Funding Streams: Which Is Best For My Organisation?

In New Zealand, there are 7 main ways to obtain funding professionally. We call these ‘funding streams.’ They can be broken down as follows: trust and grant fundraising, public giving, corporate sponsorships, bequests and legacy donations, event fundraising, crowdfunding, and memberships. Most not-for-profit organisations will start in one stream, become proficient, and then branch out into others. So, how do you know where to start? 

Often, the first stream not-for-profit organisations will begin getting confident with is trust and grant fundraising. There are a number of funding organisations within this stream, which means you can get a lot of practice in, and their application processes are usually very similar. This does mean it can get confusing and there is a lot of administrative burden to stay on top of though, so creating a grant calendar of funding organisation deadlines can be helpful. Trust and grant funding is one of the most efficient ways of obtaining funding in terms of the time investment. After you start seeing some success in this space, you should begin thinking about branching out into other streams. 

If your organisation is small to medium sized, you will achieve the best results by deriving your funding from three different streams. It’s really important to be seeking funding from different streams, as this mitigates risk. Although it can be tempting to stick with one successful stream because of the likelihood of return on investment, this would mean your organisation is at risk if funders suddenly change their priorities or circumstances, which happens more than you may think. 

The second stream organisations tend to branch into is major donors or public giving, before branching out into more specialised areas such as corporate sponsorship and bequests. 

The most important thing is to have realistic expectations on how long it takes to establish a funding stream. While organisations usually start to get success with trust and grant funding around the six month mark, with public and individual giving you often won’t see significant return for around two years. This is because public and individual giving requires you to raise awareness and build a brand, which is a hefty investment that pays off over time. The other thing to really consider is which streams fit with your organisation’s individual priorities. Some streams will work really well for organisations in your space, while others won’t – make sure you maximise your return on time and investment by asking yourself whether a funding stream can help you reach more than one of your organisational goals. 

The biggest mistake we see when organisations are trying to establish multiple funding streams is spreading themselves too thin. This tends to happen when they are struggling financially, and branch out to every possible stream and funding organisation that they can at once. Often, these organisations end up losing money and going backwards, even in streams where they’ve historically performed well. 

To summarise, trust and grant fundraising is likely to be the best stream to start in as a not-for-profit organisation. You may not see success for around six months, but this stream is how the majority of charities get their start. Once you start seeing success, slowly branch out into other streams that meet your organisation’s priorities. If you would like to chat with someone for advice on your funding strategy or which streams might be right for you, feel free to get in contact with a member of our team.