There is an ever-increasing pressure for nonprofits to develop revenue models that are sustainable over the long-term. Funding continues to shift in this uncertain economy that, in turn, demands nonprofit leaders to intentionally assess, monitor and adapt their organizations’ revenue models in the changing environment. The goal of the session is to equip nonprofit leaders with the tools to plan, implement and adapt a revenue model that builds on the organization’s existing strengths and capacity.

1. Nonprofit Revenue Strategies:
Building Models for Sustainability
Mark P. Fulop, MA, MPH
mark@facilitationprocess.com

2. Welcome & Introduction
• Why Are You Here? -challenges, opportunities, ideas?
• Ground we will cover
• Discuss changing conventions & assumptions.
• What is the same, what is different?
• Discuss when is diversity is too diverse?
• Discuss the drivers of autonomy & reliability
• Describe two case studies
• Discuss roles of messaging, accountability & transparency

3. Conventional Wisdom or Stereotypes
• Brainstorm a list
• Diversity is important. Low overhead is good.
• Converse concentration is bad. Earned income in a holy
grail. Endowments are key to long-term survival. There
are too many nonprofits.

4. Opening Assumptions Revenue Models
• Creating a revenue model is thinking about the potential
universe of funding accessible to your organization and
making strategic decisions about preserving, increasing
and/or expanding your revenues.
• Creating a revenue model is not the same as creating or
managing your year to year budgets.
• Creating a revenue model focus starts with a clear
understanding of your true cost of services.

5. Diversity is the wrong starting place
Positive Negative
• Moderates the ups & • Raises Overhead Costs
downs of $ - balanced related to managing &
portfolio. soliciting funds
• Larger dollars derived by
• Each funding stream
adding funders.
brings new task masters.
• Is a proxy for growth that
board members
understand.

6. Real Drivers of Stability
Reliability Autonomy
• Predictability of Operating • The degree to which your
Revenues for cash flow revenues are flexible to
management be redeployed as needed.
• Can also fuel growth & • Flexible money can fuel
maybe innovation, maybe innovation & growth, can
a gap filler. fill in gaps

7. Autonomy Spectrum
Mission Investment
Social Impact Bonds
Pure
Investment Cause Marketing
Venture philanthropy
Corporate
Fee-based Services
Donor advised funds
Government Grants
small
individual gifts
Pure
Giving
Pure Pure
Nonprofit Profit
Adapted from: Raymond, S (2010) Nonprofit Finance for Hard Times. John Wiley & Sones, Hoboken, NJ.

8. What is Your Revenue Model?
Funding % Auto Relia Challenge Opportunity
Government
Foundations
Corporate
Federated
Major Donors
Small Donors
Earned Income

9. Putting it together
Strong services Strong services
high
less innovation & ability to adapt,
possible growth innovate & grow
potential
Reliability
Crisis operation & Ability to adapt to
little resiliency to changes limited
adapt to change ability to grow
and no growth
low high
low Autonomy

10. Pathways for Revenues
Giving Circles
Living
People Foundations &
Charities
• Private Nonprofits
Earned Income
Estates • Corporate
• Operating
• Community
• Trusts
Corporations
Social Media
Self-organized events
Chart Adapted from: Frumkin, Peter. 2006. Strategic Giving: The Art and Science
of Philanthropy (Chicago: University of Chicago Press).

11. When does Social Enterprise make sense?
• Aligns with your organization's mission and
core values
• Leverages an asset or capability that you
already possess
• Addresses a defined but unsatisfied need
and want in the community
• Will generate a financial surplus (or be
financially sustainable)
• You have the acumen to plan and the
patience to see the return.
Horsnell, A. & Pepin, J. (July 2002). Social entrepreneurship basics, Front & Centre, Vol. 9, No. 4; pg. 1,6,7,8
http://www.authenticityconsulting.com/npbd/Social%20Entrepreneurship%20Basics.pdf

12. Earned Income does not Equal Social Enterprise
• Are there other ways to leverage assets or
capabilities that you already possess:
• Renting Extra Space
• Setting up a sliding scale fee for service
• Provide training or consulting
• Others
• You have the acumen to plan and the
patience to see the return.

13. Operating Revenue versus Capital
Operating Revenue Investment Capital
• Pays the Bills • Investment in Assets
• Tied to Service Provision • Investment in Capacity
• Managed as Income & • Uncoupled from Operations
Expense

14. Diversify in proportion to your capacity
What works for one – Works for one
Reliable - Gov
Reimbursement
Autonomous - Small
Donations/Events
Autonomous - Sliding
Scale

15. What is Your Revenue Model?
Funding % Auto Relia Challenge Opportunity
Government
Foundations
Corporate
Federated
Major Donors
Small Donors
Earned Income

16. Case Studies – Opening Principles
• Assess where you are today and look for opportunities
• Create a plan that combines building on your strengths,
developing new strengths. There might be precursor work to
implementing a plan.
• Think about maximizing your existing relationships and
developing new ones that support your plan.
• Know that reinventing your Funding model will take time &
resources.
• Monitor performance, execute and adjust (with reason).

17. Case Studies – Opening Principles
• Assess where you are today and look for opportunities
• Create a plan that combines building on your
strengths, developing new strengths. There might be precursor
work to implementing a plan.
• Think about maximizing your existing relationships and
developing new ones that support your plan.
• Know that reinventing your Funding model will take time &
resources.
• Monitor performance, execute and adjust (with reason).

18. Case Study – Community Services
services are unique but not basic needs
16%
Government
4%
6% Donations
Fee for Service
Foundation
74%

19. Strategic Challenges & Opportunities
• 3 Government contracts were incrementally cut over several years creating a gap
between revenues & true cost of services. Reliable but shrinking - 2 have low
autonomy & one fairly high autonomy
• Executive Director does all the fundraising & the board sporadic in their support
(60% give) – No development staff
• 9.5 FTEs & 13 Staff. Salaries flat for 2 years benefits are PTO, $200 pref. dev &
75% of health insurance premium.
• Foundation proposals have not scored well. More unfunded than funded often
loosing out to basic needs. When available was typically not very aiutonomous
• Volunteer pool of over 100 & 1,200 clients/year are never asked to donate beyond
passive mailers.
• Fee for service community training –when done– generates profits most of the
time.

20. How would you change the Model
• Think about this nonprofit scenario and embellish the story if
you want…
• Talk about list of opportunities & challenges that the agency
faces and develop a strategy of how you would change the pie.
Develop the rationale to support your strategy.
• Identify the steps that the agency should pursue to position
themselves to change their funding mix.
• How would you communicate the plan to key stakeholders?
• What would you monitor and how

21. Case Study – Community Services
services are unique but not basic needs
16%
19%
Government
Donations
Fee for Service
65%

22. Strategic Approach
• Engaged the board in creating a fund raising plan &
implemented 1 year.
• Started courting a foundation hired a grant writer to help
• Leveraged the board engagement & plan for a foundation
grants to hire a development coordinator to increase donor
base & market fee-for-service. Investment Capital.
• Used unrestricted funds to “buy” staff time to devote to fee for
service training.
• Refocused foundation outreach towards developing
investment partners.

23. Case Study – School Enrichment
8% 6%
11% Government
4% Family Foundations
Corporate
Individuals
Partnerships
71%

24. Strategic Challenges & Opportunities
• Recently transitioned from grassroots to established small agency.
• 4 FTE’s with 11 staff. Part time staff Virtually no benefits.
• Family Foundations have made multiyear commitments.
• While government education money decreases overall, the outcomes
data of the program create a compelling story to be competitive for
limited government dollars. Three programs in area addressing the same
needs but different approaches.
• Still small enough that they are seeking a reliable & stable funding model
• Founder had high value connections in the community & some corporate
connections.

25. How would you change the Model
• Think about this nonprofit scenario and embellish the story if
you want…
• Talk about list of opportunities & challenges that the agency
faces and develop a strategy of how you would change the pie.
Develop the rationale to support your strategy.
• Identify the steps that the agency should pursue to position
themselves to change their funding mix.
• How would you communicate the plan to key stakeholders?
• What would you monitor and how

26. Case Study – School Enrichment
10% 15%
15% Government
Family Foundations
Corporate
Individuals
25% Partnerships
35%

27. Strategic Approach
• Convened their funders and hosted an investors briefing to
discuss their strategic plan and direction. Sought stable
commitments over time.
• Investing resources in developing marketing and brand
materials that will be used to leverage corporate investments.
• Redesigned the board from a working board to a governance
board with deeper civic reach
• Connected to the Cradle-to-Career initiative and trying to
connect with the Governor's early education initiatives.
• Engaging staff from the Grant-maker affinity groups.

28. Communicate your Plan
• Inform Stakeholders and
Current Donors of your plan
• Keep Stakeholders and
Current Donors informed of
progress
• Magnify the communications
by being just a little more
accountable and transparent
than you are comfortable
with.

29. Summary Principles
• Managing your existing budget and understanding true cost of
programs and services matter
• Autonomy & Reliability trump the Diversity debate.
• Nonprofits often need capital in addition to operating revenue
• Business planning is a part of good strategic planning or
parallel to it.
• Communication, accountability & transparency are not optional
• What works for one - works for one

30. Facilitation & Process, LLC is a consulting firm based in Portland, Oregon. With Facilitation & Process, you are not
our client but rather we are your partner in strategy, performance improvement and success. We design customized
approaches that are tailored to your needs. Organizations that benefit most from working with us are those who are
tired of the same old solutions and are ready for the fresh, imaginative and objective. We help you think about your
organizational context and the larger community ecosystem in which you operate. We help you think
systemically, systematically with a focus on the long view.
To help you create solutions, we offer a range of supporting services including performance
assessments, facilitation, strategic, capacity, business & social impact planning, board & staff development and
retreats, and developing meaningful community engagement.
Contact us for a free initial consultation
Mark P. Fulop, MA, MPH
mark@facilitationprocess.com
(503) 928-4082
Skype: facilitation.process
Website http://www.facilitationprocess.com
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