Does Your Organization Have a Diversified Revenue Portfolio?

by | Oct 1, 2013

rising steps made of one american dollar banknotes on white bakground

The recession had a horrendous impact on charitable giving to nonprofits, highlighting the importance of cultivating a diversified revenue portfolio.  Some went out of business entirely, while others have yet to fully recover. The drop in giving from 2008 to 2009 was the largest in more than 40 years, according to the Center on Philanthropy at Indiana University-Purdue University Indianapolis. While an economic crisis of this magnitude will hopefully not occur again in the near future, there are some lessons we can learn. Revenue diversification may be the key to lessening future losses in times of economic difficulty.

The for-profit business community is familiar with the concept of revenue diversification, as a way to mitigate risk and reduce income variability. Most nonprofit organizations rely on only one or two types of revenue, for example, grants and direct donor contributions. While we recognize that there is a different “bottom line” for businesses than for nonprofits, the nonprofit sector can benefit from using similar risk reducing strategies as the for-profit sector. However, it takes careful planning to successfully improve the financial health and sustainability of an organization in this way.

Not only should nonprofits have a plan for how much revenue they need and why they need it, they also need a detailed Fund Development plan on how to get there, not just for today but also for tomorrow. Funding can come from many different sources or “buckets”, including:

  • Individual, Group and Corporate Donors
  • Events – Both large and small, and participatory fundraising (like walk-a-thons and chili cook-offs)
  • Direct Mail and Telemarketing
  • Integrated Campaigns that include online and e-giving
  • Grants – foundations, corporate, government
  • Contracts and fees for service

In the coming weeks, Transform Consulting Group will have a series of blogs on how to tackle these fundraising “buckets” and diversify your revenue portfolio. Transform Consulting Group understands the importance of having a solid Fund Development plan in place. You know that your organization is improving lives and making a difference! Contact us today to learn about how we can assist you with growing and diversifying your organization’s revenue, and help you put your best foot forward to attract funders to invest in your work.


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