I listened to 50 promises. It was the end of a three-day event about earned revenue opportunities. During it, participants heard dozens of inspirational success stories. They learned about the infrastructure behind success. They’d completed plans for their nonprofits. Now with my prompt, they publicly committed to use them.
When it was my turn, I promised to write about the roadblocks nonprofits face on their earned revenue journeys. If your nonprofit seeks more earned revenue, then just as with any journey, knowing about roadblocks in advance can help you to avoid wipeouts. This article shares the most common barriers I’ve seen in 20 twenty years of advising nonprofits. These are the places where nonprofits
bust their fenders.
The following roadblocks exist between people’s ears, but they’re big enough to stop semi-trailers short. Blow them up by replacing tired, old, habitual thoughts with clear thinking.
#1: Income isn’t our problem
No matter your past or wishing that it wasn’t so, growing income is essential. If you’re not actively growing it, you’re shrinking. Your nonprofit is responsible for income growth. Without it you loose ground to inflation. Growth for inflation allows you stay even. Growth beyond inflation creates long-term viability, greater opportunities, and, counter intuitively, it simplifies future income growth.
The mindset that income isn’t your responsibility or is beneath you may stem from your founding DNA. Some nonprofits founded to right wrongs or solve common needs received initial income from others. Even if your founding income continues and remains secure, income growth belongs to you.
Hold this thought: Our income is our nonprofit’s responsibility.
#2: We have income challenges. We’ll deal later.
“It will get better. It’s not that bad. We’ve survived worse before.” Nonprofit risk aversion lies at the heart of these thoughts. After all, if you don’t act, no one will criticize your specific actions. Lack of action guarantees your rogue board member or a picky funder won’t criticize an expense that yields minimal immediate returns. Of course, lack of action assures you will not grow income. (Unfortunately the critics plus others will then criticize you for lack of leadership for not doing anything.)
Healthy nonprofits collect more income opportunities than those in downward spirals. If your nonprofit continues to wait and shrink, you or your successor will close its doors. People will loose their jobs. Your customers will not receive services. Your website will disappear but your Internet shadow will remain. Can this happen? After two decades of work, in the last year I’ve seen more nonprofit Internet phantoms than ever.
Hold this thought: Now is the perfect time to grow income.
# 3. Is Earned Revenue Possible for Us?
Life is a broken-winged butterfly. No one succeeds except with handicaps. Every nonprofit faces at least one seemingly impossible barrier to income growth. Smart nonprofits recognize the barrier and develop detours. Brilliant nonprofits transform barriers into advantages, like the Houston Foodbank’s strategy to maximize volunteer labor and in turn grow income.
While writing 7 Nonprofit Income Streams: Open the Floodgates to Sustainability, I had the privilege of interviewing 75 nonprofits leaders who were successfully generating income, and all of them encountered barriers. The interviews only scratched the surface of possibilities, but reading the text you’ll encounter amazing, creative solutions that you can adapt and use to inspire your imagination. Can your nonprofit obtain more income? Yes! Yes! Yes! Seven streams exist for you to combine and choose from. Earned income is a logical choice. It’s the nonprofit sector’s largest stream.
Hold this thought: We can do it.
#4. Is It Worth It?
“You’re a corporation, not a happy group of volunteers,” Brian Foss at an Association of Fundraising Professional meeting in Ft. Lauderdale this spring.
After twenty years advising nonprofits, I can truly say that if I knew how hard being entrepreneurial was before I started, I might have chosen differently. Most founders of successful nonprofits will agree with me. It is hard. Nonetheless the journey continues. Overcome this doubt as often as necessary by remembering your vision. Is the vision worth it? Yes? Grow your income.
Hold this thought: The vision is worth any challenges faced on the journey.
Besides mental roadblocks, nonprofits crash into process challenges when they seek to grow earned income. Here are four:
A. Too Many (or Too Few) Ideas
Both too many and too few ideas belong to the creative process. (See this blog entry for more about the creative process.) Too few ideas indicate you have unexplored options. Every viable nonprofit has at least ten —maybe even thirty opportunities to earn income. Generate them. Stuck with six? Ask your peers. Seek out the advice of an expert. Collecting lots of ideas leads to the challenge of too many ideas. In this case, apply an objective decision-making process to analyze the options to identify the best choices.
B. Lack of Start-up Resources, such as Money and Time
Beware of the supersize-me perspective that stalls zillions of earned revenue opportunities. Supersize results from visualizing massive, wonderful, awe-inspiring, and grand undertakings. Instead, think mini. Think prototype. Find the smallest feasible increment to begin. (It’ll take just a few resources.) Then determine to obtain what you need to start. Invest. Take small risks. Make compromises, if needed. Good grief, you might even have to spend more on overhead!
C: We Don’t Know What To Do First.
Hmmm… is it possible that this roadblock isn’t about an unknown first step? Might it be fear disguised as missing next step knowledge? Check. Still stuck? Good enough. The way forward is to identify a strategy (i.e., obtain earned revenue by providing service x), and make a plan based on your best educated guess of how to get there. I often start with where I want to go and work my way backwards. Answer this: What’s the quickest way to get this opportunity to market? If I can find them, I seek out people who have done that—been there successfully—and inquire how they’d started.
D. Discipline and Perseverance.
After my first college exam, I bumped into a dorm mate. “What did you think about all those questions about measurement?” I asked fearing the worst— that she thought they were easy.
“Those? I skipped them. I didn’t study that part,” Peggy replied. “It was soooo boring.”
Will you quit when it’s boring, hard, or you encounter yet another roadblock unique to you? Of course not! By deciding that earning more income will require work that’s worth it, you’ve overcome the mental challenge associated with discipline and perseverance. To overcome the process challenge, book time to work on and think about your efforts, even if the work lies outside of your comfort zone. After the test grades came out, Peggy changed her process and gave me a run for the top grade on the next exam.
What’s the Quickest Way to Earn More Earned income?
Which roadblocks will impact you? Some groups face one or two. Others encounter all of them and more. Every roadblock offers a choice: you can throw up your hands and say, “It won’t work, it’s too hard, it’s boring,” or you can blast them to smithereens and grow earned revenue.