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What Are the Different Types of Community Funding?

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  • Written By: Helen Akers
  • Edited By: Jessica Seminara
  • Last Modified Date: 16 September 2016
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Community funding primarily comes from a combination of government grants and private organizations known as foundations. Non-profit agencies rely heavily on community funding sources in order to complete projects and deliver services. While the majority of funding comes in the form of grants, there are additional types of funding known as subsidies, rebates, awards, initiatives and enhancement funds. In addition, grants might be designated for research, evaluation, education, administration, development or start-up costs.

National and local governments set aside a portion of their tax revenues for community funding. They distribute this funding in the form of grants to organizations that provide some sort of benefit or needed service to the community. For example, a non-profit agency doesn't typically receive revenue in the form of sales but must generate income from donations and outside sources. The agency might be a homeless shelter that provides assistance to families or a charitable organization that helps low-income residents become homeowners. In order to maintain operations and complete projects such as building a new home, these organizations apply for grants geared towards housing development and assistance.

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In addition to the government, private foundations are another significant source of community funding. Foundations are typically categorized as general, special purpose, corporate, family or community. When applying for private grant funding, an organization seeks foundations that are in agreement with its mission and activities in order to maximize the potential of being an award recipient. There are often specific criteria to follow when applying for grant funding, and different grants are designated for certain purposes.

Some grants are awarded to be used for research and development. Others might be designated to be used for training costs. There is usually a mutual benefit associated with the grant. For example, a government agency might financially support research that will possibly result in a cure for a deadly disease. The discovery of a vaccine would stimulate economic activity for the healthcare sector and remove the negative publicity burden from the government.

Private organizations might supply additional amounts of community funding through awards, rebates and initiatives. Rebates might exist to cover costs for improving public property. Initiatives could be supplied to non-profit organizations that invest time and resources towards environmental improvements in the community. This might be activity that the non-profit agency is not currently involved in but is looking to branch out into. Awards could be given to non-profit agencies as a result of their service to the community and the benefits their past projects provided to disadvantaged community members.

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