Thinking Beyond Grants: How to Thrive as a Nonprofit With Multiple Streams of Revenue
Perhaps there has never been a more difficult time to be a nonprofit than in today’s society. As the economy continues to change, nonprofits are experiencing a growing need at the same time their funding sources are declining.
It can be easy to get wrapped up in the stress of money when your nonprofit isn’t bringing in as much as needed to properly serve its demographics. In addition, nonprofits struggle with leadership and lack a strategic plan, forcing more than half of nonprofits to fail within just a few years, according to Forbes. For minority-led nonprofits, this number climbs significantly. However, there is no need to worry. With a plan suited to fit your nonprofit, you can take it from struggling to widely successful in no time.
As a nonprofit business specialist, coach and content developer, I have fine-tuned the art of helping churches and nonprofits secure the resources they need. Sometimes that comes in the form of grants, but grants alone won’t fund your organization. It takes multiple streams of revenue to make a nonprofit successful.
If you rely on only one, there is a good chance it may disappear or at least be cut, leaving your nonprofit in trouble. With diversified revenue, you can sleep at night knowing if one of those revenue streams gets hit, you have others to back it up. But how exactly do you get there?
Create a Roadmap
First, it is vital to make a plan. Every nonprofit should have an annual strategic plan that includes a funding plan. If you don’t have some sense of your mission, it is tricky to create a single stream of revenue, much less multiple. Create a road map to get you started in the right direction.
This means reevaluating your current finances, making plans for the future and considering what goals you would like to accomplish. It is important to take this step with your nonprofit’s board or any leaders within the organization.
Options for revenue streams include:
- Individual donations. Funding can come from individuals who resonate with your cause. Learn to connect with those around you by reaching out to the local media and creating a partnership for showcasing what your nonprofit is doing for the community. Social media also can be used to reach a large crowd. You could also host events and invite the public to take a firsthand look at what you do or participate in community events and get your face in front of crowds.
- Memberships. Some nonprofits are set up as membership programs. If your nonprofit is important to the daily life of those around you, consider setting up a membership where individuals donate to the cause that is fighting for them.
- Service fees. Service fees make up a surprisingly large part of funding for many nonprofits. For example, community health clinics may collect service fees as part of the health care it provides. Many nonprofits also have the option of connecting with government agencies to provide a service and, therefore, additional funding.
- Corporate donations. While many corporations do not provide cash donations, there are plenty who are willing to give in-kind donations. If you are that community health care clinic attempting to branch out, for example, a corporation might be willing to donate medical supplies.
These are just a few! It is important not only to have multiple streams of revenue, but different types as well. So, when government funding dries up, you still have private donations. Or when the economy falls and individual donors begin giving less, corporate sponsors or foundations are still providing funds.
Identifying the revenue stream was only the first step. Even with a solid plan in place, the path to diversification will not be an easy one. It takes time, resources and dedication on the part of the organization’s workers and volunteers.
You should have a timeline, with goals set up along the way. Implement procedures and budgets to make sure your nonprofit is staying on task. It won’t be easy, but by building sustainability your nonprofit can become financially successful in order to help others.
Assess and Adjust
So now you have clarified your mission and been effective in establishing multiple revenue streams. You are left floating on cloud nine — but be careful. Just like in a for-profit business, revenue streams can evolve with markets and the economy.
It is important to periodically take a step back and evaluate each funding source to make sure it is still what’s best for your nonprofit. This can be done monthly or quarterly — just make sure assessments are part of your nonprofit’s plan moving forward.
I have been given the opportunity to assist nonprofits in securing their own funding, finding their markets and making their marks in the world, and your nonprofit can find the same success with careful planning.
When you have the relief of no longer constantly worrying where the funding to help others will come from, you can turn your focus to following your true passion of renewing and revitalizing the community you serve.
Connie Bobo, CEO of Mind Your Mission, helps nonprofit organizations increase their sustainability and helps them secure long-term funding. She has helped dozens of churches and nonprofits increase their capacity, secure funding, and drive impact in their community. Click here to learn more about her transformational program.