For-profit ventures help nonprofits shore up the funding they need to maintain and expand their programs

By Abny Santicola

Though there’s profit to be had in starting an earned-income venture, there are risks. But the risks can be mitigated by proper planning, identifying potential pitfalls and coming up with strategies to address them. Peeler says her firm recommends organizations find the intersection between the following three things to determine if an earned-income venture is right for them:

Organizational assets. This includes things like the organization’s brand or reputation, and the skills and expertise it has, and looking at the opportunities that these assets present to the organization in the form of a potential earned-income venture.
Market opportunity. Are there enough customers to sustain the venture? How many potential customers are there, and what would they be willing to pay, etc.? Interview potential customers, check out the competition and get an understanding of the marketplace you’re thinking of entering.
Organizational capacity. How well is the organization positioned to be successful with an earned-income venture? Does your organization have the ability to, say, process checks and issue invoices to customers? Does it have the capability to manage customer-service inquiries? Does it have an entrepreneurial culture that allows people to take risks and the “organizational stomach,” as Peeler says, to sustain the ups and downs of a business cycle?

Organizations also should ensure that they have the right talent in place to run the venture.