How charities make money

Charitable organizations survive primarily from the donations they receive from organizations and individuals.

For most charities, raising donations during the holiday season is easy. But in the 11 other months of the year, they must get creative about finding other ways to make money, aside from simply relying on the generosity of others. Below are the five primary ways charities get money and stretch their dollars.

Donations bring in needed revenues, but charities can make them stretch even farther by relying on the generous time individuals are able to donate to their favorite cause. There are even nonprofit organizations that exist to help other charities maximize their army of volunteers. The majority of charities rely mainly on volunteers to help them run, and people can volunteer in many great ways.

Many charities hold a gala event each year to help raise funds. The events can be quite costly to organize and run, but can bring in some of the largest revenue of the year. Some organizations can bring in more than $1 million from a fundraising gala through a mix of wealthy donors, corporations that sponsored the event or individual tables, as well as numerous other individuals interested in the cause. Silent and live auctions of travel events, products and other services donated by businesses also bring in revenue during these events.

Selling a product can be one of the more tangible ways for charities and other nonprofit organizations to raise funds. The annual sale of Girl Scout cookies and Boy Scout popcorn are two of the highest profile product examples, bringing in hundreds of millions of dollars each year, much more than its fees from annual membership. The cookie sales have been a lucrative revenue stream for the Girl Scouts since the early 1900s, when the first cookies were said to have been sold.

Gala events certainly qualify as important charitable events that can bring in donations. Other events and performances also bring in money. Organizations in the performing arts have a leg up in this category and can present concerts, dance performances and music recitals to help support the arts. Other events can include telethons, such as those that public radio and television organizations hold to secure operating funds.

Spending money is a vital way to eventually make money. Advertising and publicity can increase a charity's reach and awareness among potential donors. As with volunteerism, advertising doesn't directly generate revenues, but it can lead to giving and related revenue, such as gala attendance or product sales. A celebrity endorsement can have a huge impact as well. 

There are many ways an organization can make money, and charitable organizations are some of the best at generating revenue. From product sales to events, charities can make revenues from many sources. Furthermore, with volunteers helping them out for free, margins are even better for these non-profits.