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Saturday, April 29, 2017

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20 Often Missed Nonprofit Revenue Opportunities
Karen Eber Davis

November, 2014

Your nonprofit can obtain sustainable income. This list identifies twenty places where nonprofits leave money on the table. Which opportunities are you missing?

To learn more and develop action steps to earn more opportunities, sign up for the Sustainable in 2015 telephone conference, Dec. 17 at 12:00 (noon) Eastern. We’ll discuss how to take advantage of the opportunities plus explore five more missed opportunities. Added Valuesubscribers (that’s you) receive a $10 discount. Current and past customers are free: Email Karen for your code. 

The Opportunities

  1. Paying for products or services that you might obtain as in-kind gifts. One of my clients identified over seventy thousand dollars in opportunities, or nine percent of their budget.
  1. Waiting for the right timing to pursue new revenue streams. No one knows what tomorrow will bring. The river of opportunity flows now. Someday is not coming. Reach in and grasp the best opportunity you see.
  1. Accepting free or low cost opportunities, when the best value comes from paying full price. It’s one thing to buy generic dish soap. It’s negligent to buy generic expertise, whether it’s consulting or architectural services. With the first, if the service or product fails, you select a better alternative next week. With the second, you waste the community’s time, handicap your organization, and inevitably loose money you can’t afford to loose.
  1. Delegating income development down. The CEO and Board must retain leadership in developing revenue. They stay with it until the source is stable and staff masters the tactics.
  1. Over-focusing on grants. While grants represent excellent opportunities to grow new efforts, purchase capital items, and fund one-time capacity building efforts, they’re lousy for operating and repetitive expenses.
  1. Over-focusing on the same (small) pool of donors. Donor burnout occurs because we don’t have enough donors. Our bad.
  1. Focusing only on mission, when you must generate mission plus revenue and grow a community—every nonprofit’s triple bottom line. Like many small businesses, most nonprofits stop at being good tactical specialist, when they need to become good at organizational leadership. The former excels at outputs, the later at sustainable organizations. By focusing only on mission, you loose income and its origins: community support.
  1. Failure to involve all staff in revenue development. Everyone has a role. Empower everyone. This year, I worked with a Salvation Army—yes this included helping a kitchen manager, program mangers, and social workers understand how to generate income. They began the process feeling “spooked,” and ended it feeling empowered, proactive, and encouraging their co-workers from other locales. (See video.)
  2. Assuming the nonprofit has already maximized earned income. Two commonly missed opportunities? Customers who are not part of your regular customer base, and new service to your current customers.
  3. Being closed to considering ways that current customers or members might be charged a fee—even hypothetically. Or any other similar rule that starts, “We would never…
  4. Continuing to try to solve challenges in-house that have flummoxed staff for years, when expert advice is available. Last month a national nonprofit shared a challenge they’d fought for years, and before I left the building I outlined a strategy to solve it.
  5. Failure to connect the dots. For example, holding events for friends and donors, and failing to create a follow-up plan that connects them to you next step. Development is a process. What the next action you want the recipient to take after you send your annual gift letter, besides sending a check.
  6. Not recognizing that you are on a personal philanthropic journey. Understanding your traveling, too, will also help you to relate with the donors you ask to give.
  7. Not challenging mythical thinking about obtaining income. No secret cash machine exists. Revenue results from strategic investment in ideas and disciplined work.
  8. Failing to educate and empower board members as part of your resource generation team. Too often this leaves them, out of ignorance, blaming staff for income shortfalls.
  9. Not helping board members with a business background to appreciate that nonprofits earned income lies within their expertise.
  10. Forgetting to educate board members about why individuals donate. The Center on Philanthropy at Indiana University identified these five motivators:
      • To meet important basic human needs.
      • To give back.
      • To help those with less.
      • To bring about a desired change.
      • Because they were asked.

Notice what’s missing from this list: The needs of a nonprofit.

18. Playing, “I see dead donors,” an exercise that involves believing that life would be easier if you only had another nonprofit’s advantages. The grass is not greener in the arts, around pets, with nonprofits that serve children, or in more desirable locations. (Leaders from those groups envy something about your donors.) Focus your energy on finding more people dedicated to your mission.

19. Hiring development staff based on the dollars the candidate earned elsewhere. Success depends on the cause, the case, the groundwork, and timing.

20. After they donate, failing to provide donors with what they need, including that:

      • Their gift was received,
      • It was put to its intended use,
      • It was appreciated.

Renewals cost less money and energy than new obtaining new donors.

Your nonprofit can obtain sustainable income.

Total the number of your missed opportunities. Then, join us for a discussion of the proactive steps you can take in 2015 to grow your nonprofit’s sustainability on Dec. 17.



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