The Power of Listening: Diversifying Revenue Streams for Nonprofits
In today's rapidly changing philanthropic landscape, nonprofit organizations face increasing challenges in securing sustainable funding for their missions. While traditional fundraising methods remain important, nonprofits must adapt to new strategies to stay ahead.
One crucial aspect is listening to donors and understanding their preferences. By actively engaging with supporters and diversifying revenue streams, nonprofits can create a more stable financial foundation. It necessary to listen to donors and introduce new revenue streams, such as planned giving, monthly recurring giving, special events and gifts from appreciated stock or donor-advised funds.
Nonprofits thrive on the generosity of their supporters, and it is crucial to establish strong relationships with donors. Listening to donors involves understanding their motivations, preferences and expectations. By actively engaging in conversations and soliciting feedback, nonprofits can gather valuable insights that inform their fundraising strategies. Conducting a listening tour with donors during these uncertain economic times can help you identify areas where donors can not only help but prefer to help.
Here are four tactics that can help your nonprofit diversify its revenue streams.
1. Planned Giving
Planned giving is a powerful tool for nonprofits seeking to secure long-term financial stability. By encouraging supporters to include the organization in their estate plans, nonprofits can benefit from significant contributions in the future. Engaging in open and transparent conversations about planned giving allows nonprofits to educate donors about the impact their bequests can have and provide guidance on the various options available.
Establishing a planned giving program and promoting it through newsletters, donor meetings and dedicated events can help maximize the potential of this revenue stream. And, yes, establishing a planned giving program does take time. What is the best time to start a planned giving program? Answer: 20 years ago. What is the very next best time? Answer: Today.
2. Monthly Recurring Giving
In an era where subscription-based models dominate various industries and have widespread acceptance, nonprofits can harness the power of monthly recurring giving to ensure a steady and predictable stream of revenue. By offering donors the option to make small monthly contributions, nonprofits can create a sense of long-term partnership and financial stability.
Regular communication and updates about the impact of recurring donations are essential in nurturing this relationship. Utilizing online tech platforms and leveraging social media channels can simplify the process and make recurring giving more accessible to donors.
3. Special Events
Hosting special events is an excellent way for nonprofits to engage donors, create awareness and raise funds simultaneously. Events provide a platform for supporters to connect with the organization's cause in a meaningful and interactive way. Whether it's a gala, charity auction or community fundraiser, these events offer an opportunity to cultivate relationships with both existing and potential donors.
Nonprofits should leverage their networks, engage volunteers and collaborate with local businesses to maximize the impact of these events. Finally, as restrictions from COVID-19 fade, now is an excellent time to restart or even expand special events that people missed during the last several years.
4. Gifts From Appreciated Stock or Donor Advised Funds
Many donors possess assets beyond traditional cash donations, such as appreciated stocks or donor-advised funds (DAFs). Nonprofits can explore these avenues by promoting the benefits of donating appreciated assets and providing guidance on the process.
By facilitating these types of contributions, nonprofits not only offer tax advantages to donors but also secure substantial financial support. Establishing partnerships with financial advisers or wealth management firms can help nonprofits navigate the complexities of such transactions.
To ensure their long-term sustainability, nonprofits must actively listen to their donors and adapt their fundraising strategies accordingly. By diversifying revenue streams, nonprofits can establish a robust financial foundation that mitigates risks and empowers them to make a greater impact on their mission.
Planned giving, monthly recurring giving, special events, and gifts from appreciated stock or donor-advised funds are just a few examples of the innovative approaches nonprofits can adopt. By embracing these strategies and consistently engaging with their supporters, nonprofits can forge stronger relationships, foster donor loyalty, and secure the resources needed to create lasting change in our communities.
The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.
Related story: 6 Steps to Establishing a Donor-Advised Fund Strategy
Jon Biedermann is the vice president of fundraising strategy for Community Brands. With more than 25 years of nonprofit industry experience, Jon has developed several fundraising tech platforms that have served more than 50,000 nonprofits. He also volunteers at the local and national level and is the current treasurer of The Giving Institute, as well as the co-founder and immediate past chair of the Fundraising Effectiveness Project, a program of the Association of Fundraising Professionals.