsorship leads for sure and they all hope to bring in money, sometimes these apps are created without the intention of bringing in money. It is a non profit after all and while they do have to stay in the black sometimes these non-profits simply use the apps as outreach programs instead of direct revenue generating vehicles.

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Kara’s Answer

Great question!

As others have responded, non-profits can generate revenue from a variety of sources. First off, just because an organization is a non-profit doesn't mean that it gives its services away for free. For example, many finance- and education-related non-profits charge for their services! That said, there are other types of non-profits where it would be inappropriate or impossible to charge customers a fee, or the revenue generated from sales is not enough to sustain the organization. In those cases, non-profits look to individual and corporate donations, as well as foundation and government-sponsored grants for additional financial help. Nearly all non-profits have entire teams dedicated to fundraising, and much of the executive leadership's and board members' time is spent on fundraising for smaller non-profit organizations.

The type of donors or grant-makers really depends on the industry. There are large foundations that invest in non-profits working on Sustainable Development Goals (SDGs) broadly, while there are others that focus on their specific areas of interest (e.g., healthcare, education, the arts). Beyond donors' areas of interest, though, there are general trends in fundraising that can be leveraged, across the board. For example, non-profit giving tends to skyrocket when donors are disappointed in the outcome of an election or in fear that a newly elected official will cut funding for a program they value (this is called "rage giving"). This will be very interesting to follow as this year's presidential election plays out!

Thanks for the advice. I'll look out for "rage giving" this upcoming election! Aleena M.

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Ryan’s Answer

Most free apps have ads on them which is how they generate their revenue.

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Bill’s Answer

While there may not be a fee, there is almost always an indication that not 100% of the donation goes to the cause. Operating costs/Salaries, etc are covered through the donations.

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