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The job of the board chair, executive director or lead officer in any nonprofit is to create a steady and reliable source of funding for the organization. But the pressure of daily events can make this goal seem unattainable.
In the Network for Good webinar "Broadening Your Fundraising Net: Diversifying Your Fundraising Channels to Build a Financially Healthy Organization" in late April, Cindy Adams, president and CEO of GrantStation, discussed how organizations can diversify fundraising income streams to help become financially healthier. She looked at how and why organizations should assess their existing revenue streams, ways to boost the bottom line by building on what you already have, and best practices for developing a funding plan. She also recommended some practical assessment tools.
Adams recommended taking a step back from the daily grind to assess where your organization is today in terms of existing revenue streams and talk about how you might diversify.
"Knowing where the money comes from to run your nonprofit is almost as important as understanding how these sources affect the sustainability of the organization," Adams said.
Take 45 minutes or so and create a profile of your revenue streams by looking at all the income streams in your operating budget and listing them on a spreadsheet, along with the amount of income for each. Then use those figures to create a visual of your income streams, e.g., a pie chart, that will help in talks with your board, volunteers or other staff about the need to diversify your income.
"You want to use the profile you create, along with some basic fundraising rules of thumb, to help your board, your staff and your volunteers really understand the need to diversify and which areas of fundraising you want to focus on next year, because you can clearly see where the money is coming from," Adams said.
A diverse income stream might have about seven different sources of revenue, including grants, earned income and individual donors. That's what organizations should be shooting for, Adams said — a profile that has a lot of different income streams where no one has a dominant piece of the pie. But she said many organizations she's worked with go through this exercise and develop a chart that has only two or three sources, often with state or federal funding as a source.
Each organization should come up with its own variations on these, but some rules of thumb — or what Adams called a "reality check" — for diversifying income streams include:
In the Network for Good webinar "Broadening Your Fundraising Net: Diversifying Your Fundraising Channels to Build a Financially Healthy Organization" in late April, Cindy Adams, president and CEO of GrantStation, discussed how organizations can diversify fundraising income streams to help become financially healthier. She looked at how and why organizations should assess their existing revenue streams, ways to boost the bottom line by building on what you already have, and best practices for developing a funding plan. She also recommended some practical assessment tools.
Adams recommended taking a step back from the daily grind to assess where your organization is today in terms of existing revenue streams and talk about how you might diversify.
"Knowing where the money comes from to run your nonprofit is almost as important as understanding how these sources affect the sustainability of the organization," Adams said.
Take 45 minutes or so and create a profile of your revenue streams by looking at all the income streams in your operating budget and listing them on a spreadsheet, along with the amount of income for each. Then use those figures to create a visual of your income streams, e.g., a pie chart, that will help in talks with your board, volunteers or other staff about the need to diversify your income.
"You want to use the profile you create, along with some basic fundraising rules of thumb, to help your board, your staff and your volunteers really understand the need to diversify and which areas of fundraising you want to focus on next year, because you can clearly see where the money is coming from," Adams said.
A diverse income stream might have about seven different sources of revenue, including grants, earned income and individual donors. That's what organizations should be shooting for, Adams said — a profile that has a lot of different income streams where no one has a dominant piece of the pie. But she said many organizations she's worked with go through this exercise and develop a chart that has only two or three sources, often with state or federal funding as a source.
Each organization should come up with its own variations on these, but some rules of thumb — or what Adams called a "reality check" — for diversifying income streams include:
Companies Mentioned:
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The Art & Science of Multichannel Fundraising
PURLs for Profit