What are the Top Funded Nonprofit Sectors?

The nonprofit world is one that is always undergoing change, as many US nonprofits can currently attest to, with the sharp reduction in access to government funding. From year to year, nonprofit organizations will have to face new and continuing trends in grantmaking and funding.

If you’re new to the nonprofit scene, you might be curious as to what the landscape has looked like in recent years. Here we’ll go over what the largest nonprofit sectors are, and what all this information means for nonprofit funding.

The Top Funded Nonprofit Sectors

GrantStation has recently released our own survey on this topic, the State of Grantseeking. This is a great place to get started on understanding the current trends shaping grantwriting and grantmaking today. What nonprofit sectors tend to get the largest sources of funding can vary even within a fiscal year. However, per our own surveys, the following are the sectors that tend to get the largest share of revenue streams. If you’re new to nonprofits, it's a good idea to familiarize yourself with some of these.

Human Services

This sector doesn’t refer to funding the human resources department at your company. Rather, human services encompasses a wide range of different types of nonprofit that are all engaged in providing the necessities of life. This could include housing or access to food. As these are often matters of life or death, it is no surprise that human services have such urgency. The largest nonprofit in America by total revenue is Feeding America, as per most recent counts. Wherever necessities are necessary, human services nonprofits will be there.

Arts and Culture

We live in a time where art is rapidly being replaced by content. The distinction is this - art is the expression of a human, which an audience appreciates. Content is simply there to be consumed. The rise of AI has only accelerated the dominance of content, where consumers can simply generate content with no humans involved. In this environment, arts and culture must rely increasingly on public charities. The arts and culture space is quite diverse, but there are many prestigious subsectors (think performing arts, museums, etc.), that can often generate significant nonprofit revenue.

Youth Development

There are many nonprofits involved with initiatives that look to particularly target younger demographics. This category of charitable providers covers all kinds of purposes, from mental health to education. Anywhere that young people can be provided with support, there are community and private foundations ready to step in.

Health Care

The need for health care is an acute one across many areas of the world. As often a literal matter of life or death, it is no wonder that the health care sector often ranks highly in terms of funding and interest. Health Care nonprofits can work across all regions and sectors, from tackling pandemic preparedness to promoting healthy living.

Others

It must be pointed out that not all nonprofits fall neatly into one of these categories, and there is certainly a lot of overlap. For example, within human services, Housing and Shelter is one of the most significant sections, and is a significant nonprofit sector all its own. There are also many other sectors that earn significant funding, from individual donors or large grant providers, in particular education and community development. There are many other ways to slice the funding pie, but these are among the most relevant.

Why Some Sectors Get More Grants Than Others

So why exactly do some sectors get more grants than others? And within those sectors, why do certain charities get more advocacy and government grants? There are a few reasons to consider.

First is the broad appeal. Charity work should never be a popularity contest. But in the age of social media and short attention spans, being able to have a message that resonates and connects is an asset. Charities with easy to understand and emotionally resonant purposes have a leg up here. Not everyone has had to rely on disaster relief. But everyone has had to go to school, go to a hospital or find someplace to live.

Similarly, nonprofits that work in sectors with clear and measurable outcomes tend to have better retention from private and corporate giving. Showing improved test scores, lowering disease rates or meals provided by a food bank all help encourage future donation. Small nonprofits on the grow should take this lesson to heart - visible success breeds success!

There’s also the fact that nonprofits working in certain sectors have built-in advantage to fundraising capacity. Hospitals, universities and government agencies, for example, have a lot of capacity built into their infrastructure, and can make better use of a larger source of revenue, and chase more ambitious projects.

Tips for Nonprofits Seeking Funding

As mentioned above, visible progress tends to help drive greater interest in your nonprofit. This is true regardless of if your funders are private and community foundations, or even the federal government. Focusing on clearly outlining your outcomes and data helps make you more appealing to potential funders. It might seem a bit odd - wouldn’t funders want to help the nonprofits that look like they need help? But nonprofits in general aren’t hoarding their annual revenues, they’re spending them. And funders want to see that the spending is having a tangible effect. Help smarter, not harder - and make sure you can prove you are doing so.

Get Creating Looking for Funders

The process of seeking out grants online is often the bred and butter of many nonprofits. But don’t be afraid to look beyond the regular spaces. If you are working in a particular community, try to reach out within that community. Get creative. Can you partner with small businesses in your region for funding or marketing? Are there events that you can attend where you can accept donations? These are all great ways to combine visibility and funding.

There are also many other different types of nontraditional funders out there. Look into things such as corporate social responsibility programs, donor-advised funds or family foundations, as examples. These may be more open to niche missions. Local trade associations or civic partnerships are also places to look.

And if you are really struggling to get funding, why not try partnering with a larger organization? This can get you some essential visibility and contacts while you get established in your nonprofit area of expertise.

Stay True to Yourself

In the end, pursuing your mission should take priority over pursuing funding. Obviously, you need funding for your mission. But don’t let overthinking funding ideas start to overtake your original purpose. You want to perform your mission well, and then make it visible. Focus more on emphasizing your unique impact to funders. What can your nonprofit do that no others can?

When looking for grants, this means that well-aligned grants are more important than larger ones. Funders appreciate authenticity and focus in a nonprofit. Growth will come from strategy and success. No matter your sector, always keep your mission in mind!