How do NGOs get funding?

Add a header to begin generating the table of contents

Page written by Ashlyn Brooks. Last reviewed on November 5, 2024. Next review due October 1, 2025.

You may have heard the acronym NGO mentioned in reference to humanitarian aid or environmental activism, but NGO stands for non-governmental organization, and they play a significant role in addressing various global challenges.

However, like all organizations, NGOs need consistent funding to sustain their operations and continue making an impact. Swoop offers tailored funding solutions to help NGOs access the financial support they need. Whether you’re running an NGO or seeking to support one, understanding the funding landscape is essential for long-term success.

Add a header to begin generating the table of contents

What is an NGO?

An NGO, or non-governmental organization, is a non-profit that operates independently from government control, typically to address social, environmental, or humanitarian issues. Some common ones include Save the Children and Oxfam International.

NGOs vary in size and focus, with some operating on a global scale, while others work within specific communities or regions. These organizations are essential in advocating for marginalized populations, environmental conservation, and crisis response, among other causes.

Types of NGOs

There are two main types of NGOs; operation and advocacy. Each type of NGO requires different funding strategies, but both rely heavily on public and private donations, grants, and partnerships.

Operational NGOs focus on designing and implementing development projects, such as building schools, providing healthcare, or distributing food aid.
Advocacy NGOs are involved in promoting certain causes or influencing policies. Their primary goal is to raise awareness and advocate for change, such as environmental protection or human rights initiatives.

How are NGOs funded?

NGOs aren’t unlike a lot of nonprofits in how they obtain funding for their missions. NGOs rely on multiple sources of funding to sustain their work. Here’s what that can look like:

Grants from Governments and Foundations: Many NGOs secure large portions of their funding through grants provided by governments or private foundations. Grants are typically allocated based on specific criteria, including the NGO’s goals, projects, and geographic focus.
Private Donations: Individuals, corporations, and philanthropic organizations contribute to NGOs, often in the form of one-time gifts or recurring donations. Major NGOs may also run donation drives or crowdfunding campaigns.
Corporate Partnerships: NGOs often collaborate with corporations that provide funding, in-kind donations, or expertise in exchange for positive social impact or corporate social responsibility (CSR) recognition.
Membership Fees: Some NGOs, particularly professional or trade organizations, charge membership fees, which provide a steady stream of funding.
Fundraising Events: Many NGOs host fundraising events such as galas, charity runs, auctions, or community activities to generate income while raising awareness for their cause.

How do NGOs raise money?

If you’re an NGO looking to raise additional funds, there are numerous strategies you can explore. Fundraising is one of the most critical aspects of running an NGO, and successful efforts often combine multiple approaches to maximize financial support. Here are some of the most effective methods:

Grant Applications: Applying for grants from government agencies, private foundations, and international organizations can be a significant source of funding. This typically requires a deep understanding of the specific criteria for each grant and the ability to craft tailored proposals that align with the funder’s goals.
Crowdfunding: Online platforms provide an opportunity to reach a global audience. Crowdfunding campaigns can generate numerous small donations from individuals, which can quickly accumulate into substantial amounts. These campaigns also help raise awareness for your cause.
Major Donors and Corporate Sponsorships: Building relationships with major donors—such as wealthy individuals or corporations—can bring in large financial contributions. Corporate sponsorships, in particular, can be valuable, as businesses often seek partnerships that align with their corporate social responsibility (CSR) initiatives.
Membership Programs: If your NGO has a strong base of supporters, consider implementing membership programs. These programs offer perks or exclusive content in exchange for recurring donations, providing a steady stream of income while deepening engagement with your community.

Are private donations to NGOs tax deductible?

Yes, in the U.S., donations to NGOs are generally tax-deductible if the organization is registered as a 501(c)(3) non-profit. You can usually verify their tax-exempt status by checking their website or requesting their registration number directly from the organization.

These donations can reduce taxable income for the donor, creating an incentive for individuals and corporations to contribute. However, it’s important to confirm an NGO’s tax-exempt status before claiming a deduction. To qualify for this status, NGOs must meet specific requirements, such as maintaining transparency in their financial records and ensuring their mission aligns with charitable purposes.

How can Swoop help?

At Swoop, we specialize in helping NGOs and small businesses alike explore funding opportunities that fit their unique needs. For NGOs, securing the right funding can be critical to advancing their mission. Here’s how we can assist:

Access to Grants: Our platform helps you discover available grants tailored to NGOs, whether for operational support, program funding, or specific projects.
Tailored Funding Solutions: In addition to grants, we provide access to a range of funding options, including loans and equity financing, to support your organization’s growth and sustainability.
Expert Guidance: We’re here to guide you through the process, helping you identify and secure the best funding opportunities for your NGO.

If you’re running an NGO or considering starting one, explore how Swoop can help you secure the financial resources you need. Check available grants today to see how we can support your organization in achieving its mission.

Written by

Ashlyn Brooks

Ashlyn is a personal finance writer with experience in business and consumer taxes, retirement, and financial services to name a few. She has been published in USA Today, Kiplinger and Investopedia.

Swoop promise

At Swoop we want to make it easy for SMEs to understand the sometimes overwhelming world of business finance and insurance. Our goal is simple – to distill complex topics, unravel jargon, offer transparent and impartial information, and empower businesses to make smart financial decisions with confidence.

Find out more about Swoop’s editorial principles by reading our editorial policy.