August 8, 2018

What’s the Best Way to Earn Nonprofit Income?

man selling an earned revenue item at a nonprofitI listened to 50 promises at the end of a three-day earned revenue event. During it, participants heard dozens of inspirational success stories. They learned about the infrastructure behind success. They’d completed plans for their nonprofits. Now I prompted them to publicly commit to using them.

When it was my turn, I promised to write this article about nonprofits’ roadblocks on earned revenue journeys. Below you’ll read about the most common barriers I’ve seen in 20 years of advising nonprofits. These are the places where nonprofits bust fenders.

Mental Roadblocks to Earned Income

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.

Growing income is essential no matter your past or wishing that it wasn’t so. If you’re not actively increasing it, you’re shrinking. Your nonprofit is responsible for income growth. Without it, you lose ground to inflation. Growth for inflation allows you to stay even. Growth beyond inflation creates long-term viability greater opportunities, and, counterintuitively, 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 attack 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 lose 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, I’ve seen more nonprofit Internet phantoms in the last year 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. Savvy nonprofits recognize the barrier and develop detours. Brilliant nonprofits transform obstacles 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 nonprofit leaders who were successfully generating income, and all of them encountered barriers. The interviews only scratched the surface of possibilities by reading the text, you’ll encounter amazing, creative examples of earned income 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 AFP 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.

Earned Revenue Process Challenges

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. Too few ideas indicate you have unexplored options. Every viable nonprofit has at least ten —maybe even thirty opportunities to earn income. Generate them. Are you 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 Earned Revenue Start-up Resources

Beware of the supersize-me perspective that stalls zillions of earned revenue opportunities. Supersized results from visualizing massive, incredible, 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 required. 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 subsequent 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. I often start with where I want to go and work my way backward. 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 tedious complicated, 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 your comfort zone. Peggy changed her process after the test grades came out 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 blast them to smithereens and grow earned revenue.

For more answers, check out this Nonprofit  CEO Library.

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Karen Eber Davis

Karen Eber Davis provides customized advising and coaching around nonprofit strategy and board development. People leaders hire her to bring clarity to sticky situations, break through barriers that seem insurmountable, and align people for better futures. She is the author of 7 Nonprofit Income Streams and Let's Raise Nonprofit Millions Together.


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