Why Nonprofit Savings and Investments Matter
Posted: November 1, 2024
Why Savings and Investments Matter: Break Free from the Fundraising Circus
Running a nonprofit can feel like a balancing act—juggling between fulfilling your mission, raising funds, and ensuring long-term financial sustainability.
In this delicate dance, one often overlooked aspect is the power of savings and investments. Done right, these tools can transform your nonprofit’s financial foundation, creating stability, growth, and the ability to weather unforeseen challenges. At Better Giving, we understand the financial pressures nonprofits face, which is why we offer unique solutions that not only simplify donations but also provide strategic savings and investment options designed to secure your nonprofit’s future.
The Importance of Financial Stability for Nonprofits: What if your nonprofit could grow its financial resources without this constant worry?
Nonprofits are mission-driven, often relying on donor support to sustain their programs. While fundraising is essential, having a financial cushion through savings and investments ensures that your organization can continue its work even during lean periods.
We understand that managing nonprofit finances can be stressful. The uncertainty of fundraising, fluctuating donations, and unexpected expenses often lead to anxiety.
That’s where we come in!
Better Giving’s platform offers two key solutions to help nonprofits achieve this stability and reduce their financial anxiety:
- The Savings account: Our high-yield savings account provides a secure, low-risk way for nonprofits to grow their donations. Donated Funds are automatically placed in this account to earn steady interest as soon as possible, helping nonprofits build financial stability without the risk to their principal.. As a nonprofit ourselves, we use the same savings services to manage our own funds, ensuring reliability and trust.
- The Sustainability Fund: Our high-yield investment fund is designed to help nonprofits achieve long-term financial stability by growing their donations over time. Unlike one-time donations that are used up quickly, the Sustainability Fund allows your contributions to keep working for your organization. The growth is reinvested, ensuring your nonprofit has a reliable source of funding well into the future. Our Sustainability Fund has averaged a 24% return annually over the past five years.
These financial tools provide a pathway to self-sufficiency, helping your nonprofit grow its funds while maintaining peace of mind. Whether you’re looking to preserve your donations or seek higher growth through investments, the power of compound interest and long-term planning cannot be overstated. And if needed, you have the power to withdraw from the Savings Account and Sustainability Fund at any time.
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Case Study: Ace of Hearts dog shelter grows with Better Giving
Take, for example, Ace of Hearts dog shelter – which had traditionally struggled with inconsistent cash flow. They joined Better Giving and over time, their donations steadily grew without any market risk, providing the shelter with a reliable reserve.
By the end of the year, they were not only financially stable but also able to expand their services.
You can donate to them now to help their financial success continue.
Donate Now
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The Role of Investments in Nonprofit Growth
Investments may seem like something reserved for large corporations, but nonprofits can—and should—use investments to secure their future.
With Better Giving’s Sustainability Fund, nonprofits have access to a unique, managed investment option. This high-yield fund provides nonprofits with the opportunity to grow their financial resources over time, transforming one-time donations into a lasting impact.
By diversifying funding sources and investing wisely, nonprofits can reduce their dependence on donations alone. The steady returns generated by investments help cover operational costs and fund new initiatives, allowing your organization to focus more on its mission and less on its finances.
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Case Study: Bali Food Bank Expands Its Impact
Consider the Bali Food bank that wanted to ensure long-term growth while addressing immediate community needs. After partnering with Better Giving, they’ve been able to provide for their local population year after year.
his financial stability empowered the food bank to expand its operations, serving more families without worrying about the next fundraising campaign.
They too could do with more funds though. Their work grows, and they have expanded to a partner foodbank in Kenya.
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Trust: The Role of Trust in Attracting Donors and Ensuring Financial Stability
In the world of nonprofit fundraising, trust is no longer optional. It’s a necessity.
Just as a trapeze artist trusts their partner implicitly, their equipment absolutely, donors place their trust in the nonprofits they donate to.
Today, they want to know exactly how their contributions are being used, and they seek assurance that their money is making an impact.
Trust strengthens donor loyalty and encourages larger and more frequent donations. Both for Better Giving and for nonprofits using the Better Giving platform. As a nonprofit ourselves, we have to publish our financial details each year on the ‘Form 990’ to the IRS. That is available to everyone, unlike private companies that do not have to publish such details.
Transparency enables trust.
A recent Charity Navigator report shows that nonprofits with transparent financial practices often receive larger average donations and retain donors more consistently over time.
At Better Giving, we understand the value of trust. Our platform provides nonprofits with clear, real-time financial reports, allowing organizations to track donations and savings growth effortlessly. Reflected in such as the form 990, this transparency not only reassures donors but also empowers nonprofits to make informed financial decisions.
Moreover, transparent financial reporting helps your nonprofit establish a reputation for integrity, which is essential for attracting institutional funders and long-term supporters.
Research from GuideStar and the Nonprofit Finance Fund consistently highlights that “donors prioritize giving to nonprofits that demonstrate accountability and financial health”.
When you combine trust with strategic savings and investment options, you position your nonprofit for sustained growth. Donors are more likely to support your cause when they can see that your organization is financially secure and responsibly managed.
Trust with donors also builds resilience within your nonprofit. By openly sharing your financial journey, you create a culture of accountability that attracts supporters, strengthens partnerships, and ensures your nonprofit’s long-term success.
It’s a three-step process:
- Build Donor Trust: Donors want to see where their money goes, and trust and transparency helps demonstrate that every dollar is used effectively.
- Attract More Donations: According to *Charity Navigator*, nonprofits with higher transparency and trust ratings often receive larger and more frequent donations.
- Support Long-term Growth: Transparent financial reporting enables better decision-making and provides the foundation for sustainable, long-term financial health.
By prioritizing transparency and trust alongside financial management, your nonprofit can gain the trust it needs to grow and thrive.
The Bigger Picture: Financial Self-Sufficiency and Risk Management
Financial self-sufficiency is the key to sustainable growth for nonprofits. While donations are crucial, relying solely on them can leave an organization vulnerable to economic downturns or donor fatigue.
By establishing a combination of savings and investments, nonprofits can mitigate risk, ensuring that they have the resources to continue serving their communities even when times are tough.
At Better Giving, we simplify this process.
Our platform integrates free donation processing with secure financial services, helping nonprofits maximize every contribution while building a reserve for the future.
From automated tax reporting to seamless donation forms, we reduce the administrative burden so that nonprofits can focus on what truly matters—their mission.
Why Choose Better Giving?
If you were that trapeze artist mentioned above, you need a great partner to catch you, so you don’t fall.
We’re a partner you can trust!
At Better Giving, we believe that financial empowerment is essential for nonprofit success. Our platform has helped over $1.5 million in donations flow to nonprofits in 2024 alone and $6M in total.
We offer more than just free donation tools—we provide a comprehensive approach to nonprofit financial management that includes savings, investments, and long-term growth strategies.
Nonprofits that partner with us and donors who donate through us can experience the peace of mind that comes from knowing the donations are in good hands.
Why? Unlike many donation services, we are a nonprofit ourselves, which means we understand your challenges, are committed to providing solutions that work for you, and are regulated by the same transparency laws that every nonprofit has to follow.
With transparent reporting, a focus on sustainability, and a dedication to helping nonprofits grow, Better Giving is the partner you and your donors can trust.
Together, we can build a stronger financial future for your nonprofit, allowing you to focus on making an even bigger impact in your community.
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References:
- GuideStar, Report on Transparency in Nonprofit Organizations 2017
- National Council of Nonprofits via EnSync, Financial Stability for Nonprofits, 2020
- The Nonprofit Finance Fund, “State of the Sector” report 2022