When looking at the state of nonprofits today, and how current trends may affect the long term, I am concerned about a few things. At the top of my list is the mix of revenue sources for social organizations. A focus on philanthropic dollars makes sense, and is part of the charitable mission. And securing some government grants is nice, too. But wouldn’t it be nice to have considerable unrestricted and renewable revenue to support the organization too? The idea of social enterprise has been around for decades.
Let’s explore the notion further.
Resource development includes earned revenue – that means some type of fee for service. And yet, many organizations report that more than 2/3 of their operating dollars come from donations and grants. No wonder they are all feeling such pressure! This may be a shift in thinking for many organizations in the social sector – it used to be common to have the perspective that good works should be free. And indeed, in many cases, the beneficiaries of critically needed programs are not in a position to pay for services. But what if you looked at it a little differently? What if you looked at the assets (facilities, products, programs, services, people) you already possess and start thinking about how you could leverage a different type of revenue? And in turn, possibly create a stronger ROI in terms of social impact, while reducing the need for donated funds.
Here are some questions to consider:
* What are we providing at no cost that could become a revenue stream ?
* What other assets, services, or execution advantages could we ‘sell’?
* How could we expand these areas of the organization?
* Is there opportunity to partner with another organization, create a new product arm of the business, etc.?
* Are these new ideas of how to do business consistent with mission and culture?
* Are we moving outside the rules of unrelated business income?
Some ideas which may come forth could relate to re-purposing facility space (could you rent out some rooms to other organizations too – for gatherings or even long term?), utilizing your staff experts to train others or provide consulting, selling merchandise, or creating an online membership which provides items of interest or VIP opportunities to members. And sliding scales are acceptable, too.
Strengthening your revenue sources can be fun! When it looks like there may be some possibilities to explore, pull the team together and see what might come out of a strategy session. You are looking for diverse thinking to get the most out of the discussion. There is also a lot to consider, and when you determine what direction makes the most sense for your organization, be sure to consult experts and lawyers to outline any parameters which you might not know exist.
If you would like help in getting started, let me know.