Usually when someone asks "What's your income?" the answer that springs to mind is "None of your business!"

But when a funder asks you that question, they are wanting to know the annual revenue that is coming into your organization.

Some groups have said to me "But it really isn't income, because we spend it all on basic expenses." Yes, it is still income, just as your paycheck is income, even if you have already spent it before you got it!

Funders want to know your income for a variety of reasons:

1) It lets funders know how much money your organization is used to handling. If the most income you have handled in a year is $50,000, a funder is not likely to award you $500,000! At PetSmart Charities, we rarely will award an organization more than 30% of their annual income. Believe it or not, too much money all at once creates its own problems. (I know, you'd like to test that theory!)

2) Knowing your income helps funders understand your organization, how much staff you are capable of supporting, how much of your funding is probably available for discretionary purposes versus survival, and so on. It helps to paint a picture of where your organization is, thus helping funders determine if the use of funding that you are proposing is, in their opinion, an appropriate fit with your organization's capacity.

3) Some funders, like PetSmart Charities, have categories of grants which are only available to organizations at certain income levels. For instance, our spay/neuter fast track grants are only available to organizations with $100,000 or less in annual income. If your income spiked for one year only (an unusual bequest or grant), you can explain that to us, and ask to still be considered for a fast track grant.

So, the next time a funder asks your annual income, I hope you don't cringe at the question. Funders keep such information confidential, and will use the information to help guide your organization to a grant that is a good fit for you.