Make More Money: Evaluate Donations and Revenue Options in Advance

Your Ingenious Nonprofit
April 2014
Karen Eber Davis

You have several lists of potential major gift donors. You have limited time to invest pursuing those gifts. Where will you invest your time?

  • One list includes people like Mrs. Garcia. She has donated $100 every year for more than a decade.
  • Mr. Roberts and his cohorts donated $5,000 or more, five years ago. Since then, they’ve given $200 or less each year.
  • A third list includes donors who gave $20,000 or more once, most associated with your building campaign five years ago.

It’s also likely you have a collection of earned revenue opportunities, special events options, and corporate contacts—how do you determine where to focus your finite resources?

All nonprofits stand in front of streams of income opportunities. It’s like being in a water park, standing on the bank as inner tubes float past. Which ones do you grab? You watch for a minute. You pass on the flaccid rings. You reject those near the rowdy swimmers pushing others off. As you watch, you establish criteria for what you want.

Establish your own criteria before you pursue revenue opportunities. Focus on your best options. It’s counterproductive to pursue every existing opportunity to make money. Nonprofits that do so become exhausted, not more sustainable.

What Are Criteria? Standards to judge options. The best are based on proven nonprofit standards that have been fine-tuned by your experiences. The standard criteria may be to make ten appointments. Your experience may be that you move faster by making nine or twelve.

What does criteria look like? They are short statements or questions. They are measurable. Was the criterion met or not?

“We could make a lot of money selling affinity credit cards,” shared an employee of National Association of Accounting in the book, 7 Measures of Success, “but we don’t do that because it doesn’t benefit our constituency.” The criterion: Programs must benefit our constituency. The measure: Does it benefit our constituency or not?

To be useful, your criteria needs to be realistic. A hands-on science museum faced a shortfall. They invited supporters and staff to identify ways to close the pending income gap. The museum’s leaders asked for ideas that met these criteria:

  • Produce income to close the budget gap.
  • Involve minimal start-up funds.
  • Require low staff involvement.
  • Be piloted within sixty days.

The group produces ten ideas; three succeeded moderately well and one was very successful. The criteria were brief, quantifiable, sensible, and in the end, lucrative.

Setting criteria or finding ideas to fit within them may look easy. Usually it’s not —at least at first. This kind of big picture work requires disciplined thinking and sorting. Weighing options often requires you to consider values and beliefs. Even using criteria implies you will leave some worthy choices behind—not always a reality people with pet ideas want to face.

Finally, develop just a handful of criteria.  More is less. Too many criteria lead to rejection of all options. If the options are all bad, this is smart. It can also be a way to avoid action. You let all the inner tubes pass by and never enjoy the ride.

What Are The Rewards of Using Criteria? Criteria are clear tests. Ideas that don’t fit can be discarded. Instead of discussing ill-fitting ideas for hours, the ideas can be placed on the back burner or trashed. If your board spends hours making decisions, criteria can easily halve board meetings by using criteria. If you establish criteria before decision-making as your go-to approach, over time your board and staff will be faster at exploring ideas, evaluating them, and making thoughtful decisions.

Even if you use them by yourself, criteria improve your ability to make logical decisions and reduce emotional ones. When used with an analysis of success and failure, criteria help you to replicate triumphs and avoid repeating mistakes. Once you identify patterns of success you can add criterion to help you identify the most profitable option to pursue.

How to Start Using Criteria: If you’re not using criteria to make your decisions, a great starting place is to use them to evaluate grant opportunities. Here they save anyone from having to take a pen to paper or make keystrokes on an application with poor funding odds.

An agency that worked to prevent homelessness and to serve people experiencing it started with these three criteria:

  • The likelihood of getting grant funds is high.
  • The opportunity aligns with our mission and vision.
  • Our request easily matches the donor’s goals.

When they faced multiple opportunities but time challenges, they added additional criterion.

Make More Money: Your nonprofit has more opportunities to generate revenue and donations than it has time to pursue. To find the ones that provide the most returns, both now and in the long term, generate criteria to evaluate your choices. Whether it is donors, grant opportunities, earned revenue options, or other sources, nonprofits do have a great number of opportunities to obtain more income.

Get more income. Before you get into the water, use criteria to test your opportunities.

How to Draft Criteria

1. In all likelihood you already have some criteria in your head. Jot these down.

2. Write a list of the outcomes you want from the decision. What criteria do the outcomes suggest?

2. Consider what you would never do. The opposite might be a criterion.

3. Use your draft criteria to evaluate a few options. Do the results   make sense? Explore using other criteria. Tease them out and refine your draft.

4. Make your criteria realistic, short, measurable, and few.