Nonprofits are not immune from impacts of economic uncertainty or other disruption. The present is always a good time to be innovative and think creatively to identify sustainable revenue sources for your organization.
Sustainable nonprofits address challenges with creative ideas, by embracing digital transformation and striving to be forward thinking.
Collaboration and partnerships are valuable resources to maintain and foster. Coming together on an activity or initiative that benefits all parties involved is one way to do this. Efforts can be comprised of nonprofits, for-profits, or a combination of many organizations. Following the joint effort, the relationships created will help you leverage more resources and expand missions.
The benefits may be financial, operational, programmatic or all three. Financially, these relationships allow organizations to share in costs and reduce expenses tied to joint efforts. Operational efficiencies may be achieved by sharing in program development or implementation, allowing your organization to enhance its programs and grow constituents.
Overall, organizations can grow their value proposition by expanding their mission but not their budgets. The result from partnering is that both parties are stronger and better positioned to maintain efficiency and withstand changes in funding, which leads to long-term sustainability.
You can apply the concept of “mining for diamonds” by taking a deeper look at what your organization already has – like relationships, programs, expertise, physical space and technology. Then, ask how you can make it go to work for your organization.
One area to look is your donor base. Remember, individual donors remain the largest category of support for nonprofit organizations. Cultivating meaningful relationships with individual donors also leads to long-term support, planned giving opportunities and legacy gifts.
Nonprofit organizations should remember that individuals are also the ones who ultimately request or determine the gifting of funds from Donor Advised Funds, foundations and corporate grants and sponsorships.
Another area, or diamond, is cash flow and cost containment. The old adage “Cash is King” remains true for nonprofit organizations. Being able to manage your cash flows and cost containment is crucial.
As management and boards plan for the future, there are a few things that can be done to help gain insight, broken down here into three steps.
The first step in determining how to properly manage your cash outflows is to understand where your money goes. For instance, what bills are paid monthly, quarterly, annually, and when are they due? Being able to anticipate annual renewals or expenses that are non-recurring will help you plan for any bumps in the road.
This will also give you a feel for what your average cash outflow consists of, so you can plan for revenues needed or any cash depletion that may occur. By assessing this, it will also give you an idea for how long your operating cash will last and if additional funding sources are necessary.
Having a good understanding of where your money is going will allow you to see if opportunities exist to press the pause button. If a subscription service or rental is not being utilized, check to see if you have the ability to put the cash outflow on hold when needed, or remove it entirely.
If you find yourself in a position where your organization is really cash strapped, ask if there are any options for extensions. Maybe you can delay paying some expenses or work out alternative payment arrangements. If this is necessary, start by having a conversation with your vendors to see what options exist.
Having the proper insight and knowledge into your financials is always important to help protect your cash, especially during a challenging time. Following these steps can help you ensure your organization is positioned successfully to weather any disruption.
Leveraging the power of available resources can help nonprofits stay afloat at even the best of times. Gain the knowledge and insight of our experts in accounting and finance.
As the world relies on digital communication, social engagement can be a lifeline for nonprofit organizations. Consider how the Ice Bucket Challenge that was spread via social media, as one example. This initiative generated $115 million for the nonprofit. That fundraiser was public, with simple instructions and a clear deadline.
Find unique ways to stay relevant and innovative to connect with potential donors. Continue to ask these questions. How can you connect with new and existing donors to keep your mission front and center? Can you utilize social media to allow donors to be recognized by the community of people they most care about? Have you made it easy for donors to reach out to their peers?
Our 2021 Colorado Resourcefullness Award winner, Handmade by Friendship Bridge, provides Guatemalan artisan women with handcrafting skills, learning experiences, education and technical assistance to enable them to sell their handmade goods independently online in local, national and international markets.
Since 2015, Friendship Bridge has served almost 500 artisans in its training programs. During 2020, the Handmade by Friendship program sold nearly 5,000 items through the online store, resulting in $65,000 in revenue that went to 33 artisan clients in Guatemala and their 129 employees. This campaign initiative has resulted in the creation of jobs, increased incomes, sustainable community growth and the ability to maintain centuries-old culture and traditions.
In order to continue to advance your exempt mission as a nonprofit organization, you should stay abreast of changing trends and methods for online giving. Specific action should be taken to connect with individual donors. Place-based and localized giving tends to be the norm with respect to individual giving each year.
However, leveraging the power of social media, online marketing and the ability of an organization to connect with the values and concerns of each generation could provide a distinct advantage. Consider the needs and wants of newer generations of donors who are excited to give and participate in your organization’s mission.
Another critical component will be to review how you conduct donations and events going forward. As we move into a touchless and highly digital environment, how can you make giving easy for current and potential donors?
Bad processes and outdated technology can be a drain to your team’s time and energy.
Finally, as you update technology to stay connected and make your processes more efficient, it is key to include cybersecurity planning in your digital transformation plans. As more personal and financial information is being stored digitally, as opposed to in wall-to-wall filing cabinets, it is also available to many more people in your organization who may unknowingly provide the digital “key” to a cybercriminal unwittingly.
It is critical to keep your donors’ information secure for your organization and for their piece of mind by adopting a culture of cybersecurity. Learn what types of cyberattacks target nonprofits and why they could be targeting your organization.
When an executive director or CEO leaves the organization, whether planned or unexpected, the foundation of the organization can become unstable. Executive succession planning is a part of the core organizational process. It’s an important part that should not be overlooked. Does your board have a plan in the event of something happening to the CEO or executive director of your nonprofit?
Loss of strong and effective leadership can slash morale, reduce productivity, result in lost donations and even threaten your organization’s mission. It’s important to be prepared for unexpected leadership transition.
Change can be a good thing when organizations actively plan for it. If succession plans are not currently on your list, put this on the agenda as soon as possible. Planning will make the process cleaner, smoother and more transparent.
Nonprofits who can be innovative and agile, while focusing on key performance indicators will be poised to continue to move forward into the future. While not easy, having critical conversations about longevity and what success looks like are vital.
Innovation and creativity will help nonprofits succeed now more than ever. Do you have a creative revenue-generating idea? You could qualify for a Resourcefullness Award.