Fee or Free?

Do we need to worry about the sustainability of nonprofits? How diverse are their revenue streams?

When looking at the state of nonprofits today, and how current trends may affect the long term, I am concerned about a few things. At the top of my list is the mix of revenue sources for social organizations. A focus on philanthropic dollars makes sense, and is part of the charitable mission.  And securing some government grants is nice, too.  But wouldn't it be nice to have considerable unrestricted and renewable revenue to support the organization too?  The idea of social enterprise has been around for decades.
Let’s explore the notion further.

Resource development includes earned revenue – that means some type of fee for service.  And yet, many organizations report that more than 2/3 of their operating dollars come from donations and grants.  No wonder they are all feeling such pressure! This may be a shift in thinking for many organizations in the social sector – it used to be common to have the perspective that good works should be free.  And indeed, in many cases, the beneficiaries of critically needed programs are not in a position to pay for services.  But what if you looked at it a little differently?  What if you looked at the assets (facilities, products, programs, services, people) you already possess and start thinking about how you could leverage a different type of revenue?  And in turn, possibly create a stronger ROI in terms of social impact, while reducing the need for donated funds.

Here are some questions to consider:

* What are we providing at no cost that could become a revenue stream ?

* What other assets, services, or execution advantages could we ‘sell’?

* How could we expand these areas of the organization?

* Is there opportunity to partner with another organization, create a new product arm of the business, etc.?

* Are these new ideas of how to do business consistent with mission and culture?

* Are we moving outside the rules of unrelated business income?

Some ideas which may come forth could relate to re-purposing facility space (could you rent out some rooms to other organizations too – for gatherings or even long term?), utilizing your staff experts to train others or provide consulting, selling merchandise, or creating an online membership which provides items of interest or VIP opportunities to members. And sliding scales are acceptable, too.

Strengthening your revenue sources can be fun!  When it looks like there may be some possibilities to explore, pull the team together and see what might come out of a strategy session. You are looking for diverse thinking to get the most out of the discussion. There is also a lot to consider, and when you determine what direction makes the most sense for your organization, be sure to consult experts and lawyers to outline any parameters which you might not know exist.

Cindi Phallen has more than 20 years of
experience as a leader in the nonprofit sector. She is the founder and
President of Create Possibility, which works to help nonprofits run more
efficiently and expand their impact. For more information, visit possibility-cp.com or call 858.618.4762.





Posted: 19 Mar 2013 11:18 AM PDT



  A few months ago we published a guidebook: How to Get a

This is a nugget about the story
  to secure a visit.  Really though, it’s a reminder about WHY we are
  trying to get a visit in the first place.  (Hint: it’s not about the


Perhaps your process to get a
  visit goes like this:


[A phone call or email from the ‘development
  officer’.]  “Could
  we come and see you to talk to you about our annual campaign?”


There IS a story here… But it’s a

  • § Development
  • § Annual Campaign
  • § No ‘WHY’.  No


Here are some thoughts to help you
  create a GREAT (VISIT) STORY.

  • § Go back to our core
    Impact Drives Income. WHY are we
      visiting?  WHAT are we trying to do [IMPACT]? WHY do we want this
      person’s time?  Is it to ask for money? Or, is it to help change lives,
      save lives and impact lives? 
    • § “We are visiting with
        people to talk about HOW to transform education in our community.”
    • § “We are engaging key
        stakeholders in a conversation about the future of health care in our
    • § “This is a movement;
        you are part of it.  We have light years to go to change [insert
        cause].  This is an important conversation and we hope to have thousands
        more like it throughout the country…. “
    • § “We will be sharing
        where we’re going and asking for your help.”
  • § The story you tell
      yourself is AS important  – if not MORE important – than the story
      You must BELIEVE this is a phone call to change and save
      lives.  If you believe this, your SPIRIT will trump any script.  If
      you don’t believe this, a script will not help.
  • § Be Assumptive. 


Nobody wants to
  have a visit to talk about money.




And yet, some
  $300 Billion is given away in the US each year. 


Why is this?


Because just
  about everybody wants to make a difference.  Just about everyone wants
  to help.


Everyone your
  meeting with (or hoping to meet with) WANTS TO CHANGE THE WORLD!  They
  want to have exhilarating discussions about making a difference.  They
  just don’t want to have a meeting about ‘giving money’.  Giving money is
  a means to an end.

  • § Don’t make decisions
      for the prospects!
      Just a reminder.
  • § Bonus thought: Part of
      the STORY is about the PEOPLE on the visit.


This is a great team-selling tip.


YOU are a cool person!


Have a board member or natural
  partner help to open the door with this story, “You’re going to really enjoy
  spending 30 minutes with Stephanie.  She’s a rock star… one of those
  people that makes us all want to do more to change the world.  Stephanie
  and her team are amazing social entrepreneurs. “






This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.


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