Diversifying Revenue Through Earned Income

Trey and I have long believed that many nonprofits have untapped opportunities to develop new revenue streams to supplement and strengthen their existing revenue profile. There seem to be three basic models for doing this.

One approach is for an organization to monetize something it already does well. About half of our work at PlaceMatters consists of fee-for-service projects with communities around the country. We ensure that our research is continuously grounded in on-the-ground work in real communities, we field test new community engagement tools and techniques, and simultaneously generate an important revenue source for our nonprofit.

A second is to monetize a by-product of something the organization does. The Extreme Ice Survey, which documents the impacts of climate change on glaciers around thew world, is able to generate revenue from its remarkable photographs and videos. The images and videos are a by-product of the work itself, but they can provide real financial value in support of the mission.

A third might be to monetize the mission directly. An example: by selling heirloom seeds to farmers and gardeners, Native Seeds/SEARCH directly advances its mission of protection genetic diversity in agricultural plants.

Despite many great examples across the sector (including parts of the sector that are heavily funded through direct services), we suspect that many nonprofits underutilize or leave untapped altogether some revenue streams that could provide more revenue stability and security for their mission-based work.

The main reasons for this, we think, are a combination of not having learned to think entrepreneurially (in a revenue-generation sense) and not having the skills to execute even when those opportunities become apparent. And if that’s really the explanation, it’s good news, since those seem like learnable skills and skills that may be increasingly valued in the social sector as the philanthropic toll of the recession persists.

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