Why Year-End Donations Are So Vital to Nonprofits

At this time of year many nonprofits, including Blue Water Baltimore, remind you that we need your support. We ask you to give before the end of the year and then send you straight to the Donate webpage. If you’ve gotten that far, then it’s likely that you already believe in our mission.

You also may already understand the benefits of reducing polluted stormwater runoff, or of cultivating more native plants. You might be asking yourself, however, WHY is your donation so important to a nonprofit organization like Blue Water Baltimore?

Most donations from individuals are what’s known as “unrestricted funds”–that is, they are not tied to programmatic outcomes such as number of trees planted or number of rain gardens installed. We are certainly grateful for the support of our generous grant makers, but many of our operational expenses are not covered by these programmatic grants.Unrestricted funds, meanwhile, are an incredibly important source of income that allows the organization to function from day to day. They provide us with flexibility to take advantage of unexpected opportunities and to handle unexpected challenges quickly and smoothly. Unrestricted gifts also allow us to prioritize our most pressing needs and offset some of the costs that are not covered by grants from foundations.

These “no-strings-attached” gifts help cover necessary expenses like attracting high quality staff, paying the electric bill or buying toner for the printer. Without these, we could not organize our tree plantings and stream cleanups or run our Water Audit program for homeowners. Typically, a nonprofit’s goal is to have 75% of funds spent on programs and only 25% on operating. Every nonprofit faces an uphill battle to raise funds to pay for its program and operational costs, and Blue Water Baltimore is no different. We always seek to spend much more on our clean water programs than on operating expenses!

Year-end gifts also help us plan for the upcoming year and set goals for 2012. Being able to show support from a diverse pool of contributors helps us leverage funds from other sources. Funders, as well as some individuals, look at an organization’s finances to see where the organization’s money is coming from and how it is being spent. Seeing money committed from a broad spectrum of givers allows funders to see widespread support for the organization’s mission and so feel more comfortable committing their own resources.