Do you feel like earning revenue for your nonprofit or the nonprofit you work with is REALLY difficult?

Do you feel like there is NO money left?

Are you tired of only going after grants for revenue or approaching the same darn corporate sponsors as every other nonprofit?

These may be signs that your nonprofit, or the one you are working with, may not be healthy when it comes to funding. But the fact is that most nonprofit executive directors, and many individuals on board of directors, don’t have MBAs or know how to operate a business. The term ‘diverse revenue streams’ may not be in their dictionary.

But today, we’re going to add that term to your vocabulary! We are going to look at a variety of revenue streams for nonprofits. This will not only help your nonprofit or the nonprofits you work with gain fiscal health but if you are a freelance grant writer, learning these other streams will also help your fiscal health.

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Different Types of Revenue Streams for Nonprofits

I have outlined eight revenue streams for nonprofits. Please take into consideration that these are not all exclusive. There are many more, but I am focusing on the big ones. Additionally, these types of revenue streams can overlap. For example, a crowdfunding campaign can be considered a fundraiser. But these categories all have their own legs too.

Fees for Services or Goods (Products)

What?! Nonprofits can earn money by selling things? It ain’t so, you might say, but it’s true.

It is so true that it makes up the highest percentage of revenue for most nonprofits in the United States.

According to the Nonprofit Sector in Brief 2014 National Center for Charitable Statistics, nonprofits received 50% fees for Services & Goods from Private Sources, 23.1% for fees for Services & Goods from Government, 12.9% from Private Contributions, 9.2% from Government Grants, 3.6% from Investment Income, and 1.2% from Other Income.

Therefore, it is time to really think of how to develop fees for services and goods to be sold to the public and to the government.

If you want some of these, don’t fret. I will be breaking this down in more detail in upcoming podcasts in this series. But without leaving you completely in the dry, think of the Girl Scouts. This is one of the most prevalent examples. The Girl Scouts go out and sell those yummy cookies (any gluten-free types yet?!), and it provides the girls with entrepreneurial skills.

Those girls make some massive cash. In fact, according to Business Insider, the Girl Scouts have built a $300 million enterprise selling 200 million boxes of cookies annually. The money then goes back into the nonprofit. Pretty cool.

Grants

Grants are usually what comes to mind when nonprofits think of funding their projects. As a grant writer, I believe grants are amazing. However, I also highly recommend diversifying your income!

Grants are primarily used to fund projects for a certain duration and are not long-term. For most nonprofits that are fully, grant-funded, they may fall into the rut of ‘chasing the money’. Examples of grants are like getting a federal $450,000 Department of Justice grant that will fund a three-year domestic violence transitional shelter or a foundation grant of $5,000 for funding the purchase of IT equipment.

Grants are fantastic, but remember, grants are better suited for funding specific projects. Sometimes you can find grants that fund general operating expenses (and that is great!), but most often grants will fund a certain type of project and only for a certain amount of time.

Fundraising

Fundraising is another aspect that many nonprofits tap into for funding. Fundraising is very diverse. Examples include events such as car washes, coupon books, galas, and pancake breakfasts. Fundraising is ah-mazing for funding operational costs (i.e. overhead, salaries, and other items that may be hard to get funding for because they aren’t sexy!) and/or project costs.

The thing with fundraising is it is usually for certain times throughout the year. You don’t normally have a 24/7 fundraiser going on all year-round. There is a lot of work on the front-end of fundraisers to get all your ducks in a row, but they can also offer exposure to your nonprofit or the nonprofits you work with.

Corporate Solicitations

Corporate solicitation includes asking corporations to donate items or services to your nonprofit, securing monetary donations, and ways to leverage for-profit businesses. Maybe a cell phone provider donates Wi-Fi access to your nonprofit or a bank gives your nonprofit a $5,000 annual cash donation. Or maybe a business wants to improve (or is built upon) its corporate social responsibility and can provide ways for your nonprofit beneficiaries to earn money.

Corporate Solicitations may also cross over into fundraising events as you may approach corporations to dedicate funding towards the fundraiser. Or you can approach corporations to see if they will be annual sponsors. However, ensure that you approach corporations that have a mission that is aligned with the nonprofits.

Individual Charitable Contributions

Donors, donors, donors! These are individual contributions. Maybe your nonprofit already utilizes this pathway where you have individuals donate $10 every month to your cause and it is done automatically. Or maybe you have a ‘Donate Now’ button on your nonprofit’s website and get random individual donations. Those of you with a little more experience in individual contributions may head an endowment foundation where you chase alumni from a university to give on an annual basis.

In any case, if you aren’t tapping into this, then you could be missing out on a lot of money. According to an article in Stanford Social Innovation Review in 2015,

• The average smaller nonprofit raises 36 percent of its annual overall income from individual donors.
• Individual donors give about $435 a year on average, whether big or small, online or offline, recurring or one-time.
• Smaller nonprofits are raising 17 percent of their annual individual donor income online.

Crowdfunding Campaigns

Online giving is a serious source of revenue these days. Crowdfunding campaigns include raising money for a certain project or a specific amount of money in a certain amount of time through online platforms.

For example, an animal shelter may need to raise $5,000 in one month’s time to perform life-saving surgery on a fox.

A crowdfunding campaign also usually includes incentives for donors. This might be their name on the animal’s cast or something unique and fun that gives a feeling of impact.

Emerging Social Capital

We heard about this type of project last week with Alexis Cook from Unlocked as she discussed how Unlocked is created as a CSR. It provides skills and a pathway for homeless women to become the jewelry makers and to earn an income to get out of homelessness while creating beauty.

In this way, more businesses or small groups of people are inclined to partner in creative ways to help nonprofits. This is slightly different than pure corporate solicitations as there is a higher level of partnership which isn’t just a side help (and possibly a pure tax write-off or greenwash), but the nonprofit is an integral part of the mission of the business.

Influencers

I am including this in 2019, as this is a new sort of phenomenon that nonprofits can leverage. This is more of a marketing strategy, rather than a pure source of income, but it can lead to generating income and connecting with influencers should be a strategy that is part of a nonprofit’s revenue plan.

This could cross over into nonprofits that have a certain product they sell. If they find influencers to post about it, this could increase their sales. Another way to leverage influencers is to have very well-known influencers be passionate about your overall mission and to raise further awareness about it or to start fundraising directly for your cause.

For example, one of the nonprofits that I know in Jordan (3DP4Me) makes hearing aids using 3D printing. So, very cool! Well, they were featured in LA Times and Guy Kawasaki caught wind of it and posted about it on his Instagram to his millions of followers.  Needless to say, this had a tremendous impact on raising awareness about their nonprofit.

A way that I see influencers directly raising money for nonprofit causes they believe in is through a type of crowdfunding. For example, Sean Croxton of Quote of the Day Podcast and Pat Flynn of Smart Passive Income have both funded schools for Pencils of Promise.

Even Facebook gives people the opportunity to throw a fundraiser on their birthdays! So tapping into influencers that believe in what you are doing is a great way to kick off your crowdfunding campaign or to increase awareness about your nonprofit.

Be sure to grab your downloadable to get a checklist of all the different ways to earn income by clicking here.

List of Sources and Data

1. Nonprofit Sector in Brief 2014 National Center for Charitable Statistics
2. How the Girl Scouts built their $700 million cookie empire
3. To Boost Individual Donor Giving, Nonprofits Need a Plan
4. Crowdfunding for Your Nonprofit with Steve Vick
5. How For-Profit Businesses Support Nonprofits with Alexis Cook of Unlocked
6. Nonprofit delivers 3-D-printed hearing aids to kids in the Middle East
7. My Birthday Wish! Let’s Educate 1,000 kids!

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