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Friday, March 24, 2017

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20 Years of Proven Income Practices
Karen Eber Davis

September, 2014

1. Income Sustainability is the result of providing ever-improving mission value, using a logical income strategy, thoughtful planning, and disciplined delivery. Start by providing services at least 50 percent better than everyone else in the field. Work your way to the top. Be the five-star option. Yes, it will cost more, but usually very little.  Income proceeds from value. To earn more, provide more.

2. Income Predictability. For nonprofits that provide value to the community and actively grow skills to obtain it, income is a natural bi-product. If your income is trickle, a boulder or boulders blocks your income stream. Are you, for instance, one of your community’s best-kept secrets? Blow up that boulder. When the University of South Florida-Sarasota faced an identity crisis—everyone kept mixing them up with other local institutions—they began to solve the challenge, in part, by creating synchronized community events to improve the community’s awareness of their significance.

3. Develop a Forever Income Strategy. Does your nonprofit have a customized strategy to obtain income? You need one. To develop it, help your board of directors to understand how nonprofits obtain income. Also, determine how other nonprofits in you sector obtain it. For help, see my forthcoming book, scheduled for publication in April. About 20 years ago, Opportunity Village in Las Vegas developed a strategy using three income streams: mission income, individual donations, and government. Staff and volunteers still use the same strategy and is busy fine-tuning their expertise in the same sources two decades later. Their work funds a 26 million dollar annual budget.

4. Be Experts. Most sustainable nonprofits become experts in one or more of the largest three industry sources: mission earned, individual donations, and government. Then, they augment this money with other opportunities, i.e., that grant from their friendly local foundation. Focus your income earning energies. Learn everything about particular source. Tweak what you do. Over time, you’ll become an expert at that income source. It’s a bit like launching a satellite into orbit. It takes a lot of energy and resources to get a sources working for you, but once it is in place it starts working for you long-term.

5. Cross-Train. Even though the shoe industry tries to convince me otherwise, I resist owning a separate pair of sneakers for every sport I do. Instead, I invest in cross-trainers. Even though it may seem expedient to have staff focuses on different income and service activities, in successful nonprofits everyone supports income growth. They embrace this mindset: If you care about the mission, you care about how to fund it.  Cross-training here is literal. Everyone needs to learn how to ask for donation, to help writing or proofing a government grant, and how to tell customers, “The service costs $125.” For example, the management staff of The Salvation Army-Sarasota is investing time learning how to obtain nonprofit income.

6. Use Criteria. All nonprofits stand in front of a river of income opportunities. It’s like standing on a bank at the water park as inner tubes float past. Which one will you grab? You probably establish criteria before you jump. You pass on the flaccid rings. You reject those near the rowdy swimmers splashing and pushing each other off. Likewise set criteria such as return on investment, before you pursue opportunities to obtain income. Chasing after every option exhausts everyone.

7. Don’t Do It Alone. On every first day of kindergarten, camp, and college, you felt alone. Then, you found friends. Part of what bound you to them was the shared experience of being new. Likewise, nonprofits that provide value to their communities often feel alone. Yet, they have friends and supporters. Until they find them, they continue to feel alone. To find your supporters, meet people who are likely to care about your work. Leave your office. Have lunch out. Under their clothes, just like Superman, some people are wearing your T-shirt. Until you become friends you won’t know it. For many successful nonprofits, a crowd of individual donations proves that they have found friends who share a love of their mission.

8. Stretch. Ask Others to Join You. Year ago when H. George Anderson, became second Presiding Bishop of the Evangelical Church in America, he wrote something that stuck with me. Paraphrasing him—what people want is be left alone but what people need is to be challenged. In his 2011 book, Thinking Fast and Thinking Slow, Daniel Kahneman, winner of the Nobel Memorial Prize in economics, helps us to see the why behind the conflict between what we want and what we need. Thinking fast preserves energy, thus the leave-me-alone response. Thinking slow, the real need if we’re going to improve lives, requires energy. People would rather be left alone. You’d rather not bother them, too. However, to grow income you will need to challenge yourself and others to think slow. What might this look like in nonprofits? To stimulate thinking, give generously to your nonprofit. Follow your gift up by asking ten others to also give a lot.  Your gift invites them to think—slow. Why ever would someone give that much to this nonprofit? It shuts down the automatic think-fast no.

9. Use Two Birds, One Stone. I’ve used this maxim at least 7,300 times (365 x 20) in my years advising nonprofits. Nonprofits remain notoriously under-resourced. To succeed, be smarter than for-profit businesses and governments. Recognize that you are! To thrive, leverage your time and resources to create maximum community good. Here is a story of someone thinking leverage.

10. Stop It. Eliminate high-cost, low-return income opportunities—especially time sucks. Mrs. Big Bucks is always glad to have lunch with you. She funds 30 other nonprofits in your community. You may, with another 20 lunches, garner another $10,000 from her. Is it worth it? Is she asking you to play her like a slot machine? Remember your river of opportunities. Two-thirds of success is doing; one-third is not doing. Love Mrs. Big Bucks. Stay in contact and gently put her on the back burner. Invest your energy finding friends who wear your t-shirt.

The natural state of nonprofits that provide value in the community is to have or be in the process of obtaining adequate income. Three things are necessary: improved mission work, disciplined use of a long-term income strategy, and skill growth. Other than that, after 20 years, I don’t feel strongly about it.

You’ve just read ten content rich-think about it points. Pick one. Circle it. For the next week read it once per day. Think slow. Think how to increase your nonprofit income. I look forward to helping your grow your income the next twenty years. I’m wearing your t-shirt.


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