Funding a not-for-profit is a big endeavor. Most organizations are familiar with the usual funding sources consisting of grants, donors, membership fees, crowdfunding sites, foundations, sponsorships and planned giving programs. What happens when you’re doing everything you can but you still need to generate additional revenue? This is when it’s time to look at some new and different funding sources that cut expenses and/or generate revenue.
Here are some ways that organizations can tap into nontraditional methods to improve your non-profit balance sheet. One or more may apply to your organization.
Fundraising or Appreciation Events
People enjoy uniting for a common cause. From 5K walk/runs to galas, there are a number of events that you can add or create to raise additional revenue. Fundraising or appreciation events offer not-for-profit organizations an opportunity to engage the community and raise money through ticket sales, in-person donations and sponsorships. Learn about your current donors: what do they do in their spare time; what are their hobbies and passions?
If you plan events that your target audience enjoys, then they will invite others — increasing your exposure and engagement. Make it an annual event to take advantage of the recurring revenue.
Lease Unused Office Space
If you have unused space you do not need, consider leasing it out. Whether it’s a section of your office or a larger, separate space, you can generate recurring revenue to offset overhead costs.
If you own your building, leasing is less complicated. However, if you are leasing space, you will need to check your lease agreement to learn what is allowed for subleasing options.
Donor Advised Funds (DAFs)
The use of donor-advised funds remains a relatively small part of an overall giving strategy, however, their popularity has grown in recent years. Community nonprofits and foundations sponsor over one-third of all charitable dollars held in donor advised funds across the country. There are a lot of regulations surrounding these funds so consulting with an advisor is strongly recommended.
Shared Personnel Expenses
If you only need a part-time administrative assistant or marketing coordinator, consider sharing this role with another not-for-profit organization that doesn’t compete with your donor base or funding sources. Pooling your resources could help you attract better talent because you can provide competitive pay and benefits.
The key is to ensure that you have an agreement that spells out the terms, expectations, hours and roles to avoid any misunderstandings while also complying with Department of Labor wage and hour laws.
There are other ways to develop for-profit or non-profit partnerships to generate additional revenue.
Proper implementation is key and LvHJ’s team is happy to help. We can advise on not-for-profit accounting standards and nontraditional funding and revenue sources for your organization.