The Nonprofit Finance Model

The nonprofit finance model describes how a nonprofit organization manages its money to support its mission. It combines different income sources—such as grants, donations, and earned revenue—and balances expenses like programs, administration, and fundraising. By carefully planning and monitoring these finances, nonprofits ensure they can deliver services effectively, sustain operations, and adapt to changing needs. This model emphasizes that nonprofits reinvest surplus funds into their mission rather than generating profit, focusing on sustainability, transparency, and impact. Ultimately, it guides organizations in making strategic financial decisions to maximize their social benefit.