Your nonprofit can obtain sustainable income. This list identifies twenty revenue opportunities and places where nonprofits leave money on the table. Which options are you missing?
Paying for products or services that you might obtain as in-kind gifts. One of my clients identified over $70,000 in opportunities or 9 percent of their budget.
Many nonprofits wait for the right timing to pursue new revenue streams. No one knows what tomorrow will bring. The river of opportunity flows now. Someday is not coming. Reach in and grasp the best opportunity you see.
Charities often accept free or low-cost opportunities when the best value comes from paying full price. It’s one thing to buy generic dish soap. It isn’t responsible to purchase generic expertise, whether it’s consulting or architectural services. With the first, if the service or product fails, you select a better alternative next week. With the second, you get generic results. You waste the community’s time, handicap your organization, and inevitably lose the money you can’t afford to lose.
Too often, the CEO and the Board delegate income development. Boards and CEOs need to lead revenue efforts and stay with them until the revenue stream is stable and growing. Asking a committee or development staff member to take it on is courting disaster.
While grants represent excellent opportunities to grow new efforts, purchase capital items, and fund one-time capacity-building efforts, they’re lousy for operating and repetitive expenses.
Donor burnout occurs because we don’t have enough donors. Our bad. Instead of worrying about asking your donors again for funds, focus your efforts on growing your donor base.
Most nonprofits focus primarily on their mission. In reality, nonprofits must generate mission, and 2. revenue, and 3. grow a community—every nonprofit’s triple bottom line. By focusing only on a mission, you lose income and its origins: community support from more and more people. Most nonprofits naturally grow more revenue when they increase the size of their fan base.
Many nonprofits are short on revenue because they fail to involve all staff in revenue development. Everyone has a role. Empower everyone. I recently worked with a Salvation Army—yes, this included helping a kitchen manager, program managers, and social workers understand how to generate income. They began the process feeling “spooked” and ended it feeling empowered, proactive, and encouraging their co-workers from other locales. (For more about getting all hands on deck, download a free chapter from Let’s Raise Nonprofit Millions Together.)
Too many nonprofits assume the nonprofit already maximized its earned income. Two commonly missed new opportunities? New customers and new services you might provide to your current customers. How about an existing opportunity? One of my customers hadn’t renewed its earned revenue contracts in over seven years.
Being closed to considering ways that you might charge current customers or members a fee—even hypothetically. Or, any other similar “rule” you have that starts, “We would never….” This mindset misses opportunities where clients and others would be delighted to buy a service or product from you if you offered it.
Many organizations try to solve challenges in-house that have flummoxed them for years when expert advice is available. Last month a national nonprofit shared a problem they’d fought for years. Before I left the building that day, I outlined a strategy to solve it. The mini-consult fee was less than 1 percent of what the challenge was costing them per year.
You need to connect the dots for people. You don’t want them to guess how to fall in love with your organization. For example, you hold an event for friends and donors and fail to share a follow-up plan that connects them to your next step. Development is a process. What’s the next action you want the recipient to take after you send your annual gift letter? Please don’t make them guess. Invite them to what’s next.
Don’t forget that you, too, are on a personal philanthropic journey. By understanding your learning how to give, you will better understand and relate with the donors you ask to give.
Some people really do think that you have a secret cash machine. When you fail to challenge mythical thinking about obtaining income, it costs you money. Your board and staff need to know that no mysterious cash machine exists—revenue results from strategic investment in ideas and disciplined work.
When you don’t educate and empower board members to be part of your resource generation team, this leaves them to blame the staff for income shortfalls out of ignorance. Besides, it would help if you had their wisdom and help to reach deep into the community to find your supporters.
You’re board member may be just beginning to get contributions. They likely have earned revenue expertise; you’re not tapping. Invite your board members with a business background to their knowledge.
When you fail to educate board members about why individuals donate, you reduce your revenue. The Center on Philanthropy at Indiana University identified these five motivators:
Did you notice what’s missing from this list? The needs of a nonprofit.
When you play “I see dead donors,” an exercise that involves believing that life would be easier if you only had another nonprofit’s advantages, you miss out. The grass is not greener in the arts, around pets, nonprofits that serve children, or in more desirable locations. (Leaders from those groups envy something about your donors.)
Many nonprofits err in hiring development staff based on the dollars the candidate earned elsewhere. Success depends on the cause, the case, the groundwork, and timing, and it’s a team effort. Unless you’re bringing in their team and cause, you’ll be disappointed by their efforts.
Too many dollars are lost because after a donor donates, nonprofits don’t provide donors with what they need and want, including to know that:
Renewing donors cost less money and energy than obtaining new donors.
Your nonprofit can obtain sustainable income.
Which opportunities are you missing? Which will you seek today?
To learn more about the 7 nonprofit income streams, download a free chapter or buy your copy on Amazon.
To read more about fundraising, check out this article: The 7 Drivers of Nonprofit Fundraising Success.
If you want to know even more about gaining more nonprofit revenue, please don’t hesitate to reach out. I’d love to guide you to help your nonprofit thrive. Schedule a time for a free discovery chat here.-Karen