Nonprofits are now faced with crisis and rage giving and need to strategically respond to this trend.
This is a third article of an informal series on nonprofit revenue development. So far, we overviewed how a nonprofit revenue strategy must be built upon your organizational strengths; how expanding review streams must be intentional rather than opportunistic; and, in this article, we will outline a practical approach to creating a revenue strategy.
For most nonprofit agencies, and many for profit businesses, the starting place for strategic conversations about revenues is to get very clear about the strength of your existing revenue model and the challenges of resourcing the development of new revenue streams. By balancing what you do well, with what you aspire to develop will set up a useful conversation about allocating scarce resources.
In thinking about revenue planning, forward thinking nonprofits begin with maximizing their strengths. They invest strategy, time, money, human resources, and build systems to support strength. So ask yourself where is the strength in your organization’s revenues. Are you investing in that strength? Can you invest more?
Faced with the reality of our small local philanthropy box that unevenly allocates resources, I believe that nonprofits are being pushed into thinking about developing an intentional revenue strategy. Leading edge nonprofits are doing just that. They are investing the time, money and people power to ensure that they have, and can implement, a revenue strategy. Having a grant strategy allows you to intentionally move outside of the local philanthropy box.
Without strategy and intentional capacity building, successful grant writing is a significant challenge. So what does it take to build a nonprofit grant revenue strategy? I believe it takes five core competencies briefly detailed below.
I am convinced that nonprofit organizational transitions are clear opportunity points to think strategically. In this article, I want suggest how a nonprofit board and executive leaders can fill the “white space” created in an organizational chart when a development director resigns.
The premise of the autonomy and reliability discussion is that for a nonprofit organization to achieve a sustainable revenue strategy, it must balance two goals. The first goal is to create reliable revenues to cover operating costs and bring stability to the agency. The second goal is to ensure some level of autonomy connected to revenues so that the organization can innovate and adapt to its changing environment. When reliability and autonomy are placed as crossing dimensions, they create a two-by-two matrix. As an organization considers each cell of the matrix specific revenue profiles begin to emerge.
The opening premise of this article is simple. Creating and acting on a clear revenue model is an essential strategy to support the long-term stability of your nonprofit organization. Without intentional strategy your agency is less resilient and less in control of your future. Creating a revenue model is the process of thinking about the potential universe of funding accessible to your organization and making strategic decisions about preserving, increasing and/or expanding revenue streams with the highest potential of working within the constraints of your organizational capacity.
I have worked with many organizations where the starting point for revenue development planning is next year’s budget. However, a “seeking support for programs” approach to resource development is an increasingly unreliable way to raise revenues that support the financial stability of a nonprofit.