One of the hardest parts about creating and then maintaining a nonprofit organization is sourcing money to sustain growth. It’s a difficult balancing act to provide quality service and reach as many in need as possible while garnering enough funding to keep the operation supported. All too often, nonprofits may not make it more than a few years due to fund sources drying up or an inability to find new avenues as the organization grows.
Fortunately, there are a few steps nonprofits can take to create a self-funding nonprofit model that can keep business in good stead for years to come. To help, nine members of Forbes Nonprofit Council open up about their personal methods for creating self-funding models with nonprofit support capabilities below.
― Forbes Nonprofit Council
- Monetize Your Services
Review the services/programs you offer and choose one or more that you would buy as a customer, then monetize it. Consultation services or program or software development via an online platform or storefront could be the venue. However, research the market and demand in your area, write a business plan, conduct focus groups and gather as much data as possible before launching any new venture.
― Kimberly Lewis, Goodwill Industries of East Texas, Inc.―
- Apply an Open-Source Model
Pooling resources with other organizations, including sourcing software, tools and talent, is an ideal way to create a self-funding nonprofit model. Plus, it helps other organizations do the same.
― Gloria Horsley, Open to Hope―
- Have Dominant and Secondary Source Funding
Financial stability requires diverse funding streams, especially if government contracts are the largest source. Targets are the first step because diversification is not easy. Each new source requires learning and painful stumbles. Our targets are 40% contract, 40% fee for service, 10% gifts and 10% grants.
― Ronald Tompkins, 82nd Street Academics―
- Become A Social Enterprise
Nonprofit organizations that are looking to create a self-funding nonprofit model should consider becoming social enterprises. After all, being a nonprofit organization is just tax incorporation, and successful organizations integrate business models with the cultural intelligence they bring. Having consulting services and products allows nonprofits to work toward being sustainably funded.
― Angelique Sina, Friends of Puerto Rico―
- Leverage Social Media and Automation
Social media scheduling tools and automated online giving allows nonprofits the chance to “schedule” asks and make it easy to give securely online. While this method of giving strategy is new, as processes and technologies improve, we can expect that this platform will only grow and become more effective.
― Aaron Alejandro, Texas FFA Foundation―
- Create Proprietary Knowledge
Nonprofits often create an event or a product as a solution to their own individual problem. It’s likely that they learn something along the way about how to change it, upgrade it or evaluate the outcomes. The reality is that it’s also likely that other nonprofits are struggling with the same thing. What research, program or other knowledge might be licensed and leveraged toward self-funding?
― Tammy McLeod, Flinn Foundation―
- Sell Your Value
Identify ways to create earned income streams. This could be from a physical store selling goods to a service provided by your program participants to digital resources you create and sell online. Almost every nonprofit generates something of value as a byproduct of their service to the community and making that available for sale can cover a portion of revenue needs.
― Steven Moore, M.J. Murdock Charitable Trust―
- Create Mission-Aligned Earned Income
Mission-aligned earned income provides nonprofit organizations with agency and self-directed funding. I don’t believe that every nonprofit’s mission is perfectly aligned with bringing in revenue, but thinking about the organization through the lens of self-funding is a helpful way to get creative around the possibilities.
― Kristine Sloan, StartingBloc
- Treat Your Beneficiaries Like Customers
Consider if your existing income can be supplemented by selling products or services to your nonprofit’s beneficiaries. While initially counterintuitive, providing these products or services can translate into real benefits, such as employment and supplemental income. Identifying these benefits will help you identify chances to produce revenue that serve both your mission and bottom line.
― Rupert Scofield, FINCA International