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Does the mission determine the model?
Can nonprofits choose any revenues “model” that they want? Maybe not. What you DO might strongly influence what revenue sources you can pursue. Hospitals might not have much option on membership dues. Arts organizations might not have many options on government contracts. To what extent does YOUR nonprofit’s mission determine which revenue sources it pursues?
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8 Replies
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There has to be a balance between our missions and programs and our organizational and financial capacities. Our mission does drive what we do but how we doit and how we fund it have to be serious considerations .
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Bob: Can you share more about your particular nonprofit? I’m curious how much what you DO (your services or programs) determines which mix of revenue sources you can or want to pursue.
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We are an outdoor public garden. Our earned revenues and contributed support are roughly equal with a little more weighted toward earned revenues. coming out of the pandemic where we received significant funding through the Cares Act (PPP, ERC) we found that our financial and organizational capacities were out of whack with our mission and programs. Our staffing was inadequate as were our financial resources. If we had continued down the current path, we would have fallen into a truly difficult financial situation. We were unsustainable in our current form.
We determined that we needed to develop some blockbuster programming to increase our financial capacity so that we could increase our organizational capacity. It was all driven by our mission and programs (what we do and what we’re so passionate about. We now think out-of-the-box because we have to. It’s not an easy fix and takes time. Our staff is learning why we do the things we do (they often are mainly focused on mission/programs.
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It seems that hard times is when people do that out-of-the-box thinking! Creative networked people can come up with some pretty innovative revenues.
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It’s funny how that works. And when we find these creative solutions, we sometimes have to bring people along kicking and screaming. Some folks hate change…they just want to leave things as they are and move forward. Problem is, and they don’t understand, that there is no “forward” if we leave things as they are.
In finding these new opportunities though, we still have to bring them back to mission.
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Hi! This is Ruth chiming in!
Some people expressed concern about UBIT yesterday when we were talking about earned income. UBIT is “unrelated business income” which can create problems of a number of kinds for nonprofits BUT the key word there is “unrelated.” We’ll go back to UBIT requirements and issues later in this series but this example is great because it just exhibits another revenue producing avenue to actively enact your mission. There is much written and researched about this but are there other examples participants have for:
1, successful earned income efforts that have stood the test of time? or
2. Earned income programs that have fizzled for one reason or another?
I will also ask Hilda if she has an example or two.
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Thanks for bringing up the UBIT issue. As long as the unrelated activities are not substantial (overtaking the mission) and the related tax is taken into account these activities can be lucrative and ongoing. Problem is I find organizations undertake them without asking the UBIT question and then don’t factor in the tax liability when budgeting for them. I look forward to more discussion on this topic!
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Hello visitor! We moderators are checking these forums all the time, so don’t be afraid to chime in. We’d love to hear from you —
Mark