Nonprofits are fueled by tax-deductible donations—cash from individuals, public grant funding, or money from foundations. As of 2010, nearly 1.3 million 501(c)(3) organizations were registered with the IRS; they raise more than $300 billion in charitable donations a year.
The Classic Example
The American Heart Association was founded in 1924 by six cardiologists seeking to prove that getting a diagnosis of heart disease wasn't the death sentence people assumed it was. In 1948, the association got smart about cause marketing, making its debut as a sponsor on the popular radio show Truth or Consequences. The partnership yielded $1.75 million in donations and propelled the organization into the national consciousness. The American Heart Association continues to use celebrity endorsements, corporate sponsorships, and other high-profile events to secure its spot as one of the country's leading public health education nonprofits. It took in nearly $510 million in public contributions in 2010.
The Model Works Best When
1. The user cannot pay.