Exploring Earned Revenue
Nonprofits often rely on donations and grants to fund their operations, but these sources of income can be unreliable and unpredictable. Earned revenue can provide an additional revenue stream and help diversify a nonprofit’s income sources. SVP Austin provides pro-bono advising to nonprofits in the Central Texas area and earned revenue is one of our specialties. We recently hosted an Earned Revenue Ideation Workshop with four nonprofits in Austin participating: Athletes for Hope, AVANCE Austin, Girlstart, and Sunday Lunchbox.
During the workshop, we brainstormed with nonprofit leadership to identify products/services that fit in with their impact goals, discussed potential key markets, and helped determine any next steps. Our goal is to create actionable paths that leave nonprofits feeling empowered to further explore potential earned revenue streams. In our post workshop survey, all the participating nonprofits noted that they were inspired by the amount of options that were available to them to get where they wanted to go next, and only wished to have more time to brainstorm!
The results of thoughtful earned revenue planning can be huge for nonprofits, potentially helping them acquire more capital to further their impact goals. Over the past year, we worked with American YouthWorks to help them design and execute the YouthBuild Austin Print Shop, a newly launched earned revenue initiative to provide job training for youth participants. Today, the print shop is up and running, providing revenue for American YouthWorks as well as creating value for young community members entering the workforce.
Are you a nonprofit interested in exploring earned revenue as an additional source of funding? Here are some of the main reasons why it can make such a difference in your organization:
Diversifying Income Streams: By exploring new earned revenue streams, nonprofits can diversify their income sources, reduce their reliance on donations and grants, and create a more stable financial base.
Increased Control and Flexibility: When a nonprofit generates revenue through earned sources, it has more control over how that revenue is used. This allows the nonprofit to be more flexible and responsive to changing needs and opportunities.
Greater Accountability: When a nonprofit generates revenue through earned sources, it must be accountable to its customers and clients, just like any other business. This can create a culture of accountability and customer service within the organization, which can ultimately benefit the nonprofit's mission and reputation.
Innovation and Creativity: Developing new earned revenue streams requires creativity and innovation. By exploring new ideas and approaches, nonprofits can become more dynamic and adaptable, which can help them stay relevant and impactful over the long term.
Improved Financial Sustainability: Ultimately, the goal of earned revenue ideation is to help nonprofits become more financially sustainable. By generating revenue through earned sources, nonprofits can invest in their operations and programs, expand their impact, and achieve their mission in a more sustainable and effective way.
By exploring new ideas and approaches, nonprofits can become more dynamic, innovative, and adaptable, which can ultimately benefit their stakeholders and the communities they serve. However, It’s important to remember that launching an earned revenue program is hard work. Just as many new businesses fail, so do many earned revenue programs. That said, there are many ways to minimize the impact of failure, including starting small, developing clear performance targets, and launching the endeavor as a separate initiative from core services.
Are you a nonprofit wanting to explore ways to create earned revenue for your organization? Reach out to us! We’d love to learn about your organization and how we can help you reach your goals.
