“If only we had enough money.” This common refrain can often be heard in the hallways of many nonprofits. While some people dream about a vacation or winning the lottery, I find myself dreaming about the day nonprofits will no longer need to say, “we can’t fund that”. ”That” refers to any number of programs, training, human resources and technology, to name but a few.
More funding translates into advancing your mission while at the same time building organizational resilience. I’ve written about this before in the context of technology and how use of a Constituent Relationship Management (CRM) system can strengthen donor loyalty and the financial stability of nonprofits.
Recently I came across an interesting technology platform (My Game Plan.org) that measures an organization’s resilience. Almost with a push of a button (not really that simple, but the required upfront data is not burdensome), a nonprofit can measure its organizational sustainability. This model focuses on procuring manageable outcomes quickly, versus spending too many consulting hours for an analysis. No more paralysis by analysis. Sounds intriguing!
The resilience measurement includes:
- Financial Management and Organizational Management
- Resource Generation
Although all of the above measurements are important, my business focus is on “Resource Generation” and/or what I like to call the “The Revenue Pie”. What follows is a brief discussion of revenue sources to consider, not just traditional fundraising campaigns, but a diversity of approaches that may help amplify your revenue pie.
Many slices and ingredients are best
Most nonprofits understand that it’s best to divide the revenue pie into many slices versus serving up the whole thing in one or two large pieces. Anyone eating the entire pie is likely to feel sick. A nonprofit will also suffer if reliant on only one or two funding sources. Many slices and thoughtful ingredients will result in more satisfaction for stakeholders and a reliable financial foundation for the nonprofit.
Draw a round circle.
Honestly. Make a visual representation of where your cash flow comes from. This pie chart should be easy to draw based on your working knowledge of critical revenue sources.
Be sure you slice your pie into percentages of total revenue with each piece representing sources such as:
- Government grants (local, state and federal);
- Foundations (individuals and corporate);
- Individuals (annual, major gifts, legacy);
- “Earned income”, like product and services, sales, memberships, fees;
- Other online/offline sources.
Examine each piece of the pie:
- Do you have enough slices (diversity)?
- What exactly does the plan look like for each funding source?
- Are all the ingredients for success in place?
- Is the revenue being generated reliable? An on-track with budget expectations?
- What simple changes can be made to assure success? Are you excelling at the basic deliverables for each segment? Incremental improvements such as automating a “Welcome” for all new donors may be all that is necessary.,
Pick what ingredients define success and share them with your board:
Create a dashboard that illustrates current funding relative to the plan. How many new donors have made a gift? What is the retention rate for your annual donors? Do you have new Foundation support? (For more ideas using dashboards as a way to provide relevant and updated information to a nonprofit board, please refer to “A Nonprofit Dashboard & Signal Light for Boards” by Jeanne Bell and Jan Masaoka of Blue Avocado.) A simple pie chart will also work with year-to-date results and actionable “to do’s” for improvement.
Changes to the pie
Sometimes a pie’s flavor needs improvement. This might mean addressing some current weaknesses in funding. Although conversations about expenses and/or capacity-building can be difficult to discuss with stakeholders, being candid is good especially when you’ve identified and created a plan for how to improve. Transparency is in everyone’s best interest. Remember to add the sugar, not just salt.
Pie recipes that Last
It is possible that fundraising, in addition to other revenue building opportunities, can build resilience. Baking your revenue pie will require honest inquiry and experimentation, but be confident that the right recipe can be found. And remember that recurring revenue translates to sustainability, no longer needing to operate from a deficit.1 In other words, resource resilience need not to be a dream. Your funding recipe can be created to last and provide sustenance, even without winning the lottery!
1Pg 165, Chapter Five, “Build Sustainability”; Fundraising Innovators: Leaders in Social Enterprise Share New Approaches to Raising Money by Amy S. Quinn; Wise Media Group LLC; 2012
Amy S. Quinn is a published author and freelance writer focused on innovation in the nonprofit sector. For more resources, visit her blog.