Although many pundits and government leaders have declared the end of the great recession, demand for services continues at unprecedented levels. Unfortunately, the growth in demand has coincided with an unprecedented drop in nonprofit financial support. Investment income, corporate giving, and individual donations all plummeted from 2007-2010. Today, four years later, the decline is still visible.
Nonprofits unable to balance, build, and develop diverse revenue streams are closing their doors or being taken over by those that can. The large number of nonprofits closing and merging is making many potential donors nervous and they are asking additional questions and exploring more than just last year’s audit.
Everyone agrees diversifying and expanding revenue is essential, but the task is daunting. Government funding can be federal, state, or local and even a mixture. Corporate funding can come from marketing, foundation, or employee giving. More and more individuals are giving through a donor advised fund. Not to mention all of the new earned income methods. Clearly the complexity of the task has grown.
Developing these revenue channels takes a steady investment of resources and time. Before leaders can identify the streams to target, they must identify the resources and connections they already have and can build on. Different revenue streams require different resources and tools. Not only are there many more sources but the resources and tools needed to create these new channels vary depending on the sources sought.
Although some of the resources differ, one resource is consistent across all sources. Fundraising is often more successful as the number of people engaged grows. Increasing leaders, increases connections, and increasing connections lead to more knowledge of potential sources and more interest in the mission.
Once new volunteers and potential donors are involved, leaders must understand the terms and know what question to ask to identify new opportunities and sources. This blog will provide some tools and strategies to help leaders expand revenue to fund essential programs. After all, raising money is not a goal it is the way to fund programs. Neither is stability, but it leads to a stronger organization with leaders that have more time to invest in the mission. Next post, defining the terms.