How nonprofits make money: where their income really comes from

Where nonprofit money comes from: the main revenue sources

Nonprofits earn money from six main sources: donations, grants, fees for their services, membership dues, fundraising events and sales, and investment income. In the United States, the Form 990 groups these into contributions and grants, program service revenue, investment income and other revenue, so the mix is visible for every organisation that files the full return.

The table shows each nonprofit revenue stream and its line in Part VIII of the Form 990, the annual return US nonprofits file (IRS Form 990).

Companies give through grants, sponsorships and by matching their employees' donations. Government money is split across two lines: a government grant counts as a contribution, but a payment for delivering a service is program service revenue, which the IRS describes as including "government fees and contracts" (IRS Form 990-EZ instructions). The mix of these sources differs widely from one organisation to the next.

Do nonprofits get most of their money from donations?

Not when you add up the whole sector: in Candid's analysis of US filings, earned income makes up about 75% of nonprofit revenue, contributions about 15% and government grants about 11%. That total is dominated by large organisations that charge for their services: among US public charities that filed for FY2024, hospitals alone (0.9% of filers) report 39% of all revenue (GiveRadar analysis of IRS filings).

Earned income here is money paid in exchange for services and products, such as tuition, patient care and tickets. Candid's split is based on FY2019 filings, and the rounded shares add up to slightly more than 100% (Candid).

The hospital figure comes from GiveRadar's analysis of FY2024 filings. The two numbers describe different years but point the same way: the common belief that donations are the main source of nonprofit income does not hold for the sector as a whole, even though donations still matter a great deal.

Who donates to nonprofits: individuals, foundations, bequests and companies

Individuals give by far the most: of the USD 617.2 billion donated in the United States in 2025, individuals gave USD 394.2 billion, foundations USD 117.15 billion, bequests USD 62.19 billion and companies USD 43.67 billion. These figures cover giving only, which is one part of nonprofit income.

Individuals are the source of nearly two thirds of all US giving (Giving USA 2026, via the Lilly Family School of Philanthropy). The bequests in these figures are gifts that people leave to a charity in their will.

Most nonprofits are small: how charity size changes where the money comes from

Most nonprofits are small, and a few very large ones hold most of the money: among 357,916 US public charities that filed for FY2024, the largest 1% report 75.1% of all revenue while the median charity reports USD 222,645. Candid counts about 1 million US nonprofits, 70% of the total, with annual revenue under USD 50,000. The two counts differ in scope: Candid counts all registered nonprofits, while GiveRadar counts Form 990 and 990-EZ filers.

The pattern holds in all six registers in GiveRadar's analysis of official charity filings, from the US and the UK to Australia, New Zealand and Ireland: the largest 1% report 57% to 75% of income, the smaller half about 1% or less. At the top sit large service providers such as hospitals, universities, housing and care organisations. Because reported income includes fees, government contracts and investments, these are shares of total income, of which donations are only one part.

How revenue is spread across US charities of different sizes

Three quarters (75.7%) of the 357,916 US public charities that filed for FY2024 reported revenue under USD 1 million, yet together they account for just 2.1% of all reported revenue. The 3,110 charities with USD 100 million or more, 0.9% of filers, report 73.7%. The smallest organisations, which file the 990-N e-Postcard, report no figures and are not included, and amounts are not adjusted for inflation.

Form 990 and 990-EZ filers with revenue above zero, FY2024 filings published so far; 501(c)(3) status checked against the IRS Business Master File. Source: GiveRadar Research, US charity revenue by size, FY2024, data snapshot 21 Oct 2026.

Hospitals as coded by the IRS (NTEE E20 to E24), a separate group from the size bands, number 3,116 charities, 0.9% of filers, yet report 39.0% of all revenue. Higher education (NTEE B40 to B43) adds 1,574 charities and 6.4%, which means 1.3% of filers hold 45.4% of the money. Both are lower bounds: 12.8% of filers have no NTEE code, and some large health systems are coded elsewhere.

Because hospitals and universities hold so much revenue, sector-wide shares such as Candid's 75% earned income mostly describe them rather than a typical charity. For the UK, the FAQ below shows how the income mix differs by size.

How nonprofit income differs around the world

Where nonprofits get their money depends strongly on where they work: in a Johns Hopkins study of 32 countries, fees made up 62% of nonprofit revenue in developing countries against 45% in developed ones, while government provided 48% in developed countries and only 22% in developing ones (Johns Hopkins). Those figures date from the late 1990s, but recent country data shows the same contrast between government-funded, fee-funded and foreign-funded sectors.

The examples below are single countries or surveys, not continental averages.

• Europe. In nine welfare-partnership countries, mostly in Western Europe, government provided 57.6% of nonprofit revenue, 64.3% in Germany (1990s data). UK charities now get 48% from the public and 26% from government (2021/22) (Civil Society).
• Africa. Donors in Africa give the largest share of their income of any continent: 1.54%, against a global average of 1.04%, with Nigeria top at 2.83% (CAF World Giving Report 2025, via Africa Solutions Media Hub). Most of it goes directly to people in need (55%) or through religious channels (40%) (Rockefeller Philanthropy Advisors). Registered NGOs often rely on foreign money: 88% of the Ksh166 billion Kenya's NGOs received in 2018/19 came from abroad (UNDP Kenya).
• Asia. In India, corporate social spending is a legal obligation: the Companies Act requires qualifying companies to spend at least 2% of their average net profit from the previous three years on corporate social responsibility (Factly).
• Latin America. In the Johns Hopkins study, fees made up an especially large share of nonprofit income in Brazil, Mexico, Argentina, Colombia and Peru. Many also rely on international cooperation: in a 2025 ICNL consultation, all 20 partner organisations from 10 countries said recent international funding cuts hit them, 77% moderately to severely.
• Oceania. Australian charities reported AUD 222 billion in revenue in 2023, of which AUD 18.9 billion came from donations and bequests, including a single gift of AUD 4.9 billion (ACNC).

Can nonprofits make a profit?

Yes, a nonprofit can take in more than it spends, but it cannot distribute that surplus: under US law, no part of a 501(c)(3) organisation's net earnings may benefit a private shareholder or individual. The surplus stays in the organisation, usually as reserves or to fund future work.

What happens to a nonprofit's profit is set by the IRS ban on private inurement (IRS), and that rule explains the name: "nonprofit" describes what happens to the money, not whether there is any. The National Council of Nonprofits calls the term a misnomer and says nonprofits should aim for some positive revenue to build a reserve fund, which makes a surplus a sign of sustainability rather than greed (National Council of Nonprofits).

Many charities end the year in deficit. Following the same charities over four years, GiveRadar found that 41.4% of US public charities filing the Form 990 and 43.9% of charities in England and Wales spent more than their income in FY2024, up from 25.9% and 31.1% in FY2021. A deficit year is not wrongdoing: charities draw on reserves, spend a multi-year grant received in one year, or absorb inflation. On a US Form 990, the result appears on Part I line 19, revenue less expenses.

Do nonprofits pay tax on the money they make?

In the United States, income from a nonprofit's exempt activities is generally not taxed, but profit from a trade or business that is regularly carried on and not substantially related to its exempt purpose is subject to unrelated business income tax. Other countries apply their own rules, so the same activity can be treated differently elsewhere.

The IRS uses these three conditions as its test for unrelated business income (IRS). The Form 990 reports this revenue separately, on Part I line 7a and in column C of Part VIII. This is general information, not tax advice.

How do nonprofits pay their employees?

Nonprofits pay salaries out of their revenue, like any organisation: wages are an operating cost, covered by donations, grants, fees and other income. On a US Form 990, salaries, other compensation and employee benefits are reported as their own expense line.

When people ask how nonprofits make money to pay employees, the answer is that there is no separate source: salaries come out of the same donations, grants and fees as everything else. About 12.5 million people work for US nonprofits (Candid).

Paying staff is not a sign of waste: the National Council of Nonprofits stresses that operating costs such as salaries and rent are essential to delivering a mission (National Council of Nonprofits). For more on this, see what the overhead ratio does and does not tell you.

Can the founder of a nonprofit get paid?

Yes. A founder who works for the nonprofit, for example as executive director, can receive a salary, but it must be reasonable compensation for the work and gives no ownership stake or right to the surplus.

Nobody owns a nonprofit: under US rules, a 501(c)(3) organisation may not be run for the benefit of private interests such as its creator or the creator's family (IRS).

The Form 990 asks whether the top official's pay was set through review and approval by independent persons, using comparability data (Part VI line 15). Officer and key employee pay is public in Part VII, with extra detail on Schedule J when someone's total pay exceeds USD 150,000 (IRS Form 990). As a benchmark, the median nonprofit CEO earned USD 110,000 in 2023, a median across organisations of all sizes (Candid).

Board members are a different matter: most US nonprofits have board members who serve as volunteers, although paying them is legally permissible under certain conditions (BoardSource). For anyone thinking of starting a nonprofit, there is also a practical limit: a salary can only be paid from income the organisation actually raises.

How to see where a specific charity's money comes from

Look up the charity's latest annual filing with its national regulator: in the United States that is the Form 990, where Part I lines 8 to 12 show contributions and grants, program service revenue, investment income, other revenue and the total. Compare the current year with the prior year column and with line 19, revenue less expenses, to see whether income is stable and whether the charity ran a surplus or a deficit.

1. Find the charity's registration number. In the United States this is the EIN.
2. Open its latest annual filing. You can look up a charity's Form 990 for free.
3. Read the revenue lines in Part I, lines 8 to 12.
4. Compare the current year with the prior year column.
5. Check line 19, revenue less expenses.

Smaller US organisations file the shorter 990-EZ or the 990-N e-Postcard, and the 990-N contains no financial figures. Outside the United States, regulators publish annual returns with different levels of detail, so what you can see depends on the country.

GiveRadar profiles are built from these official filings. For US charities they currently show total revenue and expenses, not the split by source, so open the Form 990 itself for that. Once you know where the money comes from, you can also check whether a charity is legitimate.

You can look up any charity's filings and reported income for free on GiveRadar.