Building Multiple Revenue Sources

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Building MultipleRevenue Sources

STRENGTHENING NONPROFITS:A Capacity Builders Resource Library


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TABLE OF CONTENTS

INTRODUCTION ........................................................................................................................................4

OVERVIEW ................................................................................................................................................. 5

REVENUE SOURCES ..................................................................................................................................5

Annual or sustained gits .................. ................... .................... .................... .................... ................... ................... 6

Major gits ................... .................... ................... .................... .................... ................... .................... .................... ...... 6

Planned gits .................. ................... .................... .................... ................... .................... .................... .................... .. 6

Foundation grants ................. .................... .................... .................... ................... .................... .................... ............ 6

Causerelated marketing ................... ................... .................... .................... ................... .................... ................... 6

Corporate giving programs ................. .................... ................... .................... .................... ................... ................ 7Earned income activities .................. ................... .................... ................... .................... .................... ................... 7

Unrelated business income .................... .................... ................... .................... .................... ................... ............. 7

Inkind donations ................... ................... .................... .................... ................... .................... .................... ............ 7

Supporting organizations .................... ................... .................... .................... .................... ................... ................ 7

Benet events ................... ................... .................... .................... ................... .................... .................... ................... 8

State and local municipalities ................... .................... .................... ................... .................... .................... ......... 8

Churches and denominations .................. .................... .................... ................... .................... .................... ......... 8

Federated unds .................. .................... ................... .................... .................... .................... .................... ............... 8

Online donations ................... .................... .................... ................... .................... .................... ................... ............. 8

MORE ABOUT ONLINE TOOLS TO ENHANCE FUNDRAISING ................................................................. 8

Causes on Facebook .................... .................... .................... ................... .................... .................... ................... ...... 9

Network or Good .................. .................... .................... ................... .................... .................... .................... ............ 9

AlumniFidelity ................... .................... ................... .................... .................... .................... ................... ................. 10

FirstGiving ................... .................... .................... ................... .................... .................... ................... .................... .... 10

Managing Change when Adopting Web 2.0 Fundraising Tools ............................... .................... ...........11

THE REVENUE DEVELOPMENT PROCESS .............................................................................................. 11

Step 1: Assess Goals or the Future and Current Resource Capacity ................. ................... ..................11

Step 2: Identiy Your Income Strategy .................... .................... ................... .................... ................... ........... 17

Step 3: Select an Appropriate Revenue Source ............................................................................................20

Step 4: Develop and Execute a Revenue Source Plan ................................................................................26

Step 5: Evaluate Results and Strive or Improvement .................. .................... .................... ................... .... 28


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SUMMARY ...............................................................................................................................................30

APPENDICES ............................................................................................................................................ 31

APPENDIX A: Resources .................... .................... ................... .................... .................... .................... .................... 31

APPENDIX B: Glossary ..............................................................................................................................................34

APPENDIX C: Resources or Online Giving and Social Media Marketing .................. .................... .......... 36

APPENDIX D: Web 2.0 Tool Report Card ................... .................... ................... .................... .................... .......... 37

APPENDIX E: Goals and Financial Resources ....................................................................................................39

APPENDIX F: Revenue Source Plan Summary ................... .................... ................... .................... .................... 42

APPENDIX G: Systems Area Summary ................................................................................................................43


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INTRODUCTION

Te Compassion Capital Fund (CCF), administered by the U.S. Department o Health and Human Services,provided capacity building grants to expand and strengthen the role o nonprot organizations in their abilityto provide social services to low-income individuals. Between 2002 and 2009, CCF awarded 1,277 grants,

and the CCF National Resource Center provided training and technical assistance to all CCF grantees.Strengthening Nonprofts: A Capacity Builders Resource Libraryis born out o the expansive set o resourcescreated by the National Resource Center during that time period, to be shared and to continue the legacy oCCFs capacity building work.

Strengthening Nonprofts: A Capacity Builders Resource Librarycontains guidebooks and e-learnings on the

ollowing topics:

1. Conducting a Community Assessment

2. Delivering raining and echnical Assistance

3. Designing and Managing a Subaward Program

4. Going Virtual

5. Identiying and Promoting Eective Practices

6. Leading a Nonprot Organization: ips and ools or Executive Directors and eam Leaders

7. Managing Crisis: Risk Management and Crisis Response Planning

8. Managing Public Grants

9. Measuring Outcomes

10. Partnerships: Frameworks or Working ogether

11. Sustainability

12. Working with Consultants

Who is the audience or Strengthening Nonprofts: A Capacity Builders Resource Library?Anyone who is interested in expanding the capacity o nonprot services in their community rom rontline service providers to executives in large intermediary organizations will benet rom the inormationcontained in this resource library. Te National Resource Center originally developed many o these resourcesor intermediary organizations, organizations that were granted unds by CCF to build the capacity o theaith-based and community-based organizations (FBCOs) they served. As such, the majority o the resourcesin Strengthening Nonprofts: A Capacity Builders Resource Librarysupport intermediary organizations in theircapacity building eorts. However, unders o capacity building programs (Federal program oces andoundations) and the nonprot community (including FBCOs) at large will also nd these resources helpul.In addition, individuals working to build capacity within a program or an organization will be able to usethese resources to support their eorts to implement change and make improvements.

Te Building Multiple Revenue Sourcesguidebook will be helpul to any nonprot seeking to learn aboutnew sources o revenue and how to pursue them.

Who developed the Building Multiple Revenue Sources guidebook?

Te guidebook was originally developed by the National Resource Center with assistance rom Paul Edwards.It was updated in 2010 or the Department o Health and Human Services by the National Resource Center.


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OVERVIEW

Its usually a sae bet to assume that a nonprot organization would like to increase its revenue and acquiremore unds. High-perorming nonprot organizations oster a culture o constant improvement and regularlyask, How can we grow and sustain increasing levels o income?

Tere are a number o dierent income growth strategies that nonprot organizations can use to generatemuch-needed revenue, and each strategy comes at a dierent price. While some revenue sources are easyto implement and require little technical expertise, others might be perectly suited or the missions andstrengths o your organization, yet require a more signicant investment.

Tis guidebook provides an overview o teen dierent revenue sources, insight into how online tools canhelp support revenue development, a step-by-step guide to developing a new revenue source, and analysistools to help you assess your organizations strengths and limitations. Ater reading this guidebook, youwill know how to evaluate, start, and sustain one or more new income or revenue sources. Ideally, the tools,resources, and knowledge included in this guidebook will enable you to raise more money through thedevelopment o a targeted strategy that caters to your organizations stage o development, strengths, andcommunity assets.

Some o the oundational terms and phrases reerenced throughout the guidebook are dened below. Otherterms, indicated in bold throughout the text, are dened in the glossary ound in Appendix B.

Financial resources Te various assets o your organization, rom actual cash, property, and inventory,to your sta and volunteers, goodwill, reputation, constituent base, board members, and partners o yourorganization.

Income strategy Te direction you will take in the coming twelve months to generate more income,whether contributed, earned, or some other orm. Organizations can choose to raise cash rom existingrevenue sources; raise cash rom a new source; orm an alliance or partnership with an organization thatbrings cash; or orm an alliance or partnership with an organization that brings in-kind resources.

Matching Te value o cash, in-kind, and other contributions contributed by non-Federal third parties.

Revenue source A discrete income source with its own characteristics and requirements. It can beearned income or unearned income. Each o teen discrete income streams is called a revenue source.

Tese denitions will gain meaning as you read through the revenue development process, apply the incomestrategies, and evaluate the revenue sources or your potential use.

REVENUE SOURCES

Trough the course o this guidebook we will reerence teen dierent types o revenue sources, includingannual or sustained gits, major gits, planned gits, oundation grants, cause-related marketing, corporategiving programs, earned income activities, unrelated business income, in-kinddonations, supportingorganizations, benet events, state and local municipalities, churches and denominations, ederated unds,

and online donations.


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Annual or sustained gits

Annual or sustained git programs include one or more undraising programs that generate sustainablegit support on an annual or more requent basis. Annual programs acquire donor names using an oercommunicated through advertisements on radio, television, direct mail lists, e-mail lists, phone lists,etc. When a donor has given at least twice, they are considered a sustaining donor. Organizations may

cultivate annual or sustained git programs through direct mail, the Internet, monthly donors, anity orclub programs, honor or memorial giving, telethons, etc. For example, National Public Radio conductsmembership campaigns throughout the year, recruiting new and returning members both on the air and

through its website.

Major gits

Major gits, oten rom an individual, are large, with the amount required to qualiy as a major gitdetermined by the receiving organization. Prospect names are identied through screening o annualsupporter lists, list rentals, personal reerrals, and public relations events. Prospective donors o major gits arequalied through electronic and personal screening, and usually cultivated or a period o time beore ormal

solicitation. Asking or a major git usually involves negotiation between an organizational representative andthe donor. Many major gits include restriction or use, and may involve a pledge or letter o intent or theunds, as well as require personalized recognition. For example, the John L. and Helen Kellogg Foundationdonated $10 million to the business school at Northwestern University, and as recognition o this major git

the school was renamed the Kellogg School o Management.

Planned gits

A planned git is a large git rom a person given in the event o his or her death. Te process o plannedgiving is structured, integrating sound personal, nancial, and estate-planning concepts with the prospectsplans or lietime or testamentary giving. A planned git has tax implications and is oten transmittedthrough a legal instrument, such as a will or trust. Examples o planned giving instruments include pooled

income unds, charitable remainder trusts, insurance gits, lead trusts, bequests, etc.

Foundation grants

A oundation is an organization created rom designated unds rom which grants are distributed to not-or-prot organizations or, in some cases, to people. A grant is a nancial donation given to support aperson, organization, project, or program. Most grants require research by the organizations sta andsubmission o an application. Grants are awarded to nonprot organizations according to the oundationsspecic guidelines, limitations, and assets. For example, the Open Meadows Foundation supports domesticand international projects that are led by and benet women and girls, particularly those rom vulnerablecommunities. Te Foundation supports projects that reect the diversity o the community served by the

project; promote building community power; and encourage racial, social, economic, and environmentaljustice.

Cause-related marketing

Cause-related marketing is an agreement between a or-prot organization and a nonprot organization inwhich the or-prot uses the name and reputation o the nonprot to promote its product. In return, theor-prot corporate partner provides nancial support to the nonprot according to a predetermined ormula


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based on sales and purchases. For example, Product Red raises unds by partnering with iconic brands suchas Apple and American Express that use the Product Red branding in some o their products and donatea portion o the proceeds to Te Global Fund, an organization that ghts HIV/AIDS, tuberculosis, and

malaria around the world.1

Corporate giving programsCorporate giving reers to donations by or-prot companies, usually in the orm o a grant programthat is established as part o the corporations annual budget and controlled by the corporation. In somecorporations this is separate rom the marketing unction and rom any corporate oundation. Manycorporations, such as Wal-Mart and A&, have established oundations to provide grants and nancial

assistance to organizations that align with specic missions urthered by the oundation.

Earned income activities

Earned income activities reer to the revenue a nonprot organization receives or product sales, ees orservices rendered, interest generated rom investments, and royalties generated rom owned and copyrighted

works. Earned income is derived or activities substantially related to the organizations tax-exempt purpose.An example o earned income activities related to an organizations mission is D.C. Central Kitchens FreshStart Catering service. D.C. Central Kitchen is a nonprot organization that provides counseling, outreach,and meals to the homeless in the D.C. area. Fresh Start Catering, a social enterprise o D.C. Central Kitchen,

helps generate revenue to support the nonprots eorts by providing catered meals to paying customers.

Unrelated business income

Unrelated business income reers to any revenue that is received due to any legal trade or business conductedby a nonprot organization to make money in a way not directly related to the organizations ederallytax-exempt mission. For example, a museum has an auditorium that it uses to show educational lms in

connection with its mission. Tey also use the auditorium to show motion pictures to the public when themuseum is closed. Tis use is dened by the IRS as unrelated business income. See IRS publication 598,

ax on Unrelated Business Income o Exempt Organizations, or more details.

In-kind donations

In-kind donations reer not to money, but to donations o goods or services such as the contribution oequipment, inventory, supplies, space, or sta time. Te donor may place a monetary value on such acontribution or tax purposes. For example, an electronics company might donate laptop computers to an

aterschool program serving youth in highly impoverished areas.

Supporting organizations

A supporting organization is a qualied charity operated, supervised, or controlled by or in connectionwith one or more specied public charities. Supporting organizations include groups such as an auxiliary,association, riends group, or other nonprot organization. For example, the American Legion Auxiliary, thenations largest womens patriotic service group, was originally ounded in 1919 to help support the eorts o

the American Legion, the nations largest veterans service organization.

1 Join(RED), Te (RED) Idea, http://www.joinred.com/aboutred .
http://www.irs.gov/pub/irs-pdf/p598.pdfhttp://nrepp.samhsa.gov/http://nrepp.samhsa.gov/http://www.irs.gov/pub/irs-pdf/p598.pdf


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Beneft events

Benet events are social events rom which net proceeds are designated as a donation to one or more causes.Examples include races, balls, carnivals, bazaars, galas, concerts, etc. For example, the National Guard YouthFoundation holds an annual ChalleNGe Champions Gala, a ormal event to honor and raise unds or theNational Guard Youth ChalleNGe Program.

State and local municipalities

State and local municipality revenue sources reer to unds that are under the direction and discretion o anon-Federal agency. Tese sources can include state grants, local municipality grants and in-kind services,allocations o Federal block grants to a state or municipal agency under a Federal authority, and state andmunicipal bonding authorities.

Churches and denominations

Churches and denominations will oten collect cash and in-kind contributions rom a local church, churchoundation, denominational oce or church-run service agency, ministerial associations, regional trans-

denominational organizations, and associations like the National Association o Evangelicals or the NationalCouncil o Churches.

Federated unds

Federated unds, also sometimes called community nds, reer to the monies raised or a cooperative group ononprots through one o several employment-related annual giving campaigns. Examples o ederated undsinclude the United Way, Combined Federal Campaign, and Combined Health Appeal.

Online donations

Online donors use web-based tools to make contributions. Donors tend to give online because it is a ast

and simple way to oer support to an organization. Some donors have existing relationships with theorganizations and substitute a direct mail donation with an online donation. Other donors use the web tosearch or organizations in their communities or around the world that have missions and goals they want tosupport. Successul online donation campaigns have been linked to the use o social media marketing toolssuch as blogging, podcasting, Facebook, Youube, witter, message boards, vlogging, and wikis.

For most nonprot organizations, online giving currently represents a small percentage o their totalundraising revenue. However, given the ast pace o technology integration into our daily lives, we canexpect that online donations will continue to grow. One study projects that by 2020 online donations willbe the majority donor source i nonprots invest the time and resources into establishing a strong websitepresence.2 Appendix C lists resources to learn more about establishing an integrated online giving and socialmedia marketing strategy.

MORE ABOUT ONLINE TOOLS TO ENHANCE FUNDRAISING

Using Web 2.0 tools can be a powerul way to raise unds, as they empower supportersboth inside andoutside o your organizationto raise money or you. Web 2.0 tools allow sta to make use o their personalnetworks and reach people with whom you may otherwise not have had contact. Te web also enables yoursupporters to customize and personalize their own messaging.

2 Jakob Nielsen, Donation Usability : Increasing Online Giving to Non-Prots and Charities,Alertbox, 30 March 2009,http://www.useit.com/alertbox/nonprot-donations.html .
http://www.useit.com/alertbox/nonprofit-donations.htmlhttp://www.useit.com/alertbox/nonprofit-donations.html


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Additionally, web tools allow or easy reporting and inormation-gathering on your donors. You can easilytrack who gave money, how much, and when. And the web is great or bringing attention to mini-undraisingcampaigns based around a specic project or event.

Te webs capacity or real-time donation tracking and viral marketing make it a great tool or undraising.Using the web, your supporters can create personal appeals to raise money or your organization. You might

hear this concept reerred to as citizen philanthropy or viral undraising.

Some examples o Web 2.0 tools or use in enhancing undraising include Causes on Facebook, Network orGood, AlumniFidelity, FirstGiving, GlobalGiving, and Blackbaud. Reer to the Web 2.0 ool Report Cardin Appendix D or detailed ratings o the cost, key benets, drawbacks, security, and usability o these sixtools.

Causes on Facebook, Network or Good, AlumniFidelity, and FirstGiving are explored in greater detailbelow. Appendix C oers additional resources or learning about online donations and social media or

marketing and undraising.

Causes on Facebook

Facebook Causes are a great tool or quickly generating word o mouth about your organization. Because theaverage age o a Facebook user is twenty-six, the site is a great way to reach young adults. Its also great orspreading the word about your cause, but it is less eective or raising unds.

You will need a Facebook account to create a cause at http://apps.acebook.com/causes. In establishing acause, you can enter your mission and designate an organization youd like donations to go to. As long as anorganization is a registered nonprot with the IRS, it can receive donations through Causes on Facebook.

Facebooks interace allows users to like or become a an o your cause, which requires no commitment ormonetary donation. Tis is an easy way or people to simply show that they support what your group standsor.

Facebooks News Feed eature will also publish a line item noting that a user has become a an o yourcause. Tis will be visible to the users entire network o Facebook riends. You may nd a ripple eect iscreated as more and more people learn about your group through their own connections. Tis viral qualitymakes Facebook a useul tool or recruiting volunteers.

Explore various cause pages or yoursel to discover additional eatures, donation and membership trackingtools, and ways to spread the word. You can search causes by category, including Arts & Culture,Education, Environment, Human Services, and Public Advocacy, among others.

Network or Good

Network or Good is simple to use, as no organizational registration is necessary, and a user can create aundraising campaign in under ten minutes. Te site oers some basic tools that make undraising easy: aDonate Now button can be placed on your page, giving users one place to click to make a donation, and anE-mail Now button oers an easy outreach tool or contacting supporters. Te site also eatures a sectioncalled Fundraising123, which includes trainings and webinars to help you learn how to eectively raisemoney.

Network or Good is connected to GuideStar, a database o all registered nonprots that draws inormationdirectly rom the IRS. As long as your organizations inormation is up to date with the IRS, supporters willbe able to search or and nd you on Network or Good and send donations directly to your group.
http://www.facebook.com/causeshttp://apps.facebook.com/causeshttp://www1.networkforgood.org/http://www2.guidestar.org/http://www2.guidestar.org/http://www1.networkforgood.org/http://apps.facebook.com/causeshttp://www.facebook.com/causes


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Network or Good also allows you to create charity badges, customizable widgets that share inormationand collect donations. Te badges share basic inormation about a cause using one image, 250 characters otext, and a video. Once youve created your badge by walking through the steps on Network or Goods site,you can post it elsewhere on the web by using an HML code. You can paste this code into e-mails, e-vitesor web invitations, MySpace pages, or anywhere else that accepts HML. Youll also be provided with aunique web address or your badge. You can paste this link into e-mails, onto Facebook, etc. By clicking on

it, users will be taken to a site that has only your charity badge on it. Te badge also tracks donations andnumber o donors in real time.

AlumniFidelity

AlumniFidelity, a site originally created to help schools increase alumni donations, has now assisted hundredso undraising campaigns in raising a combined total o more than $1 million. Nonprot supporters can alsouse the site to raise unds or campaigns or events.

AlumniFidelity oers more customization and personalization than Facebook or Network or Good, itsundraising pages are ideal or events like an annual campaign, and the pages are oten used with charityruns and walks.

It usually takes about one week to set up a page on AlumniFidelity, and the site charges a 7 to 7.5 percentee on all donations to cover administrative costs. However, ater you have registered your organization onAlumniFidelity, supporters can create a page to undraise or you, changing the page branding to match thato your organization.

Te site also eatures prominent donate buttons, allowing you to share your cause via e-mail, and itmanages your contacts and communication with your supporters.

FirstGiving

FirstGiving oers simple tools or your supporters to set up online undraising pages. Te site eatureshelpul tools such as resources, requently asked questions, reports on donation activities, and charts trackingunds raised. Te easy-to-use site walks users and nonprots step-by-step through the process o setting up aundraising page. As with Network or Good, FirstGiving is connected to GuideStar, which means that aslong as your organization is a registered nonprot with the IRS, supporters will automatically be able to ndyou on FirstGivings website.

A supporter o your organization or cause can create an online undraising page with your organizationsname and logo. Supporters can personalize their page with a photo, video, and text description about theorganization or their personal connection to it. I supporters have a Flickr account, they can link to it anddisplay slideshows with additional photos.

You can use FirstGiving to set a undraising target, and your page will show real-time updates on your

progress. Your supporters can donate directly through your page, but FirstGiving also allows you to trackand enter donations youve received ofine, so your page reects an accurate total o all the money youvecollected.

Beore implementing any tool, youll need to identiy your organizations needs, as well as the needs o thepeople who will use it, such as your organizations volunteers or partners. Consider whether consultants,clients, or even your board o directors will be impacted by your decision to use a web undraising tool. Tesepeople are your key stakeholders.
http://www.alumnifidelity.com/http://www.firstgiving.com/default.aspxhttp://www.firstgiving.com/default.aspxhttp://www.alumnifidelity.com/


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Managing Change when Adopting Web 2.0 Fundraising Tools

Organizations must be sensitive to managing change when choosing and adopting a Web 2.0 tool to enhanceundraising. Consider the ollowing:

How will you communicate your decision to your stakeholders? Should you have an in-person meeting oris e-mail communication sucient?

How will you train sta or volunteers to use the web undraising tool? How much time will you need toinvest and who is the best person to lead a training eort?

What will be your plan or ongoing maintenance o the tool? How much time will be required and whatregular content updates will need to be made to keep supporters coming back?

Once your organization has selected and begun using a web undraising tool, youll want to evaluate itseectiveness. Most o the tools reviewed here track visitors to your undraising site and provide data ondonations you are receiving. alking to your sta and volunteers and gathering their opinions on the tool willalso help you gauge how useul and meaningul it is to your organization.

Keep these tools in mind as you review the revenue development process and assess ways to improve yourorganizations undraising abilities. Reer to Appendix C or more inormation on Web 2.0 tools and theirusability.

THE REVENUE DEVELOPMENT PROCESS

Te ve-step process detailed below can guide you through the evaluation o your revenue-generating optionsand help you make an inormed choice regarding which strategies will work best with your organizationsgoals, limitations, and assets. A checklist at the end o each step will help you eectively move rom one step

to the next.

Te process o analyzing current revenue and generating more revenue should involve organizationalstakeholders, including your board and sta leadership, as each step o the process may require supportingwork products and processes. Te revenue development process comprises the ollowing steps:

1. Assess goals or the uture and current resource capacity

2. Identiy your income strategy

3. Select an appropriate revenue source

4. Develop and execute a revenue resource plan

5. Evaluate results and strive or improvement

Step 1: Assess Goals or the Future and Current Resource Capacity

Te rst step o the revenue development process helps you organize your goals, project where you hope tobe, weigh your strengths and weaknesses, and evaluate the opportunities and threats your organization aces.During this step, attempt to be as detailed and candid as possible, as this can help ensure that the plans ordevelopment identied later are clear, concise, and realistic.


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Goals

o help you organize the process o identiying goals, use the Goals and Financial Resources worksheet oundin Appendix E, and reerence the excerpt o section A o the worksheet below.

Section A: Sample Goals

FINANCIAL RESOURCE WHERE WE ARE TODAY WHERE WE NEED/WANT TO BE

Annual revenue

Special project revenue

Number o donors

Number o volunteers raising revenue

Fundraising expense

Other

Your organization likely has a variety o goals it hopes to meet in the coming weeks, months, and years.Section A o the Goals and Financial Resources worksheet helps you systematically review your revenue-related goals. Use the instructions below to complete Section A:

Annual revenue: List the gross amount you receive rom all sources. I one o your goals in starting a newrevenue stream is to grow this base, then indicate in the ar-right column what you hope to achieve.

Special project revenue: List any extraordinary or non-recurring revenue, as well as the hoped orincrease in the ar-right column.

Number o donors: List your total number o annual supporters, and indicate any increase you want in thear-right column.

Number o volunteers raising revenue: I you use volunteers to raise unds or generate other revenue, listthe number here, and indicate any desired increase in numbers in the ar-right column.

Fundraising expense: List the amount you are spending to generate your gross annual revenue. I youdesire to change this number, indicate that goal too.

Other: List any other goal or goals you have or adding or enhancing a revenue source.

Next, move onto Section B o the worksheet and describe and list the revenue you currently receive romthe teen dierent revenue sources in the center column, while using the last column to indicate any goalsyou may have regarding improving or implementing a new revenue source. Reer back to revenue sourcedescriptions on pages six through eight i you are having any diculty.


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SWOT Analysis

Ater you have listed your goals and your present revenue sources, you will need to assess your potential orgenerating revenue by using a simple tool called a SWO analysis to identiy your organizations strengths,weaknesses, opportunities, and threats.

A SWO analysis, oten used to assist in strategic planning processes, enables organizations to assess theircurrent nancial resource strengths and weaknesses and evaluate the opportunities and threats around them.Te result o an accurate SWO analysis is a rened set o statements about your organization that will helpyou target your ocus in generating more revenue.

It is oten benecial to involve board leadership and senior sta in the SWO analysis process, as the resultscan oten generate valuable discussions regarding the direction and ocus o the organization.

o complete a nancial resources SWO, reerence the table below or guidance, then complete Section C othe Goals and Financial Resources worksheet.

Section C: SWOT Statements

SWOT AREA STATEMENTS ABOUT YOUR ORGANIZATION

STRENGTHS

Try not to be modest when reviewing you organizations revenuegenerating strengths. Be

realistic, and think about your resource strengths in relation to other nonprot organizations inyour service area and your competitors. Consider the ollowing questions:

What nancial resources do you have (cash, people, exper tise, etc.)? O the teen revenue sources, which one(s) generate most o your income? What are your revenuegenerating advantages? Are any o these unique to you? What do you do well in undraising? What do your constituents see as your resource strengths?

WEAKNESSES

When identiying your organizations weaknesses, take a hard look at your results over the past

several seasons in all areas o resource generation.

Most organizations will have several revenuegenerating activities that are working well, somethat are marginal, and a ew that are poor. Consider the ollowing questions:

Are you underutilizing your board, community relations, development budget, reputation, orsta? I so, what would it look like i you were using them ully?

Which o your present revenuegenerating activities could you improve? Which do you do poorly? What revenuegenerating tactics should you stop doing altogether? Are other similar

organizations in your geographic area doing any better than you?

Are you online? Do you accept donations online? How up to date is your website?

OPPORTUNITIES

Opportunity comes in all shapes and sizes and rom unexpected places and people. It might

occur in a report or study that eatures your organization or area o service. It may appear during

a season o changein leadership, strategic direction, the nancial health at a competitororganization, the advent o a new technology, the oer o a building, a sharp reduction in

land costs, etc. Be open to revisiting an old opportunity rejected previously but now worthconsidering. Consider the ollowing questions:

Have you been invited to partner with another organization? How was this evaluated in termso risk and potential reward?

What new activity might take a combination o aith and action to undertake? What are the open doors acing your organization? What are the interesting trends in your eld?


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THREATS

When analyzing organizational threats, consider the ollowing questions:

What nancial resource obstacles do you ace? Are any new regulations, increased costs, or declining returns aecting your revenue

generating ability and return on investment? Is there adverse public reaction to a revenuegenerating technique you are using? Is your size, visibility, success, or revenue track record likely to hurt you in the uture? Do you have bad debt or cashow problems? Could any o your weaknesses seriously threaten your organization?

Answer the questions in each o the our SWO areas with several brie one-sentence statements.

Once you have a list o statements, you can begin to prioritize the statements in each SWO area. Circle thetwo or three in each area that are most urgent and important, and then ask the ollowing:

Where can a revenue source capitalize on a strength?

What weaknesses must we minimize or eliminate to gain the best advantage or a new or enhancedrevenue source?

Which opportunities appear to support a strength or help eliminate a weakness?

Which o the threats could materialize in the next twelve months and undermine an income strategy?

Case Study

Consider the rst step o the revenue development process through the eyes o a nonprot named XYZOrganization.

We have been around or twenty years serving well, with good results to our clients and no bad

press. We have a strong, smaller donor support base which gives aithully every year. Our board is

knowledgeable, active, and gives or raises 20 percent o our annual budget. For the third year in a

row, the annual undraising benet has raised more money than the previous year. Our president isnt

araid to ask or money. We own our building and rent out excess space at market rates, giving us

modest positive cash ow. We just received a multi-year Federal grant.

On the downside, our organization has existed twenty years and is not known beyond our local

community. Consequently, we are not known to unders outside our region. We generate very small

amounts in oundation and corporation gits. Our annual donor records are inconsistent and oten

inaccurate. We have no major gits or planned gits programs. Our contributed revenue peaks in

December and May and dips very low in January/February and summer. Programs are caught in this

cycle and never seem to grow. We do not have a strong online presence and do not currently accept

donations online.

We think a couple o great opportunities are in ront o us. A Fortune 500 company has located a

manuacturing acility eight miles away. We have been invited to merge with the newer, larger ABC

Organization that is similar to ours (though the other organization has a signicant amount o debt).

Our newest board member serves on the community oundation board. Two years ago, we were

ofered a git o ten acres o land, zoned or light commercial usage, ve miles out o town. The new

Federal grant means we can use the publicity to tell small FBO/CBO organizations about our services.

We are aware o some ominous signs on the horizon. Our income rom direct mail is leveling of,

but our costs are increasing every year. The ABC Organization competes in the same service area

and started a larger, very visible, more protable annual undraising benet. The ve-block area


15/4515

around our building has seen a steady decline in real estate values over the past ve years. The ABC

Organizations president was eatured in several lengthy articles. He was quoted as an authority in our

mutual service area. As a result, and according to our new board member, the community oundation

has expressed interest in providing possible support to ABC Organization.

XYZ Organization has been awarded a our-year Federal grant or $2 million. Its cooperative agreement

stipulates a 25 percent match as cost share, or $500,000 over the term o the grant period. Te rst-yearamount o the cost share is $125,000. XYZ Organization knows it needs to nd, raise, or somehow makethat match to qualiy or the Federal dollars. XYZ Organization began Step 1 o the revenue developmentprocess and lled in the Goals and Financial Resources worksheet accordingly:

Section A: Sample Goals

FINANCIAL RESOURCE WHERE XYZ IS TODAYWHERE XYZ

NEEDS/WANTS TO BE

Annual revenue $3,010,000 $3,520,000

Special project revenue 0 $500,000

Number o donors 6,000 9,000Number o volunteers raising

revenue10 20

Fundraising expense $200,000 $350,000

Other

Section B: Revenue Sources

REVENUE SOURCE WHERE XYZ IS TODAYWHERE XYZ

NEEDS/WANTS TO BE

Annual or sustained gits $1,000,000 $1,200,000

Major gits $400,000 $800,000

Planned gits

Foundation grants $1,100,000 $1,300,000

Causerelated marketing

Corporate giving program $50,000 $100,000


Unrelated business income $250,000 $300,000

Inkind donations $10,000 $20,000

Supporting organizations $200,000 $250,000

Benet events


Churches/denominations

Federated unds $50,000

Online donations

Other


16/4516

Section C: SWOT Statements


STRENGTHS

Our president is unaraid to ask or money.

We have a solid track record.

We own our building and rent out excess space at market rates.

WEAKNESSES

Our organization has existed twenty years and is not known beyond our local

community.

Our annual cash ow peaks in December and May and dries up in January/February

and summer.

Our organization does not have a strong online presence and does not currentlyaccept donations online.

OPPORTUNITIES

We have been invited to merge with a newer, larger organization similar to ours,

though the other organization has a signicant amount o debt.

Our latest board member serves on the community oundation board.

We can leverage the Federal grant or PR and participation.

We have been oered ten acres o land, zoned or light commercial use, ve miles out

o town and below market rates.

THREATS

The ABC Organization began holding a larger, very visible, more protable annual

undraising benet.

The ABC Organizations president was eatured in several lengthy articles about our

mutual service area. As a result, the community oundation has expressed interest inproviding possible support to ABC.

Section D: Key Statements on Financial Resources

SWOT SUMMARY

CATEGORIES

KEY STATEMENTS IN EACH SWOT AREA

Builds on or enhances

1. Our presidents ability to ask or money

2. Our history, stability, low debt

3. The Federal grant

Reduces or eliminates

4. Our public visibility, especially to potential large unders

5. The cash ow cycle that traps our growth

6. No online presence

Explores or takes steps to

avoid

7. Use o the building (Can more be done with it to generate revenue?)

8. Our board member contacts with oundations

9. The git o land

Does not ignore ordismiss

10. ABCs rising reputation and media visibility11. ABCs apparent strength with more broadbased public support

Tis analysis may point to enhancing one or more existing revenue source or XYZ Organization. Tey mayalso need to start a new revenue source. Te organization may not be able to do more in the area o annualgiving; it may have an opportunity with major gits, with oundations, and with corporations.


17/4517

Step 2: Identiy Your Income Strategy

oo oten, organizations spend precious time and money because they ail to identiy a strategy or revenuedevelopment. Some pursue more revenue by starting up one or more income sources beore asking i this ishelpul or necessary. Others painully pursue reworking their existing revenue-generating ability instead oinvesting that same time and energy in building something new. And some organizations, wary o developing

an alliance or strategic relationship, never consider the possibility o mutual gain by lending, using, orborrowing another organizations nancial resources. In identiying an income strategy, you will consider theollowing questions:

Do I build on an existing revenue source?

Do I need to start something new?

Can I borrow or use a revenue source rom someone else?

Te second step in the revenue development process lets you select a strategy to generate revenue. Unless youhave the assets o a parent organization, most capacity builders use one o our income strategies: enhancingan existing revenue source, starting a new revenue source, orming an alliance or partnership to share anorganizations revenue sources, or orming an alliance or partnership to acquire in-kind resources.

1. Enhancing an existing revenue source

Enhancingan existing revenue source involves applying resources o money, counsel, and time toimprove upon one or more revenue sources that already exist within your revenue-generating portolio.I you have direct mail, you might add a new program to urther sort your le o donor names to get ahigher yield rom certain portions o the le. I you regularly solicit oundation grants, you might addsta or a consultant to bolster research, inquiries, or ollow-up on turndowns.

2. Starting a new revenue source

Starting a new revenue source involves applying people, money, and expertise to initiating and sustaining

a new source o income. An organization might start a major gits or planned giving program, createan institutionally related oundation, start an endowment, or create a sister corporation to launcha business. All o these would be in addition to existing revenue eorts and would thereore requireadditional resources to implement.

3. Forming an alliance or partnership to share an organizations revenue sources

By entering into an alliance or partnership, your organization can use another organizations monetarysourcein a way that is benecial to both entities.

4. Form an alliance or partnership with an organization to acquire in-kind resources

By entering into an alliance or partnership, your organization can use another organizations in-kindservicesby developing an agreement where the value o time and services, materials, space, or other in-kind contributions meet a cost share.

When identiying an income strategy, youll need to consider a number o criteria, including any investmentsrequired, risks, organizational culture, sta resources, and timelines. Consider the ollowing table, whichhighlights twelve dierent criteria and how they apply to the our dierent income strategies detailed above.


18/4518

Comparison o Income Strategy Features

INCOME STRATEGYCRITERIA

ENHANCE STARTALLIANCE FOR

CASHALLIANCE FOR

IN-KIND

Rapid revenue inowSmaller results in the

short term

Larger results in the

short term

Larger results in

longer termNo cash inow

Low initial outlay o cash or

staf to get going

Moderate expense,

with unds oundby cutting other

programs

Most expensive;

have to nd

outside unds, andundraising costs

rise sharply

None None

Low inhouse resistance to

changeYes No

Low, as bothentities must have

a synergistic gain

to have reached anagreement

Low, as bothentities must have

a synergistic gain

to have reached anagreement

Risk o ailure Lower Higher

Low, though

surprises are otendiscovered ater the

agreement is signed

Low, though

surprises are otendiscovered ater the

agreement is signed

Time elapsed till startup Rapid SlowDependent upon

agreement

Dependent upon

agreement

Generates many new

names

Yes, rom sameprograms

Yes No No

Builds on inhouse

systems, registrations,

reports

Yes, but this may

limit the extent onthe improvement

No, and oten

creates new

registration, system,and operations

issues

No

No, and they may

not understand the

need or reportingand compliance

requirements

Builds on inhouse

expertise in revenue

generation

Yes No No No

Creates urgency or

momentum

Harder to create

urgencyYes Yes Yes

Ease o tracking results

Harder, asenhancements

undermine existingprogram results

Yes, though theorganization has a

slow learning curve

to baseline ROI andother results

Yes

Yes, though

reporting is difcult,

as is substantiation

Needs a consultant to get

started?Yes No Yes Yes

Ease o termination oprogram or agreement Harder Easiest

Moderate, though

dissolution can haveissues

Moderate, though

dissolution can haveissues


19/4519

Ater weighing the dierent strategies and criteria, your organization can prepare to identiy an incomestrategy. You should begin by prioritizing the criteria in the table; or example, i your organization is acingsignicant cash needs in the short term, you might pursue enhancing existing revenue sources (becausethe start-up time is minimal) and starting new sources o revenue (because the inow o revenue is greaterinitially).

Step 3: Select an Appropriate Revenue Source

Once you reach step three, you have done your homework and used a SWO analysis to ocus your goals andprioritized your income strategy to provide direction to your revenue development process. Te next step inthe revenue development process is to select a revenue source.

Keep in mind that i you anticipate adding or enhancing a revenue source with which you may have littleexperience, you may need to hire a paid proessional consultant with the requisite knowledge or expertise.

Consider the teen revenue sources introduced on page ve in more detail by reviewing the eatures belowand suggestions or enhancement:

Annual or sustained gits

Provides unds or operations

Relies on excellent project tracking, writing, creative design, and purchasing

Names are acquired and converted to regular donors using segmentation, specialized programs, anddirect-response packages

Current active names have at least one transaction in the past twenty months

Lapsed donors are reactivated rather than purged rom the le

Donor lie expectancy can be ve or more years on the donor le

Direct-response tools are least expensive Volunteers can become donors and vice versa

Requires less than six months o lead time

o enhance an existing annual or sustained git program, consider segmenting donors by giving level andcreating a club or anity program, developing more personalized solicitation techniques, or using high-endtechnology like videos or webcasts.

Major gits

Provides unds or operations, projects, programs, start-up, endowment, and capital

Relies on senior leaderships ability to communicate vision, ask, and close Prospects are screened, rated, researched, and proled

A multi-step cultivation and solicitation process secures git commitments and can take ten to sixteenmonths to complete

Te rst major git need not be the last



20/45


21/4521

Negotiation oten involves trade-os between what the corporation wants and what the nonprot iswilling to give

Tere are benets and risks to being associated very closely with a or-prot company or a specicproduct; its important to weigh those careully

May require impressions analysis and valuation

Organizations can retain control o your names

May generate unrelated business income tax (UBI)

Requires one to two years o lead time

o improve cause-related marketing, develop or purchase an analysis tool that can help you quantiy thedollar value o the sponsorship opportunity by calculating consumer impressions o the corporation. Valuablecause-related marketing studies analyze the number o visual impressions available to the sponsor and assign adollar value per each impression.

Corporate giving programs

Provides unds or operations, projects, programs, endowment, capital, in-kind, and loaned services

Relies on an excellent relationship between senior leaders and corporate leaders

Requests are usually written and directed to a committee or action

Large sums o money are usually onetime

More likely to contribute i they are headquartered nearby, have a locally based workorce, or have apublic consumer base


o enhance an existing corporate giving program, work to develop meaningul relationships with key

employees. Involve them with the key leadership o your organization. Explore your inclusion in theirmatching gits program or employee contributions.


Provides unds or operations, projects, programs, endowment, and capital

Relies on good business sense

Te business must work as a prot-making enterprise beore its worth developing

May require a separate governance structure; separation o accounts, unctions, and nancial lings

Requires six months to one year o lead time

o improve earned income activities, consider inviting members o your board to host a business lunch tobrainstorm other business opportunities or your organization.

Unrelated business income

Provides unds or operations, projects, programs, and capital

Relies on good business sense


22/4522

Must know the extent o taxable exposure as dened by IRS regulations governing unrelated businessincome


o improve unrelated business income, seek ways to relate the income source to your tax-exempt purpose.

In-kind donations

Provides unds or operations, projects, programs, and Federal cost share

Sometimes begins as a corporate solicitation or cash and then negotiates to an in-kind donation

Relies on good record keeping and processing


Generates very good return on investment

o enhance in-kind revenue, consider meeting with potential donors to discuss how the donation could helpthe or-prot organization meet their needs, whether they include advertising the organizations goods or

services or helping the organization clear out surplus materials.

Supporting organizations

Provides unds or operations, projects, programs, and people

Relies on excellent communication between senior leaders o both organizations

Volunteer-intensive activities generate PR, services, and revenue

May operate an earned income enterprise

Requires clearly prescribed limits o authority


o enhance revenue obtained through supporting organizations, consider cultivating volunteer resources intoother revenue sources.

Beneft events

Provides unds or operations, campaigns, and programs

Relies on excellent volunteer leadership to establish and maintain momentum through planning and pre-event phases

For revenue-generating purposes, the size o the event is not as important as the development strategy inplace prior to the event

Requires a great concept, location, and a date that doesnt conict with other local benet events


o enhance revenue obtained through benet events, develop a dynamic event that includes unding tiersor tables, honorees, etc. Also, remember to underwrite all event costs.


23/4523


Provides unds or operations, projects, programs, in-kind, and capital

Relies on solid relationships between CEO/board and elected legislative leadership

Requires a ront door/back door approach to be successul (Te ront door requires ulllment o all

application requirements; the back door iners relationships built over time with appropriate state andlocal ocials, their stas, and committees.)

Requires research and careul matching o the opportunity to the limitations o the grant/undingopportunity

Must be within the unding appropriations guidelines

Unused unds may need to be returned

Must work with the legally cognizant agencys sta

Must understand their outcome and evaluation requirements


o enhance revenue obtained through state and local municipalities, work to develop stronger ties withelected ocials and key members o their sta.

Church and denominations

Provides unds or operations, projects, programs, and people

Relies on excellent communications between senior organization leaders and pastor/church leadership

Provides a good source o in-kind donations (Smaller donations are usual, though larger churches mayhave more discretionary unds or a onetime need.)

Pastor approval may be key to acceptance o a unding request

Local mission ocus may take a year to nally receive a git

Must match service limitation and ocus, local service area, and theological worldview


o enhance revenue obtained through church and denominations, involve pastoral leadership in the creationand marketing o church-related development programs.

Federated unds


Relies on solid relationships between sta and oundation leadership

Some campaigns allow your supporters to designate your organization as a charity even i you are not alisted charity with that ederation or campaign

Start-up organizations are generally not permitted to participate

Must t priority ocus

Qualication process takes time

ime-consuming or sta, with periodic detailed reviews

Must remain within the community unds guidelines


24/4524

Must work with community und sta

Must be an established organization


o enhance revenue obtained through ederated unds, devote marketing dollars to raising visibility o your

organization to supporting constituents. Consider using direct mail or mailing lists to inorm donors o theseason.

Online donations


Relies on a solid web presence that must be maintained on an ongoing basis

Empowers your supporters to activate their networks in support o your cause

Generally little start-up costs, though most donation sites will take a percentage o donations to coveroperating ees

Can be launched quicklyo enhance revenue obtained through online donations, be sure to devote sta time to regularly updatingyour website or other online community spaces. It is best to have maintenance done by the sta who are mostin touch with the day-to-day work o your organization.

Case Study

In our example, XYZ Organization reviews the teen dierent types o revenue sources and makes a list othe revenue sources they could enhance and those that they would have to start rom scratch:

Existing revenue sources to enhance:

Annual gits Foundation grants Benet events Earned income activities Unrelated business income In-kind donations

New revenue sources to consider:

Major gits Planned gits Cause-related marketing Corporate giving programs Churches and denominations Supporting organizations State and local municipalities Federated unds Online donations

XYZ Organization prioritizes that it will work to enhanceoundation grantsand in-kind donationsor the

ollowing reasons:

It needs unds or operations, projects, programs, and Federal cost share

Foundations are a good way to express in writing the accomplishments and history o XYZ

Both require less than six months o lead time

Foundation process benets rom board member contact

Foundation process takes advantage o strong CEO skills in relationship building

XYZ is prepared to develop the ront door/back door relationships that are vital to success


25/4525

XYZ organization also decides to start major gits and corporate giving programs as a source o new revenue

or the ollowing reasons:

Tey want unds or operations, projects, programs, endowment, capital, in-kind, and loaned services

Te organization has good synergy with in-kind giving, as corporate solicitations or cash can benegotiated into in-kind donations

Company prospects are headquartered nearby

Both require less than six months o lead time

Both rely on senior leaderships ability to communicate vision, ask, and close

Step 4: Develop and Execute a Revenue Source Plan

Once you have reached the ourth step o the revenue development process, you have conducted a numbero exercises and activities encouraging you to brainstorm and evaluate your current capacity, as well as yourgoals or the uture. In step our, you will ormally capture your plans or implementation in an executablerevenue source plan. A revenue source plan includes ve parts: plan objectives, selection o revenue source,

summary o costs, adjustments to systems, and schedule. Tese can be described in a Revenue Source PlanSummary. See Appendix F or a summary template.

Plan Objectives

Your statement o objectives should be a simple statement o what you want to accomplish by when. It willdetail not only the dollars you expect to raise but any additional goal you identied in Step 1 o the revenuedevelopment process. Plan objectives are best stated with a measurable output by a specic date. Exampleobjectives could include:

Acquire 1,000 new names by January

Reactivate 1,000 lapsed supporters by yearend

Raise $50,000 at a 4:1 return on investment not to exceed a $12,000 level o investment this all

Selection o Revenue Source

List the selections you have or either enhancing or starting a revenue source. Select one and describe theanswers to the questions what, how, who, and when. Tis kind o inormation will be useul to you in the

uture, as it provides a historical record o your income strategy.

Summary o Costs

Provide a brie detail o any start-up and/or continuation costs. Be sure to describe the hard costs, where

unds are directly spent on the revenue source, as well as any sot or hidden costs.

Adjustments to Systems

Managing a new or enhanced revenue source can put stress on some o your organizations internal systems.Several revenue sources can create additional unanticipated costs, generate overhead, and add stress to yourorganizations sta. Aected areas include accounting, gits handling or processing, data management, andrecord keeping or central les. Adding or enhancing revenue sources brings additional policy and procedurerequirements, valuation and substantiation capacity, and registration and reporting to Federal and stateagencies. Tere are additional costs apart rom direct costs driven by demands on your systems and additional


26/4526

reporting expenses. Tese hidden costs show up as additions to your general and administrative expenses.Tese hidden costs can include things like printing, overtime, contract labor, ulllment, etc.

Reerence Appendix G or a detailed table that lists the teen revenue sources and how these sources couldpotentially impact accounting, gits processing, data management, record keeping, registration and reporting,

and policies and procedures.

Schedule

Te schedule portion o a revenue source plan captures critical activities and key dates in launching therevenue source. Tis portion o the plan also explains what steps will be taken and in what order, and itprovides other departments or unctions in your organization an opportunity to prepare or results.

Case Study

Consider XYZ Organizations Revenue Source Plan summary, detailed below:

Objectives:

OBJECTIVE DESCRIPTION MEASURABLE OUTPUT BY WHOM BY WHEN

Launch a volunteerled major gits

program this allKicko o program and training Director March

Identiy and qualiy prospects200 prospect backgroundscompleted

Sta January

Recruit board members and hold a

training

Three board volunteers recruited

and trainedCEO February

Systems:

DEPARTMENT IMPACT WHEN

Accounting Set up major git und accounts, source codes, and use codes January

Data management Set up major git prospect selection criteria January

Legal Research state registration requirements December

Schedule: Costs:

Sta launch OctoberEXPENSE

DESCRIPTION

EXPENSE

AMOUNT

WHEN EXPENSE

WILL OCCUR

Prospect screeningscompleted

November Prospectscreening

$ 5,000 December

Backgrounds completed JanuaryMajor donor

events$ 7,000 April

Volunteer recruitment February Travel $ 3,000 April and May

Training and kicko MarchMajor gits casematerials

$ 7,000 March

Local events April Total: $ 22,000


27/4527

Step 5: Evaluate Results and Strive or Improvement

Results matter. A revenue source plan can look great on paper, but i it ails to perorm, it is a waste otime and money. Organizations should make a concerted eort to regularly evaluate revenue developmenteorts and develop courses o action to address eorts that appear to be underperorming or not meetingexpectations.

Remember that as you implement any new income strategy, it is vital to include key stakeholders romyour organization, including your board, key donors, key partners or alliances, and a handul o clients orconstituents. Teir support and eedback to strategy, timing, and costs will prove helpul in implementingyour plan.

Consider the table below, which highlights the teen revenue sources, indicators o underperormance, andsuggested corrective actions to improve the yield o the unding source.

REVENUE SOURCE UNDERPERFORMANCE SYMPTOMS DIAGNOSIS AND CORRECTIVE ACTION

ANNUAL OR SUSTAINEDGIFTS

Low average git

Low response rate

High number o bad addresses or

contact inormation

Eliminate the possible problem by trialand error. Ask: Is it the list o names, the

oer, the signor, the package copy/design,

or a poor choice or direct response? Yourorganization may decide to employ a

consultant to quickly diagnose and solvethese issues.

MAJOR GIFTS No meeting appointments arehappening

Asks are taking place or low

amounts o money

Volunteers are reverting to annual

asking techniques

Reevaluate prospect qualications and anysta training on acquiring appointments,

asking, and closing. Remember that

qualiying prospects requires time as well asskill training.

PLANNED GIFTS No plans are written

Requests or inormation are not

turning into leads or meetings

Work to motivate more timid sta and to

improve the leadgeneration system. When

asking or planned gits it is essential orsta to get out o the ofce and into the

eld.

FOUNDATION GRANTS Lots o letters and some proposals

are going out, but no money iscoming in

Work to improve your understanding o

grantsmanship by attending a grantwritingseminar or class. Also, consider recruiting

board members to develop personal

relationships with oundation directors.

CAUSE-RELATED

MARKETING

No money comes in rom the

causerelated marketing

Reevaluate your organizations contract

with the orprot organization andrenegotiate contract terms. First nd the

companys limit (point where they say no)and work backwards rom there.


28/4528

REVENUE SOURCE UNDERPERFORMANCE SYMPTOMS DIAGNOSIS AND CORRECTIVE ACTION

CORPORATE GIVING

PROGRAMS

Lots o letters and some proposalsare going out, but no money is

coming in

Encourage your organizations leadership(board, CEO, etc.) to reach out to corporate

leadership and cultivate these highlevel

relationships. Strive to make the corporate

giving program benecial or both parties.

EARNED INCOME

ACTIVITIES

No products sold

No leads

Develop incentives to motivate sales.Reevaluate the concept o earned income

to see i it ts within your organizationsmodel and whether the idea was well

executed.

UNRELATED BUSINESS

INCOME

No products sold

No leads

Develop incentives to motivate sales.

Reevaluate the concept o unrelatedbusiness income to see i it ts within your

organizations model and whether the idea

was wellexecuted.

IN-KIND DONATIONS Only a ew small gits come in Passive sta and poor lead generation

system. Must get the sta into the eld andout o the ofce.

SUPPORTING

ORGANIZATIONS

Many meetings occur but no rmcommitment to raise unds

Evaluate whether your organizations seniorleadership is supportive o the partnership.

Work with leadership rom bothorganizations to ensure the arrangement is

benecial or both parties.

BENEFIT EVENTS Poor attendance

Wrong people attending

No money raised

Identiy event weaknesses by analyzing

event design, scheduling, location, andleadership. Brainstorm ways to get both

event and community leaders engaged in

the promotional process. Reevaluate how tomake undraising the oundational theme

o the event.

STATE AND LOCAL

MUNICIPALITIES

Many meetings but no rm

commitment or unds

Work to improve relationships with key

legislators and to prove the political valueo your organizations work.

CHURCHES AND

DENOMINATIONS

A ew meetings, with lapses oinactivity/silence

No rm commitment or unds

Work to improve and generate supportrom church leadership.

FEDERATED FUNDS Low average git

Low response rate

High number o bad addresses and

contact inormation

Work to motivate more timid sta andimprove organizational marketing skills.

Motivate sta to work with campaign/ederation sta.

ONLINE DONATIONS Low average gits

Low number o gits

Few hits or participants in onlinespaces

Update online spaces more requently.

Identiy key supporters and sta membersto actively highlight the organization on

their own pages.


29/4529

SUMMARY

Te revenue development process will guide your organization rom broad analysis to consideration opractical alternatives, and towards results through a specic, measurable action plan.

Te ve steps o the revenue development process are summarized below:

Step 1 challenges you to set goals and conduct a thorough assessment o current capacity and desiredcapacity.

Step 2 helps you identiy income strategies that work within your organizational culture and climate.

Step 3 guides you through the process o selecting appropriate revenue sources.

Step 4 documents the necessary elements o a revenue resource plan.

Step 5 encourages you to evaluate your organizations results and strive or continued improvement.


30/45Appendix A | 30

APPENDICES

APPENDIX A

Resources

AlumniFidelity

Originally created to help schools increase alumni donations, AlumniFidelity has now helped hundreds oundraising campaigns raise a combined total o more than $1 million through its customized webpages andonline donation system.

Causes on Facebook

By creating a cause on Facebook, nonprot organizations and philanthropists can spread the word about theirmission and cause through the extensive viral network o Facebook. Te site also empowers causes to acceptonline donations and recruit volunteers.

Cause Marketing Forum

Te Cause Marketing Forum, ounded in 2002, was created to help promote collaboration between nonprotsand corporations. Te Forum provides insight through a resource center, workshops and tele-classes,conerences, and research. Te site also provides links to articles on cause marketing best practices.

Council on Foundations

Te Council on Foundations is a membership organization that works to support philanthropic causes,organizations, and the general population. Te Council oers support to nonprot organizations through theprovision o expert analysis on legal issues, and virtual and in-person events on undraising, grantmaking,etc. Te Council also oers insight and resources on private independent oundations, community oundation

services, and corporate oundations.

Election Year Risks

Tis article rom the Nonprot Risk Management Center oers guidance on how nonprot organizationscan weather the campaign season and reminds nonprots o their rights, as well as regulations that limit theirability to directly campaign or or against individuals.

FirstGiving

FirstGiving oers simple tools that your supporters can use to set up online undraising pages. Te site eaturesresources, requently asked questions, reports on donation activity, and charts tracking unds raised. Te site,which is connected to GuideStar to enable supporters to donate to your cause, walks users and nonprots step-

by-step through the process o setting up a undraising page.

Foundation Center

Created in 1965, the Foundation Center connects nonprots and grantmakers, policymakers, and the generalpublic by maintaining a number o print and web-based resources that provide insight into unding and givingtrends. Te Foundation Center also oers a number oin-person and web-based events rom its locationsthroughout the nation.
http://www.alumnifidelity.com/http://www.facebook.com/causeshttp://www.causemarketingforum.com/http://www.causemarketingforum.com/bestpractices.asphttp://www.cof.org/http://www.nonprofitrisk.org/library/articles/advocacy091007.shtmlhttp://www.nonprofitrisk.org/http://www.firstgiving.org/http://www.foundationcenter.org/gainknowledgehttp://www.foundationcenter.org/events/http://www.foundationcenter.org/events/http://www.foundationcenter.org/gainknowledgehttp://www.firstgiving.org/http://www.nonprofitrisk.org/http://www.nonprofitrisk.org/library/articles/advocacy091007.shtmlhttp://www.cof.org/http://www.causemarketingforum.com/bestpractices.asphttp://www.causemarketingforum.com/http://www.facebook.com/causeshttp://www.alumnifidelity.com/



Grants.gov

Grants.gov is considered the premier site or news on Federal unding and electronic ling. Te site alsomaintains a number o resources or organizations that want to register and use the online system, includingguides on how to register, submit, and track applications; animated tutorials on determining eligibility,registering, and completing online applications; checklists to help you through the online registration process;

and detailed logs o requently asked questions and troubleshooting tips.

GuideStar

GuideStar is an organization that promotes transparency and charitable giving by maintaining a database ononprots that draws inormation directly rom the Internal Revenue Service.

How odays Rich Give: What You Need to Know to Raise a Lot More Money rom Wealthy Donors

Tis recording o a seminar conducted by Harvey McKinnon provides insight on how nonprots can improvetheir development programs to speak the language o a wealthy donor. McKinnon, the best-selling authoroTe Power o Giving: How Giving Back Enriches Us All, is considered one o the leading direct mail experts.

In-Kind Donations: A Guide to Unlocking Hidden Resources or Your OrganizationTis report rom Ormita, a company that helps businesses transorm lost prot into new income, providesbackground on what in-kind donations are, who accepts them, and how both or-prot and nonprotorganizations can benet rom in-kind donations.

In-Kind Donations: Hidden Assets or Your Organization

Tis resource guide rom the Missouri Department o Health and Senior Services provides nonprots with anoverview o in-kind donations and includes tips on who and how to ask or donations.

Johnson Center or Philanthropy at Grand Valley State University

Te Johnson Center or Philanthropy is an academic center that aims to empower nonprots and

communities to transorm their communities through the use o research, proessional developmentopportunities, and technologies. Te Johnson Centers Nonprot Good Practice Guide includes a library oresources or nonprot organizations, oundation proessionals, students, and volunteers. Te GrantmakingSchool o the Johnson Center or Philanthropyoers a number o courses and educational opportunities orboth grantseeking and grantmaking individuals o all levels o experience.

National Center or Charitable Statistics

Te National Center or Charitable Statistics, established in 1982, aims to develop and distribute inormationon nonprot organizations and their activities to support research into how the nonprot, corporate, andgovernment sectors interact.

Network or Good

Network or Good oers a simple tool to help nonprots create a undraising campaign in under ten minutes.Te tool includes a Donate Now button, which gives users one place to click to make a donation, and anE-mail Now button, which enables easy outreach or contacting supporters. Te site also eatures a sectioncalled Fundraising123, which includes trainings and webinars to help you learn how to eectively raisemoney.
http://www.grants.gov/http://www2.guidestar.org/http://www.harveymckinnon.com/CD.htmlhttp://www.ormita.com/downloads/PDFs/In-Kind-Donations.pdfhttp://www.dhhs.mo.gov/AdolescentHealth/InKindDonations.pdfhttp://www.gvsu.edu/jcphttp://www.npgoodpractice.org/http://www.gvsu.edu/jcp/the-grantmaking-school-113.htmhttp://www.gvsu.edu/jcp/the-grantmaking-school-113.htmhttp://www.nccs.urban.org/http://www1.networkforgood.org/http://www1.networkforgood.org/http://www.nccs.urban.org/http://www.gvsu.edu/jcp/the-grantmaking-school-113.htmhttp://www.gvsu.edu/jcp/the-grantmaking-school-113.htmhttp://www.npgoodpractice.org/http://www.gvsu.edu/jcphttp://www.dhhs.mo.gov/AdolescentHealth/InKindDonations.pdfhttp://www.ormita.com/downloads/PDFs/In-Kind-Donations.pdfhttp://www.harveymckinnon.com/CD.htmlhttp://www2.guidestar.org/http://www.grants.gov/



Nonprofts Assistance Fund

Te Nonprots Assistance Fund has, since 1980, worked to build nancially healthy nonprots. Te Fund isa 501(c)(3) Community Development Assistance Fund that maintains a number o tools and resources thatcan assist nonprots throughout the nation in working towards their nancial goals.

Nonproft FAQIdealist.org is an interactive, cause-driven website where mission-driven people and organizations can ndresources, opportunities, and supporters. Trough the sites Nonprot FAQ page, users can reerenceanswers to requently asked questions about nonprot organizations, management, regulation, resources, anddevelopment.

Philanthropy Journal

Te Philanthropy Journal aims to help nonprot and philanthropic organizations solve social problems.Trough a website and regular e-mail bulletins, the Philanthropy Journal alerts its member list o news,resources, and announcements that impact the nonprot community.
http://www.nonprofitassistancefund.org/http://www.idealist.org/if/i/en/faq/1066-209/1-7http://www.idealist.org/http://www.philanthropyjournal.org/http://www.philanthropyjournal.org/http://www.idealist.org/http://www.idealist.org/if/i/en/faq/1066-209/1-7http://www.nonprofitassistancefund.org/


33/45Appendix B | 33

APPENDIX B

Glossary

Asset:An item o value, such as real estate, cash, a security, or a patent; all items o value (such as real estate,cash, inventories, securities, or patents), owned by a person or a business, that constitute the resources o that

person or business; an organizations holdings, including current assets and xed assets.

Case: Te reasons why an organization both needs and merits philanthropic support, usually presented byoutlining the organizations programs, current needs, and plans.

Challenge git: A git donated by a person made on the condition that other gits or grants will be obtainedon some prescribed ormula, usually within a specied period o time, with the objective o encouragingothers to give. Achallenge grantis a challenge git donated by an organization, corporation, or oundation.

Corporate sponsorship: Financial support o a project by a corporation in exchange or public recognitionand other benets. Also corporate underwriting.

Cost policy statement: A document that identies a nonprot organizations policy on the costs that it

considers direct and the costs it considers indirect, and the rationale to support those costs.

Cost allocation plan: A document that identies, accumulates, and distributes allowable direct and indirectcosts to cost objectives. Te plan also identies the allocation methods used or distribution to cost objectiveson the basis o relative benets received. Te cost objectives include specic grants, cooperative agreements,contracts, programs, projects, titles/cost categories within a grant, a product or service provided to costcenters, or other activities o a nonprot organization, e.g., undraising, services to members.

Deerred git:A git (such as a bequest, lie insurance policy, charitable remainder trust, git annuity, orpooled-income und) that is committed to a charitable organization but is not available or use until someuture time, usually the death o the donor.

Designated git: A git, the use o which is restricted by the donor. Tis git is either a temporarily restrictedgit or a permanently restricted git.

Direct costs: Tose costs that can be specically identied with a particular cost objective. For example,salaries, ringe benets, and travel o a project director who is working 100 percent o the time on a grant/contract are direct costs. Some nonprot organizations also classiy as direct costs common or joint costs thatcan be readily assignable to cost objectives, e.g., occupancy costs are allocated to a grant/contract as directcosts based on square eet o space occupied.

Earned income: Money received by a person or organization or product sales or service rendered.

Endowment:A permanently restricted net asset, the principal o which is protected and the income romwhich may be spent and is controlled by either the donors restrictions or the organizations governing board.

Git receipt: An ocial acknowledgment issued to a donor by a recipient organization. I the donation is(currently) more than $250, the IRS requires inormation naming the charity, the asset donated, and anybenets received by the donor in exchange or the git.

Indirect cost proposal: Te documentation prepared by an organization to substantiate its claim or thereimbursement o indirect costs. Tis proposal provides the basis or the review and negotiation leading tothe establishment o an organizations indirect cost rate, i.e., ratio between total indirect expenses and somenancial base.


34/45Appendix B | 34

Indirect costs: Tose costs which are not readily identiable with a particular cost objective but neverthelessare necessary to the general operation o a nonprot organization and the conduct o the activities itperorms. Te cost o executive salaries, payroll, accounting, personnel, depreciation, general telephoneexpenses, general travel, and supplies are examples o expenses usually considered indirect costs.

Indirect cost rate:A percentage established by a Federal department or agency or a grantee organization,

which the grantee uses in computing the dollar amount it charges to the grant to reimburse itsel or indirectcosts incurred in doing the work o the grant project.

Institutional in-kind contributions: Te value o non-cash contributions made by an organizationto a project. Institutional in-kind contributions can include volunteer services essential to the project;personnel services valued at a regular rate o pay plus appropriate ringe benets; indirect costs; and supplies,equipment, property, buildings, and land already purchased and available or use to the project.

In-kind:In-kind goods or services, not in money, such as a contribution o equipment, supplies, space,or sta time. Te donor may place monetary value on such a contribution or tax purposes. Also seeinstitutional in-kind contributions and third party in-kind contributions.

Lie-income git: A git arrangement by which a donor makes an irrevocable transer o property to a charitywhile retaining an income interest to benet the donor and any other beneciary or lie or a specied periodo years, ater which the remainder is distributed to t

Building Multiple Revenue Sources

Documents

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