November 01, 2014
Nonprofits can help others better when they help themselves
By Leon Seemann | 07/17/2013

If the great recession taught us nothing else, it’s that nonprofits now know we cannot always depend on the kindness of strangers. We’re blessed that Americans are very generous, but nonprofits need to start figuring out ways to support ourselves.

Let’s talk about nonprofit entrepreneurship. This is the process by which a nonprofit has a complementary profit-making program whose primary purpose is to earn money to support the core mission. It is not a new concept. Churches have had bake sales from time immemorial. What’s new is the sophistication of the programs nonprofits are coming up with. From one or two dedicated staff members all the way to setting up limited liability corporations, there is a real run to replace dwindling foundation and government support with earned revenue.

Here’s where you ask for a list of great, ready-made ideas for new funding. Unfortunately, these programs are as varied as the types of nonprofits there are in the U.S. What works for one organization is not likely to work for another.

What I can share with you is the process by which to select the right idea. Chances are that someone on your staff or board already has the pieces in place.

1. Obtain buy-in from the staff and board. This seems like an easy task, but many people in nonprofits do what they do for love and would happily do it for free. Convincing them to sell it can be a sales job in itself.

2. Identify your assets. An asset can be anything another person values: knowledge, space, products. Get creative. The most common mistake is thinking that just because we wouldn’t buy something ourselves means someone else wouldn’t either.

3. Review the mission. Any idea you come up with must support the core mission. 4. Brainstorm the possibilities. Some people prefer to do this on their own, some in groups. It doesn’t matter how, but make a big list. You’ll be surprised how many ideas your team can come up with if you make them feel comfortable offering ideas. The best will pull several ideas off the board into one.

5. Evaluate the return on investment. Selling shirts is nice, but when you only make $2.50 per shirt, you have to sell a lot of shirts to make it worth your while. The key is either high margin or high volume. Think big!

6. Review the mission. Did I mention that anything you do has to support the core mission?

7. Dive in. Almost any worthwhile idea will take 18 to 24 months to be profitable. So choose wisely and don’t give up too soon.

I can’t overstate the risk of being tempted to chase the money. The biggest difference between nonprofits and corporate America is that we are mission driven. Don’t change who you are because of what is trending. While a nonprofit cash enterprise doesn’t have to strictly adhere to the mission (psst, ask your tax lawyer about UBIT), it must make sense within the context of your mission.

So get your team together, dream big and take control of your destiny.

Seemann has more than 15 years of helping nonprofits grow. Contact him at www.linkedin.com/in/leonseemann or leon@shraterseemann.com.


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