Section 2: Revenue, funding and grants
In our 2018 report we noted a shift that pointed to a possible slowing down in the number of grants applied for. However, data gathered from the survey in 2020 shows an uptick in grants applied for as well as planning for more grantee submissions. Interestingly, 29% of respondents for our 2021 report noted plans to collaborate with grantors to expedite funding and/or remove funding restrictions.
Going into 2021 more organizations are expected to apply for additional loans, required to produce detailed audits and planning for virtual fundraising to add more benefit to the mission’s bottom line in 2021. Federal government grants/funding somewhat increased for 39% and 19% increased significantly respectively. On the other hand, the highest losses were amongst fundraising revenue (events) at 46%, service fees at 30% along with program revenue and individual donor revenue decreased somewhat.
For number of funding sources nonprofit professionals are managing, 43% of the participants are managing 11-49 funding sources, with 38% of them managing 10 or fewer funding sources.
Respondents report that the average nonprofit have 32% of their funding coming from federal grants, 23% from state and local grants, and 18% from program or service revenue. (These numbers look similar when projecting for 2021.)
Seeking new grant funds, according to 77% of the study participants, is the top way organizations are helping to maintain and increase funding.
2020 was also a unique year as government grants, including significant loans due to the pandemic, were heavily relied on by nonprofits. However, going into 2021, 29% shared they will see a reduction in government grants and 45% of them claiming individual contributions as the most vulnerable to drop-offs in funds. The lease vulnerable are virtual events and retail.
In the nonprofit world, to serve a community, relationships are built by listening and gathering insights from the community served. This also holds true with the grantee and grantor community as well. In our 2021 research, respondents’ data reflects 47% of organizations are focused on developing relationships with grantors as a way to grow more funding opportunities. Grantors want to hear mission stories backed up with quantitative and qualitative data.
Over half (54%) submit financial reports to six grantors or more.
87% of organizations are required to report detailed info on how funds are used.
73% of organizations are preparing grant reports at least quarterly. On average, nonprofit financial professionals spend 6 hours when they have to prepare grant reports. For the 44% doing this monthly, that equals 192 hours a year. This data point highlights the need for more efficient and expedient tools for data gathering, inputting and exporting as grantor requests continue to require more data and detailed reporting of funds disbursed.
In contrast, our 2018 research study, most respondents - 59%, revealed they did not have to report to funders more frequently. Results from our 2018 study as well as 2021 study data reflect that granting organizations want more transparency, clearer audit reporting and coding as well as more quantitative data in the reports. This data underscores continued need for effectively and expediently pulling donor giving data for more robust auditing and reporting to granting foundations.
It’s also important to note that even during the pandemic, over 59% of respondents revealed grantors were not loosening, eliminating or reducing requirements on existing grants.
Only one in five respondents have had grantors reduce their reporting restrictions during 2020. This implies a good signal that restrictions should continue, especially with new funding paths and potential unknowns.
