Key Term

What is Short-Term Funding?

Definition

Short-term funding refers to financial resources that are provided to charitable organizations for a limited time period, typically lasting less than one year. These funds are often restricted to specific projects, programs, or operational needs and must be used within the designated timeframe. Short-term funding can come from various sources, including grants, individual donations, corporate sponsorships, or fundraising events.

Significance

Short-term funding plays a crucial role in the charitable sector but presents both opportunities and challenges. While it enables organizations to launch immediate initiatives and respond to urgent needs, the temporary nature of these funds can make it difficult for charities to plan for long-term sustainability and impact. Organizations heavily dependent on short-term funding often face increased administrative burdens, potential cash flow issues, and the constant pressure to secure new funding sources. This has led many nonprofits to seek a balance between short-term and long-term funding strategies to ensure organizational stability and continued mission fulfillment.