10 Emergency Funding Sources For Nonprofits
Every once in awhile, non-profit organizations are faced with a serious financial challenge. When this happens, there are several things you can do to secure financing solutions. So, before you panic, here are 20 places to look for the funds you need to keep your nonprofit going:
1. Board members
When there’s an emergency, call all hands on deck! While relying on board members to finance a nonprofit is a bad idea, there’s no shame in asking for help during a genuine emergency. You never know when they will be feeling charitable. Just make sure that you don’t take any help you receive for granted and don’t do it too often. Plus make sure you understand the regulations into getting a loan from board members because there are many different rules.
2. Reach out
During a financial emergency, reach out to anyone who you think can help. Try asking donors, clients, and anyone who you feel is personally invested in your nonprofit or its mission. Try to reach them through as many outlets as you can. Get on Facebook, make some phone calls, and so forth. Don’t neglect former donors who are no longer active with your organization.
3. Nonprofit-specific business loans
Very few business lenders offer loans tailored to nonprofits; however, there are a few that do and their offers can be quite appealing. For example, Financing Solutions offers a nonprofit line of credit product suited to nonprofits in any situation that is an excellent emergency funding source. Their application process is particularly fast, all you need to do is fill out a two-minute online application and the line of credit can be in place in 24-48 hours. As an added benefit, after you use the line of credit for your emergency, you can continue to use it as a safety cushion. Their line of credit is free to have so you only have to pay when you draw funds.
4. Emergency Grants
Some institutions specialize in providing emergency assistance to struggling nonprofits. One example is Open Road Alliance, a philanthropic initiative dedicated to helping nonprofits. They offer both short and long-term solutions to financial challenges in the social sector. Try reaching out to them or looking for other institutions that offer similar assistance.
Local nonprofits do a lot for communities and society at large. While people aren’t always sympathetic to their causes, there is a strong chance you can find help from the general public. If you have any reason to believe that people would be sympathetic to your organization’s cause, reach out! If your nonprofit is truly struggling, you have nothing to lose for trying. You might be surprised.
Consider that fundraising is much easier today than it used to be. With platforms like Gofundme, the internet has made fundraising simpler and faster. This new form of fundraising is called “crowdfunding” and there are many ways to go about it.
6. Reserve funds
Savings are best left alone. That being said, what’s the point of a “rainy day fund” if you aren’t going to use it when it’s pouring? Taking funds from your reserves is never an attractive option. If it’s necessary, though, you have to do what you have to do.
7. Emergency Loans
There aren’t very many loans offered specifically to nonprofits in the middle of a financial crisis. There are loans that can be secured if someone at your nonprofit is willing to give their personal guarantee and if you are willing to wait a few months. Many of the fastest loans you can get carry high APRs so be careful and selective. The good news is that there are options out there. The bads news is that it will be hard to find someone who is willing to sign a personal guarantee. If you’re in a rush, there’s no need to worry. Just make sure that you have a plan to pay them back if you take out a fast loan with a high APR or interest rate.
8. Sell your assets
You might be able to offer back services to other nonprofits for a fee. If applicable, offer consultation as a way to share your organization’s expertise with others. In some cases, you may be able to sell intellectual property. While these kinds of options are often far from ideal, they are worth considering in extreme cases.
Apart from services, you can, of course, sell your inventory. Depending on what kind of nonprofit you run, this could be a good way to escape a financial disaster. The only downside is that you’ll likely lose some money from the sales. This is still better than having the whole organization go under. If you sell your assets, you can also purchase more later if you get a loan.
9. Term loans
Term loans are a great option when you can secure them. If your nonprofit has a good financial track record so far, getting a loan is always an option. When it comes to lenders, keep in mind that established, traditional banks are usually stingy about working with nonprofits. They also take a lot longer to assess you so you should avoid them. If your nonprofit is seen as financially dependable from a lender’s point of view, though, this is the simplest option.
10. Set up events
If simply asking people or organizations for funding isn’t appealing to you, you can set up an event instead. That way, your supporters can help your organization in its time of need while getting something out of it. Just remember to make it interesting. “Raising Money” isn’t a theme for an event. You can use classic ideas like bingo nights or singles’ nights. These ideas might not be ideal for all nonprofits. It is your call whether to put yourself and your organization out there like that.