Multiple Streams of Revenue: 11 Ideas for Nonprofit Success
Are you interested in multiple streams of revenue for your nonprofit? If so, you’re not alone. Part of a nonprofit’s mission is to generate sustainable funding for its cause. Creating a broad mix of funding sources is the key to a nonprofit’s financial success. It helps them remain healthy even if one or two sources dissipate or dry up. If you’re ready to expand your funding, here are eleven popular revenue streams to consider:
Typically given by a foundation, corporation, or government agency, grants are a financial donation given to an organization. Unlike loans, they don’t require repayment. And because grants typically come from large, established organizations, they’re often more significant gifts than those from individual donors. Some grants come with requirements for spending the money, but others don’t. Most require excellent storytelling and writing. Grants can be a lot of work to obtain, but winning one (or some) is well worth the effort.
For most nonprofits, charitable contributions are a primary revenue stream. More donors lead to more donations and, over time, can make a significant impact. To make the most of individual donations, keep the following in mind: 1) Make it extremely easy for people to donate. 2) Offer multiple donation options (even cryptocurrency donations. 3) Offer a monthly contribution option. 4) Appeal for donations at least annually, and especially during the holidays. 5) Offer donors the option to contribute in honor of a person or occasion.
What’s considered a major gift varies from one organization to the next. They come in the form of cash, securities (like stocks), or legacy gifts. Securing major gifts is different from obtaining smaller individual donations. It’s a lengthy process — one that requires building strong relationships with prospective donors before any mention of making a gift. A major gifts program is a full-time effort, so consider appointing at least one staff member who can fully dedicate their time to it.
Companies love charity. They often promote workplace giving through employee matching gifts programs and other efforts to encourage workers to give their money or time to good causes. The purpose is not only to deliver social and beneficial impacts but also to boost the company’s reputation. Nonprofits should choose their corporate partners wisely. Once there are a few viable candidates, prepare compelling value propositions for each to show how a relationship is beneficial for all involved.
Corporate sponsorships are a type of marketing where a company pays for the right to be associated with a project or program. It’s different from corporate giving since the company receives something in return for its contribution. Typically, corporations have their logos and brand names displayed prominently with the project or program, and their funding is mentioned throughout.
Cause marketing happens when a business supports a charitable cause or a social issue and receives marketing benefits in return. One typical example is when a product-based business pledges to donate a percentage of every sale to a nonprofit. Much like sponsorships, it’s mutually beneficial because the company receives increased sales and good publicity while the nonprofit gains financial support.
Not just for start-ups, crowdfunding is a way to raise money with donations from many people. Kickstarter, Indiegogo, and GoFundMe are typical examples of crowdfunding sites. To have a successful crowdfunding campaign, share an engaging, inspirational story regarding your cause — one that resonates. The best stories compel people not only to donate but to share your story on their social networks — which expands your reach to multiple audiences.
Peer-to-peer fundraising is a multi-tiered type of crowdfunding. It relies on people reaching out to others regarding your cause. Those supporters then fundraise on your behalf. Typical examples include charity runs, walks, or cycling events. Also, consider encouraging donors to raise money in association with their birthday, where the proceeds go to your nonprofit. You often see people holding fundraisers like this on Facebook.
While not a primary source, nonprofits still do make money from the sale of goods and services. NPR is an excellent example, as they sell branded merchandise through their online store. Your organization could sell branded mugs, t-shirts, and hats. The bonus? When people wear your merchandise, it spreads the word about your organization and its mission. Be sure to check with the IRS and your state about the tax regulations for selling merchandise, as income-generating activities may have different rules for nonprofits.
A membership with a nonprofit works similarly to that of a for-profit membership program. The nonprofit gives members privileges or perks in exchange for membership fees or dues. However, the associated fees or dues are considered charitable contributions. An effective membership model is nice because it’s a regular, reliable source of revenue that benefits both your organization and your members.
Events are typically a significant source of revenue for nonprofits. But when COVID hit, it was a more challenging endeavor. Many nonprofits pivoted to virtual events during the pandemic, which worked well. Now that the pandemic is starting to subside, we’re starting to see more in-person events again. But no matter whether in-person or virtual, events remain one of the best ways to raise funds. Revenue comes from ticket sales, silent auctions, sponsorships, and more. Even better, they’re a fantastic way to bring your community together, give an update on your mission, and introduce new people to your organization.
There you have it — eleven popular ways to help future-proof your nonprofit for years to come. If you have questions on how to handle the accounting around any of these revenue streams, we want to help. Nonprofit accounting is our specialty — and we happily work with organizations located throughout the U.S., from Savannah to San Francisco. You’ve got nothing to lose and everything to gain, so let’s get started. Schedule your free introductory call today.
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