Last month, in Nonprofits: The Stitching That Holds a Community Together, we talked about different types of nonprofits and gave examples of various ways nonprofits get money to operate. In this article, we’ll explain where Habitat for Humanity, specifically our Jackson, MI Habitat, gets its funding.
Some nonprofits are positioned in communities as charities with lean operating budgets constantly needing your financial support to function. Others have renewable sources of revenue to support their mission. Over the several decades of Habitat’s existence, it’s developed a standard of revenue generation that leverages both.
Habitat’s Revenue Sources
Habitat for Humanity operates from the model of providing opportunities for homeownership in a way that can be sustainable for both the new homeowner and for Habitat.
Habitat for Humanity has three main sources of revenue:
Donations and grants
Donations and Grants
Like many nonprofits, Habitat for Humanity relies heavily on the generous financial support of individuals, foundations, and companies in our community. Every dollar donated directly to Greater Jackson Habitat for Humanity goes toward the mission of giving people in Jackson County a hand up toward self sufficiency through housing stability.
Habitat’s Homeowner Program provides opportunities for people in Jackson County to work toward homeownership through financial and homebuyer education, down payment assistance, and obtaining an affordable mortgage.
In addition to donations from individuals and foundations, many companies and government agencies offer grants to nonprofits who align with their community support initiatives. Habitat is fortunate to qualify for and receive grants throughout the year.
Most Habitat for Humanity affiliates around the country have a ReStore, which is a resale store that receives donations of various types of home goods from people in their community and sells them for a profit. This profit goes directly toward Habitat’s mission and supports the organization’s efforts to build and repair homes.
A secondary benefit of the ReStore is that it keeps gently used items from ending up in a landfill. The ReStore accepts gently used furniture, appliances, cabinets, building supplies and materials, hardware, tools, outdoor/patio items, some sporting goods, and other home related items.
Jackson’s ReStore is located at 251 W. Prospect St. Most years, ReStore revenue counts for approximately two thirds of Habitat’s operating revenue.
Habitat for Humanity builds with and sells to low to moderate income people with a mortgage that’s affordable for the buyer. In order to do this, we partner with government agencies and private industry to fill gaps that occur between what the buyer can afford and the value and cost to build the home.
When the home is complete, the buyer obtains a mortgage and purchases it. The money from the sale, plus any gap funding acquired, goes back into building the next house.
Self Sufficiency and the Local Economy
In order to ensure longevity for the organization, it’s important for Habitat to have revenue sources that are “renewable”, meaning the “product” produces revenue that seeds funding for future products. It’s a healthy business model, and it means we can truly be a community partner that contributes to the health of the community overall instead of only to its beneficiaries.
The way Habitat does business brings income into the communities it serves. We talk about that in detail in this article: Beyond the House. But to sum it up, the work we do helps create jobs, supports the local economy, and brings tax revenue to cities, townships, and counties in the form of property taxes paid by Habitat homeowners.
We’re grateful for individuals, families, companies, and government agencies who partner with us to help ensure people in Jackson have a decent, safe, affordable place to call home. Even though Habitat’s revenue building model is self sustaining and responsible, we couldn’t do what we do without “the village”.