Whether you manage a small two-person business or work for a major organization, you undoubtedly ask yourself, “How do we bring in more revenue?” regularly. Ultimately, the necessity to raise money to continue their purposes and pay for overhead propels nonprofit organizations.

No matter how much money you raise—even after you’ve raised membership dues, pushed current donors for extra support, and used up all of your event budget—the need remains and the bar keeps rising.

Are there any other ways you could increase your income?

Well, it is! Having a variety of income sources indicates that your company is strong and long-lasting.

Continue reading to discover why diversifying your nonprofit’s revenue streams is essential to its expansion, peruse a dozen distinct fundraising strategies, and pick up helpful advice to get you started immediately.

Now, let’s get going!

Why Should Your Nonprofit’s Revenue Streams Be Diverse?

There are a few excellent reasons to explore numerous revenue streams, aside from the obvious (diversifying your revenue streams frequently results in greater revenue).

It gives your company security and stability, to start with. In times of danger and uncertainty, having your “eggs in more than one basket” can help your nonprofit remain adaptive, flexible, and resilient.

Consider the COVID-19 epidemic as an instance. When the epidemic struck, organizations that mostly relied on fundraising events suffered, while others with alternative revenue streams could redirect their attention elsewhere.

Increasing the variety of your income sources also has the added benefit of allowing your network to grow. Your community will grow stronger the more partners it finds in the form of corporations, government agencies, donors, and members. You never know which of these alliances will present the next significant chance to expand even more, boost earnings, and further your goals.

Consider These 12 Nonprofit Revenue Sources

Now that you are aware of the advantages of having a variety of income sources for your organization, let’s examine some of the most popular methods used by nonprofits to generate revenue.

1. Fees and Dues for Members

If your nonprofit is a membership group, you probably already benefit from membership fees. It’s a dependable source of consistent income that helps both your organization and your members with an efficient membership model. Use a membership management program, if you haven’t already, to make it easy to remember to issue reminders for membership renewals and to keep track of dues.

2. Instances

Events are one of the best ways to raise money, whether they are held in person or virtually. They’re also a fantastic way to unite your community, update current supporters on your efforts, and meet new people unfamiliar with your organization.

Selling tickets will generate the majority of your income; in exchange, attendees will receive an enjoyable, worthwhile, or instructive event, along with possibly some snacks or a complete dinner. For extra money, if your event is more significant than average, you can also include a silent auction or think about getting sponsorships (more on that later).

3. Getting Things Sold

Revenue-generating sales of goods and services are not limited to for-profit companies. Selling branded goods through an internet store is acceptable, even if it shouldn’t be your primary source of income. People in your neighborhood would be delighted to help you out by buying a t-shirt or becoming regular subscribers. Additionally, when individuals wear products bearing your logo, it promotes awareness of your company.

Just make sure to inquire about the tax implications of selling goods with both your state and the IRS, as different revenue-generating endeavors have distinct regulations for nonprofit organizations.

4. Private Contributions

Even though a single donor may only provide $20 to your organization annually, the contributions of each new donor can mount up and have a significant impact. Remember the following to maximize individual donations:

Make it simple to donate online, by mail, over the phone, and in person.

To provide contributors with the option to give every month, improve your donation forms.

Distribute special appeals at least once or twice a year, preferably during the holidays.

Allow contributors to designate their contributions as tributes (i.e. in honor of a person or an occasion)

5. Large Presents

The Pareto Principle states that 20% of donors provide 80% of the revenue. We refer to this 20% of donors as substantial donors. The threshold for what constitutes a substantial gift varies throughout organizations; contributions over $1,000 may qualify for some, but gifts over $10,000 may not. These can include contributions of money, securities (like stocks), or legacy gifts (such as bequests made to an institution in one’s will).

Major gift acquisition involves a different approach than small-scale individual donations; instead of announcing a gift right away, a sustained relationship-building process with the potential contributor is necessary. If you’re considering putting in place a significant gifts program, you’ll need at least one employee who can commit their entire time to it!

6. Businesses Donating

Major gifts and corporate giving are comparable; however corporate giving originates from a for-profit company or enterprise. These gifts may include an employee gift match, an in-kind donation, or a sizable one-time present.

It’s crucial to search for businesses that align with your organization’s ideals while seeking corporate donations. These businesses tend to renew their support annually and give larger gifts when their customers and leadership genuinely care about your cause.

7. Collaborations

In contrast to corporate giving, sponsorships involve exchanging something for the company’s contribution. This is typically done to increase brand recognition and audience exposure for your nonprofit in an effort to draw in new donors. An additional opportunity for the business to show off its corporate social responsibility and build public favor is by sponsoring a charitable event.

8. Marketing for Causes

A nonprofit and a for-profit company collaborating for mutual gain is known as cause marketing. A prime example is when a company that sells products makes a pledge to donate a portion of each sale to a charitable organization. Similar to sponsorships, both parties benefit: the nonprofit receives funding and the business gains a positive public image and higher sales.

9. Intergroup Contributions

If you’ve ever planned or taken part in a charitable run, walk, or cycling event, you’ve probably already witnessed peer-to-peer fundraising in action. Each participant is supposed to gather money from friends and family and then donate the whole amount to a charitable organization. Apart from sporting events, you could even urge your most enthusiastic contributors to host a fundraiser for their birthday or plan a small-scale event and donate the earnings to your nonprofit.

10. Internet grants

Fundraising isn’t limited to new businesses! It’s a powerful strategy for raising awareness of your organization and attracting a sizable influx of new contributors. With a few restrictions, nonprofits can use websites like Kickstarter and GoFundMe, or they can use social media to launch their own crowdfunding campaigns. Crowdfunding campaigns that are successful typically center around an inspirational tale and captivating content that appeals to the masses and encourages them to share it with their acquaintances.

11. Awards

Grants provide funding from the federal government, private foundations, or businesses. Nonprofits typically compete for funding because they typically have stringent eligibility requirements, application guidelines, and a limited amount of funds. To fully benefit from grants, make sure you conduct thorough research and keep track of different application deadlines. This will ensure you don’t miss out on any funding opportunities and that you have enough time to craft an exceptional application.

12. Loans and Investments Associated with Programs

Certain financial institutions as well as foundations offer loans and investments related to programs. They do require repayment, unlike grants, and interest (though it’s typically far less than what a for-profit company would pay). Even so, loans can be very helpful to newly established nonprofits as they assist in financing future fundraising efforts and start-up costs.

Take These Actions to Increase Revenue Diversity

Although it could be alluring to jump in and attempt all of the aforementioned revenue streams at once, you’ll soon discover that this is not sustainable and can be highly expensive. Instead, use the steps listed below to draft a plan that works for your company and will eventually boost revenue.

1. Assess your existing sources of income

How much money does your organization currently make? What functions well and what doesn’t? Which skills does your team excel at, and which areas would you like to add more people to?

2. Seek out prospects for fresh sources of income

What is something you’ve yet to try but already have the means to implement? What is something you believe will be successful but requires more time to develop? What actions do other nonprofits take? Never be afraid to ask your peers for advice on what they found to be effective and how they were able to put it into practice.

3. Formulate a strategy

Set reasonable goals for yourself and how long you think it will take, and start small. Remember that, contingent on your organization’s size, managing certain revenue streams might necessitate hiring a full-time employee, so make sure to budget appropriately. Assess if you can rely on volunteers, outside assistance, etc., or if you’ll need to hire additional staff.

 

4. Examine your presumptions

Before fully committing, figure out how to test your plan with the least amount of time, money, and effort possible. Not every revenue stream you intend to implement will benefit your company. For instance, test the waters with a small-scale internal version of your crowdfunding campaign to see if your social media audience is interested in contributing before spending thousands on a professionally shot and edited campaign.

5. Keep an eye on your revenue sources

A revenue stream’s success is not guaranteed even after it is implemented, so develop the practice of regularly evaluating the outcomes of your work. Never be afraid to shift your focus elsewhere if a revenue stream isn’t worth the effort it needs.

Advice on How to Grow Nonprofit Organizations’ Revenue Streams

Are you prepared to change up your sources of income? To ensure success, bear in mind the following advice:

1. Never stop learning

Crowdfunding and other forms of revenue streams were nonexistent once, so be on the lookout for emerging trends and best practices that you can implement. Look to for-profit companies as well as other nonprofits; you can learn a lot from different sectors of the economy!

2. Summarize everything

To determine whether a new revenue stream is successful, evaluate your efforts and record as much data as you can.

3. Maintain a consistent message for every source of income

Revenue streams may overlap if your goals and requirements are communicated to potential partners and donors in a clear and concise manner. A one-time gifter may grow into a major donor; their business may become involved and contribute as a corporate donor; they may then become interested in your forthcoming event and sponsor it, and so on.

4. Remain adaptable

Don’t expect one revenue stream to account for the majority of your revenue the following year, even if it did so this year. Grants may be withdrawn, sponsors’ priorities may change, or a worldwide pandemic could strike and cause all events to be canceled. Never be afraid to change course and try something different.

Utilize Your Membership Program to Increase Revenue

 

A membership program is among nonprofit organizations’ most dependable sources of income. It can offer a steady stream of income for years or even decades if you concentrate your efforts on attracting and keeping members!

Make use of membership management software to optimize your success. It will handle other administrative duties, process payments, issue receipts, and automatically send reminders about member dues, freeing up your time to focus on developing connections and furthering your purpose.

Would you like to test-drive the best membership management software and discover how it can boost sales while saving you time and money? To begin a free trial, click this link!