Generating income

Question:

How can nonprofits expand their revenues through earned-income ventures?

Answer:

Regardless of size or need, there are three basic tasks any nonprofit should consider when beginning an earned-income venture.

* Asset Evaluation

Assets are the foundation of any earned-income opportunity. Assets can be tangible or intangible resources controlled by your organization in the form of capital, programs or intelligence.

Capital may include cash, securities, accounts receivable, inventories, contracts, or hard assets like buildings or real estate.

Program assets include unique talents or skills such as evaluations, assessments, instructional or clinical treatments, certified or accredited programs or one-of-kind relations with clients, customers or other providers.

Intelligence assets include technical or high-end expert capabilities, patents or licenses, books, software or specialized trademarks or productions techniques.

Once you’ve identified your assets, prioritize them from strongest to weakest, considering possible combinations of assets that might compliment or add value one to the other.

* Opportunity evaluation

Next, consider what earned-income opportunities lie within your assets by uncovering unique or differentiating qualities and building on them.

Here you are looking for possible open-market opportunities where you can most effectively turn your strongest assets into sales.

Think globally and consider how you are going to position your nonprofit to take advantage of existing or unfolding customer needs.

Finally, remember that earned-income opportunities take place along the parameters of money, markets and management.

In money, you must be able to find the necessary funding to get your venture off the ground and have a reasonable expectation of increasing revenues.

In markets, there must be a perceived need and value by a prospective customer or client.

In management, your organization must be able to develop the necessary expertise or skills to direct the venture’s day-to-day affairs.

* Viability and a business plan

Next is determining if your product is viable.

This includes homework through library and field research on every facet of the industry and local market conditions.

That includes assessing production, delivery and promotion costs, as well as demand for your product and its revenue potential.

You must also consider your differentiating characteristics and how they compare to your competition.

If your research indicates your venture is doable, you then write a business plan and present it to potential funders.

The plan is designed to convince funders you have a well-thought-out roadmap that will diversify your revenues, enhance your mission and lead to long-term sustainable growth for both you and the community-at-large.


Kevin Flattery is director of Nonprofit Business Solutions, a nonprofit consulting firm based in Kansas City, Missouri, that helps nonprofits explore earned-income opportunities.

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