Where to start?
It’s true, all organizations, no matter the type, have one thing in common: they must manage their sources of revenue to survive. With government cut-backs and tax reform, it’s important to understand what steps can be taken to continue to seek out new sources and manage the sources you have. Without revenue, the organization cannot fulfill its mission. Let’s take a look at four practical steps you can take when seeking out new revenue sources.
Steps to Seeking New Revenue Sources
1. Move Forward!
When a source of revenue has been eliminated, it’s only natural to be disappointed and maybe even a little shocked. This is a great time to look introspectively at the organization and ask a few questions such as:
• Who are we?
• Do our intended audiences know who we are and the services we provide?
• What does our community look like if we aren’t able to continue providing these services?
The answers to these questions help lead us to the next step, creating a new brand narrative that can demonstrate the value of who the organization is and what it does for the community.
2. Create your brand narrative.
What are the most important ingredients to a good narrative? Clear, concise and compelling! Your writing should speak to a hope for a vision of a better world and how your nonprofit proposes to get to that better place. I suggest adding in compelling data that speaks to your mission-driven success. Serious donors want to know who and where the organization is serving and specifically how these services you are providing to them have improved their lives or the dynamic of the community.
3. Seek investments, not donations.
In lieu of seeking “donations,” try positioning your organization as a leader seeking an “investment” into the community at large. To do so in good faith, you will need to make a strong case for how your services and leadership contribute to the common good of making your community a better place for citizens to live, work, and play. The return on investment you and your investors are seeking is social, not financial.
4. Live up to your narrative.
Be aware that your brand narrative is your story, not your fairy tale. Your success at developing new revenue streams will be short-lived if you don’t live up to your narrative and the promises you embed into it. Sound easy? It’s not! Nothing worth doing is ever easy. By living up to your narrative you may find that your business model may need to change as well, and that’s okay.
Key Points to Remember
a. Managing and seeking new revenue sources is a key function of ensuring long-term organization success.
b. Don’t dwell on lost revenue sources. Move forward, create a new brand narrative, seek investments in your organization, and live up to your narrative.
c. Embrace change and move forward. To quote Charles Darwin, “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”
TDT CPAs and Advisors is a public accounting firm specializing in helping nonprofit organizations navigate both challenges and opportunities. We work with over 350 organizations in Iowa and Illinois providing assurance and tax services, as well as best practices consulting. Our clients include social service organizations, foundations, and membership organizations just to name a few.
Amanda Lane, Tax Manager at TDT CPAs and Advisors, P.C., provides an overview of managing sources of revenue. Amanda serves social service organizations, colleges and universities, membership organizations and many others throughout Iowa.