Funding and Financial Management in NGOs in the USA

This chapter provides an in-depth analysis of nonprofit financial management and funding mechanisms within nongovernmental organizations (NGOs), with a focus on entities operating in multilevel governance systems in the United States of America. Based on secondary data from government reports, Internal Revenue Service data, Joint Committee on Taxation reports, and the National Council of Nonprofits data, the chapter employs a comparative and analytical approach to assess financial practices and funding patterns. It examines key financial management activities – including budgeting, forecasting, cash management, and maintaining adequate reserves – and evaluates how diverse funding sources, such as governmental grants, private philanthropy, and earned income, influence organizational behavior, programmatic priorities, and stakeholder relationships. The chapter also examines critical financial challenges, including revenue instability, regulatory compliance, and budgeting discrepancies. Additionally, it highlights the impact of tax policies and governmental regulations on funding and financial management in NGOs in the USA.