3 Ways to Create Real Financial Sustainability

Sometimes, we use the term "sustainability" as if it were a magic word. We find it irresistible when we have discussions centered around it. Have a successful meeting around climate change or the broader idea of sustainability, and it’ll get people excited and talking. However, for many nonprofits, there is a lack of regular, sustainable fundraising.

When I founded a nonprofit after the 2004 tsunami, I thought — like most people do — that when you have a cause, you have everything you need to make it happen. But passion alone doesn't bring in the donations. All you have to do is look at the facts. 47% of nonprofits consider donor acquisition a significant challenge. Moreover, 56% of organizations don't have a donor engagement strategy. These stats are a challenge — and an opportunity. 

Many nonprofits are built on a shaky foundation — large donations from a few core donors, declining government grants or corporate sponsorships. As a result, organizations can find themselves scrambling if the economy tanks, government priorities shift or donor fatigue sets in. I've seen too many good nonprofits fold because they tried to build their organizations on sand.

In years of conversations with nonprofit leaders, I've come to understand that sustainable nonprofits not only survive but thrive. They do this by constructing various dependable income sources. The following three work well for nonprofits.

Related story: The Case for Diversifying Revenue Streams in Nonprofits

1. Membership Models: Create a Community That Pays to Belong

I have a strong belief in the value of membership programs. And why is that? It’s because they establish a stream of income that recurs month after month. If people have faith in your mission, they'll subscribe. But there’s a twist: You must provide discernible, substantial worth because there are too many worthy nonprofits and causes. It isn't about giving a "member" stamp to donors. It's about content that’s exceptional storytelling. Small nonprofits can grow month after month with dedicated donors chipping in $10 or $20 a month. 

2. Fee-for-Service: Sell What You're Good At

You might have valuable expertise to offer in fee-for-service. The skills and knowledge your team has attained could work wonders in the marketplace. For instance, if your mission is to train people for work, consult with companies for the work you do. If you’re a leader who ensures the country's youth are educated, develop a suite of fee-based services for private schools that can pay to license your program. Think of it as just serving existing clients in a different way than you’ve done so far. The market has a vacuum for nonprofits’ knowledge.

3. Planned Giving: Play the Long Game That Nobody Else Wants to Play

Planned giving is an area where most nonprofits simply don’t perform well. In other words, they leave a lot of money on the table because they want money today and not tomorrow. Still, if you want to do your work in a decade, planned giving conversations with donors is strategic. Planned gifts aren't about helping donors understand their legacies, which can exist long past their lives. It's also a way to be tax-efficient for estate planning. Initiate a legacy society. Honor donors. Make them feel important. A bequest can change the course of a nonprofit.

Get Serious About Building Something That Lasts

I’ve built several organizations from the ground up, and I know that nonprofits that depend on the same timeworn fundraising methods may be in for a rough ride. The world is moving too fast for most people. Donors expect nonprofits to come up with all sorts of ways to make organizations perform at the highest levels. Donors want nonprofits to be innovative, resilient and business-minded about their missions.

Membership models provide nonprofits with both community and cash flow. Programs under the fee-for-service model allow organizations to earn income from what they already know and do. Implementing planned giving allows nonprofits to weave a fabric of financial sustainability that pays off over time. The combination of these three can take you from a place of financial vulnerability to a place of strength.

Thinking about your next campaign is fine, but what’s much better is building something that will outlast you. That’s what really counts. The only path to a thriving and growing organization is to focus on sustainable fundraising. At a time of significant instability and concern for nonprofit fundraising, meeting the moment head-on is essential. Any nonprofit can achieve great impact by adjusting course and ensuring sustainable fundraising.  

The preceding content was provided by a contributor unaffiliated with NonProfit PRO. The views expressed within may not directly reflect the thoughts or opinions of the staff of NonProfit PRO.