1 / 28

The National Assembly

Learn about earned income strategies, importance, and implementation for diversifying income in nonprofits to enhance financial stability and mission effectiveness.

ted
Download Presentation

The National Assembly

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The National Assembly Earned Revenue as a strategy for diversifying income National Center on Nonprofit Enterprise

  2. Earned Revenues • What earned income is. • Why pursue Earned Revenues as a strategy. • Conditions of success. • Taking the right steps. The Nonprofit Entrepreneur

  3. Earned Revenues: terminology Social Enterprise Social Venture Social Entrepreneur Nonprofit Business Commercial Venture Affirmative Business Social Business Earned Income Initiative Pricing a Service

  4. Earned Revenues: definition “…………earning income in a nonprofit entails making products or services available to organizations or individuals, who pay a price that covers some, all of or more than, the costs of these products or services…..”

  5. Earned Revenues: range of activities • Price for a service: Healthcare, counseling • Current service delivered to new audience (stress counseling to for-profit employees) • Leveraging value of assets: - reputation: cause related marketing; - land: parking lot or natural gas • Unrelated business activity: Ben and Jerry’s

  6. Ben and Jerry’s

  7. The National Park Service

  8. Computer recycling

  9. Charging for a service

  10. Earned Revenues: a different type of income? • Needs Wants Clients Customers • Volatility Stability • Dependency Autonomy • Charity Interdependence

  11. Earned Revenues: Why? • More $! • More unrestricted $: - management capacity - independence……advocacy • To Manage Risk - general diversification - protecting particular activity

  12. Earned Revenues: Why? • To Do more Mission • To Do Mission better • To Develop the skills and culture of the nonprofit • To attract more of current types of revenue

  13. Earned Revenues: range of activities John Hopkins Listening Post Project Commercial income % t % e • Improved/expanded Marketing 63 11 • Introduction of/raised fees 56 15 • Borrowed money 27 <5 • Profit-making subsidiary 5 ?

  14. Earned Revenues: Why Not? • Too Expensive • Mission Drift • Management Drift • Other revenue “crowd-out” • Culture clashes/Divisions

  15. Earned Revenues: How? The Nonprofit Entrepreneur…….. …………who thinks economics

  16. Earned Revenues: How? Nonprofit readiness 1 • Clarity of Mission • Client Focus • Strategic Mind-Set • Experience of Change • Effective and Adaptable business systems • Financial Health

  17. Earned Revenues: How? Nonprofit readiness 2. • Leadership: - commitment - consistency - communication - awareness of risks and opportunities

  18. Earned Revenues: How? Nonprofit readiness 3. • Marketing approach to work: - focus on the 4 P’s - ability to identify nonprofit’s assets and their value

  19. Ben and Jerry’s criteria • Nonprofit status • Annual operating budget of more than $5,000,000 • More than 5 years in operation • Job training and life skills development programs for youth and young adults, ages 15 - 21 • Experience operating a social purpose business • Knowledge of the retail foodservice industry and/or franchising • The desire and capacity to operate a social enterprise business • A staff and board with small business expertise • An excellent credit history • Financial acumen and stability • A record of fundraising success • The willingness and the capacity to manage the complexities of developing a new business

  20. Earned Revenues: How? Feasibility of strategy 1. • Clarity of purpose • Understanding of customers • Customer focus • Marketing approach • Clear business model • A product or service people are prepared to pay for – enough to ensure achievement of purpose.

  21. Earned Revenues: How? Feasibility of strategy 2. • People with appropriate experience • Clarity of accountability • Appropriate place in structure • Planning • Management • Review and learning

  22. 10 steps to earned income heaven • Clarify what your nonprofit’ program and revenue priorities. • Assess how well you raise and use resources now: are your revenues diverse; do you spend the right amount on different types of fundraising; have you assessed the efficiency of your program staffing?

  23. 10 steps to earned income heaven • Identify the most cost-effective changes that support program and revenue priorities……and make these happen. Not enough unrestricted revenue…assets still underused….. • Generate and select strategies: - engage people for ownership; - work on criteria first: assets + customer needs = revenues; relate everything back to mission, program and revenue priorities; risks and rewards.

  24. 10 steps to earned income heaven • Assess feasibility and risk in detail, and select options for business planning • Address structural and legal issues • Clarify accountability and reporting protocols • Do the Business Plan • Find and secure money required for implementation

  25. 10 steps to earned income heaven • ……….DO IT>>>> • Incremental steps • Testing and review • Roll-out • Communication, Communication, Communication

  26. Earned Revenues: How? The Nonprofit Entrepreneur…….. …………who thinks economics

  27. ……to achieve mission

  28. The National Assembly Earned Revenue as a strategy for diversifying income National Center on Nonprofit Enterprise

More Related