Tie New Revenue Ventures to Your Mission
By Rick Wilkins
There are no limits in absolute scope or the number of opportunities available, except that each venture must tie closely to your core mission. Any nonprofit has the ability to innovate around its mission, generating profitable revenue streams while enhancing its ability to achieve its higher mission and objectives.
Consider the following ways to build on what you already do:
Fee for Services
Next Steps for NonprofitsDecide What to Do Typically, deciding on a social venture that is close to the core mission can be relatively easy, because you are already providing a product services under a grant that, if structured differently, or focused on a related but different market, can be sold and delivered for a profit. If a service or product is not available, you might provide a membership in return for valuable products and/or information important to the constituents served.
Build Your Business Case That generally means doing market research to understand where the product or service will fit with other competitors, what product features and benefits are needed, and what price points to hit. Also needed are marketing plans, production plans, a sales force or method to get it to market, product or service specifications, alliances needed, and understanding who is going to buy first, and how repeat sales are going to be realized. Once those components have been sorted out, write a business plan. It should include financial forecasts that show when break even is achieved and how much capital is required.
Determine Financing Needs Capital to start a social venture may be developed with grant money from foundations, corporate alliances and support, and/or special venture funds established to serve those entrepreneurial nonprofits with ideas that can ramp to national and/or international markets. If you can rely on some surplus money generated from on-going operations, that will help demonstrate prior success and add credibility to the plan.
Remember: Finding sources is usually not difficult. Closing the deal is. Understanding the motivation is critical for each source you approach.
Prepare Documents Important components of closing sources of capital include fair terms, legal agreements, contingency plans, an exit strategy for the investor, a well grounded plan to protect intellectual property if it is involved, and strong board support. Attorneys and counsel are required.
Launch With the deal closed and agreements signed, the team must now execute the plan. Keep a calendar of achievements and tasks to be completed on a weekly basis. That will organize and prioritize actions for the whole management team, enabling it to deal with the unexpected crises that inevitably crop up while staying on schedule.
Rick Wilkins is principal/partner at Strategic Giving LLC, which focuses on social ventures as a means of bringing financial self-sufficiency to nonprofits. Contact him at R.Wilkins@strategicgivingllc.com.