Debunking Myths About Nonprofits and Their Funding

Do you know how nonprofit organizations sustain themselves financially? Nonprofit organizations are the backbone of society. They work day and night to solve social problems and make this world a better place. Even with all their noble efforts, many misconceptions still surround them, especially in terms of their funding. In this blog post, we will be debunking some of the most common myths surrounding nonprofits and their funding.

Myth 1: Nonprofits rely solely on donations

One of the most pervasive myths surrounding nonprofits is that they are primarily funded by donations. While donations are a crucial funding source for nonprofits, it is by no means the only one. Grants from governments and private organizations through the corporate CSR program, clients, sponsorships, and other sources all contribute to the funding of nonprofits. The organization barefootedu, for example, partners with government and private organizations to provide underprivileged children with access to education.

Myth 2: Nonprofits do not need to be financially accountable

Nonprofits are often believed to lack financial accountability for their actions. But, in reality, nonprofits are responsible to a whole host of people – from donors, volunteers, governing boards, to the general public and now even to the Government with the level of accounting requisites being added each year. It’s not just about being charitable, but being accountable too. That’s why NGOs like Latika Roy Foundation, amongst many others, maintain transparency by declaring their donors and funds received on their official websites.

Myth 3: Nonprofits should not operate like a business

Nonprofits shouldn’t shy away from operating like a business if it helps them achieve their goal of serving the public. Financial management, operational efficiency, HR systems, high level tech integration, marketing strategies etc. can make a significant difference in operational efficiency. Take Aravind Eye Hospital, for example. It is an Indian charitable organization that provides eye care services to people in rural parts of India. They maintain a business model and reinvest their revenues that come from the main hospital to expand their outreach by opening more charitable hospitals.

Myth 4: Only large nonprofits receive funding

There is a common misconception that only large, established NGOs receive funding. Small NGOs will also find funding from private foundations or community trusts. By creating original compelling stories about your non-profit, your impact on the community, or your unique approach to a social issue, you can bring in funding from sources that may not be on your radar. Platforms like Let It Count vet social cause projects ensuring transparency and efficacy while saving time and effort. Thus, being the outsourced fundraising arm for charities with authentic and innovative ideas.

Myth 5: Crowdfunding is only for individuals

Another problematic myth is that crowdfunding platforms are only for individuals seeking to raise funds for specific causes or projects. However, crowdfunding can be used by nonprofits to secure funding for a wide range of initiatives. Online crowdfunding platforms like Milaap, and Goonj, work towards increasing the awareness of donation-based funding. For example – GiveIndia’s platform lists NGOs that work in various sectors, including education, healthcare, and disaster relief. So, crowdfunding can be a useful tool for nonprofits to secure funding for a variety of important causes.

Myth 6: Nonprofits do not need a strategic plan

Having a strategic planning framework is necessary for nonprofits. The strategic plan outlines the mission, vision, core values, digital strategy, fundraising strategy, and other critical components that the NGO aims to achieve in the long term. By having a clear plan and supporting budget in place, NGOs can attract more funding sources and increase their impact on social causes.

Funding through CSR

Corporate social responsibility (CSR) is another major source of nonprofit funding in India. The Indian government made it mandatory for companies to spend 2% of their profits on CSR under The Companies Act, 2013. NGOs work with corporations to implement social activities that match the CSR area, benefiting both the non-profit and corporations.

Myth: CSR is just another way for businesses to make a profit while looking good in the eyes of society.

While it’s true that CSR can positively impact a company’s reputation, its primary focus is to ensure that businesses act responsibly and sustainably towards society and the environment. It’s not just about making a profit – it’s about making a positive impact. Some companies even invest in CSR initiatives that may not directly benefit their bottom line, but prioritize making a positive difference in society.


In conclusion, the myths surrounding nonprofit funding can be detrimental to the growth and sustainability of organizations. By debunking these misconceptions, we can empower nonprofits to make informed decisions and secure the necessary resources to fulfill their missions. Platforms like Let It Count debunk these myths by providing a transparent platform for fundraising that eases the process for both recipient’s and donors’ ends.


Donations are a crucial source of funding for nonprofits, but they are not the only one. Nonprofits receive funding from various sources, including government and private organizations, corporates, sponsorships, and more.
Yes, nonprofits are accountable to their donors, government, volunteers, governing boards, and the public. Despite being a charitable organization, nonprofits should maintain complete financial accountability and transparency.
Yes, crowdfunding platforms can be used by nonprofits to secure funding for a wide range of initiatives. Crowdfunding platforms like Milaap, Goonj, and GiveIndia work towards increasing awareness of donation-based funding.
Let It Count is a boutique platform that connects unique and high social impact projects (NGOs/ charities) to donors. The platform focuses on an intense due diligence process before empanelment of projects to ensure transparency, efficacy and trust for a donor. In turn it helps saving time and effort for charities with authentic and innovative ideas to increase their chances of funding.