Rethinking Revenue for Nonprofits: Introduction
When was the last time you thought deeply about the funding model for your nonprofit? Many small-to-medium sized nonprofits rely mainly on grants and government reimbursements to pay their bills. It’s a never-ending cycle of balancing what’s coming in with what’s going out, and when a grant runs out or isn’t renewed at a previous level, it causes big issues! Understanding the type of funding model you currently have is the first step in rethinking your revenue.
Your organization is driven by a mission that has a social impact, and much like the private sector you are producing a good or service that is solving a problem and creating values for others. In order to solve your problem better and create more value – you have to increase your revenue and often times, scale, just like businesses! A good business has a business plan, that documents and forecasts all of the money coming into and out of the organization.
The nonprofit sector has a lot to learn from the private sector about building sustainable financial models and diversifying their revenue streams. One key ingredient in this is getting your organization’s leadership on board with investing – just like a business would.
When you invest time, money, and talent in the people, technology, marketing, and customer service – you will start to see big gains in your organization’s ability to make a deeper social impact. Getting super clear on the return on investment (ROI) in time, money and talent in your organization will bring you to new heights.This series walks nonprofits through a four-point framework designed to help your organization rewire how it thinks about revenue. Use our 30 question revenue guide to start building the capacity to make sound organizational decisions that balance opportunity and return on investment with the impact you are trying to make, and come back each for a deep dive into how to rethink your revenue. For a shortcut without all the context – check out 30 Questions to help you Rethink Your Revenue below.
Part 1: Rethinking Nonprofit Revenue – Making Money
First up in our Rethinking Nonprofit Revenue Series is making money. Every organization needs money to stay afloat, and nonprofit organizations are no exception. The way nonprofits generate the majority of their revenue oftentimes depends on the nature of the nonprofit itself (Girl Scout cookies, anyone?). While you may have success with your organization’s tried and true revenue generation and fundraising efforts, it is important to revisit these tactics and strategies on a regular basis to ensure your organization is bringing in every possible dollar.
How long has it been since your nonprofit organization has done a complete audit or review of existing revenue streams, and developed a strategy to increase those revenue streams? Read on for 9 additional questions that will help make your nonprofit organization more money!
9 Questions to Make Your Nonprofit More Money
Are you leveraging all of your current revenue sources to the fullest extent?
Have you done a national scan of all of the grants available to your organization?
Are the core services that you provide able to be monetized?
Are their back-end services that you could scale and monetize to offset your costs?
Are there processes you have mastered that you could teach to the field?
Where are the areas for largest revenue growth potential?
Do you have a business plan?
Have you assessed whether a customer, employee, or product revenue integration model are good fits for your organization?
Are you 100% confident you are getting reimbursed at the proper rate?
If answering these nine questions seems like too much work for your organization – remember that you must invest your resources (time, money and talent) in order to increase them. There are no sustainable shortcuts here.
More on Rethinking Nonprofit Revenue:
Sangfroid Strategy works with organizations to help them learn from where they’ve been, define where they want to go, figure out how to get there, and bring their team on the journey with them! If you want to get serious about Rethinking your Revenue – contact our founder, Heather Lenz, at email@example.com.