Define Up to 8 Streams of Income and Assign Someone to Each
When it comes to funding your tax-exempt enterprise, it’s time to put on your business revenue hat. All too often nonprofit leaders and teams compromise their potential by the trap of scarcity thinking, when, in fact, it’s time to move into an abundance mentality. No, our enterprise doesn’t exist purely for profit, however, there must be profit (positive cash generation) in order to pay the bills, marketing for the organization, hire the best staff, and have funding for infrastructure improvement.
Responsible leaders think in terms of generating capital in order to fully achieve the mission of the organization. In fact, cash generation is the result of bringing value to people. Extra cash in the nonprofit world isn’t typically labeled as profit. We must however lead with financial responsibility.
Here are the eight basic sources of revenue that any nonprofit can activate over time starting with one and then adding more as each source is managed and productive. These sources are as follows:
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Donations – Giving from individual donors typically makes up 70 to 80% of an organization’s income.
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Grants – Foundations award grants to create results they want to see. Align your request with their intent and receive the award. It’s not ongoing funding.
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Sponsorships – Businesses want to associate their brand with your work so the allot some marketing funds to have their name visible to your network.
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In-Kind – This is not actually cash income. It is, however free goods and services that save cash for you.
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Partner Programs – Churches and service clubs give money to community projects that they don’t actually implement. Partner your work with their funding.
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Events – Events highlight your work and create relationships with your supporters and reach new people. These events should also create income.
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Wills & Bequests – People like to remember an organization in their will and sometimes have a project named in their honor. Consult a professional for this.
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Business Earned Income – Many retail businesses award affiliate commissions to nonprofits that register with them and send customers their way.
Having only one source of income means that you will have a 100% chance of failing financially. Start with one source of income and add two more quickly. Then add other sources as you are able to manage those you’ve already started. This is a good opportunity for board members to get involved.
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