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Don’t wait for a crisis to diversify your revenue

For many nonprofits and charities, revenue diversification happens when a crisis strikes such as the loss of a primary funder or investor. But, if nonprofit organizations can be strategic and proactive in their revenue diversification, they can mitigate this risk.

At Volunteer Alberta, our leadership team has been working hard to diversify our funding. So, I sat down with our Executive Director, Karen Link, to discuss revenue diversification and how other nonprofits can get started.

What does revenue diversification mean to you?

Karen: It means financial sustainability – it’s looking at multiple revenue streams to mitigate risk and to reduce dependency on just a few sources of funding.

Why is it important for nonprofits?

Karen: Revenue diversification goes beyond risk mitigation and financial resilience. It’s demonstrating your relevance to more stakeholders. When you diversify your revenue, you have to think about who cares about what you care about. It’s not just the government. It ranges from ministries to corporations, to foundations, to individuals.

There are different sources of revenue such as:

  • Governments (federal, provincial, municipal)
  • Foundations (family, community or corporate)
  • Earned revenue (fee for programs and services)
  • Donations and fundraising (lotteries, casinos, donations)

And there are other emerging trends in revenue diversification including:

  • Saving costs by partnering on service provisions (shared staff, shared infrastructure, and shared programs and services).
  • New business models that are similar to social enterprises. For example, partnering with a private business that wants to do something that affects your clients. So, that’s something you could be a part of but not necessarily initiate.

How do organizations even begin the process of revenue diversification?

Karen: There are nine steps to revenue diversification. Step one is you need to understand the impetus for change. You need to understand the need to establish funding that’s reliable, flexible and varied from different sources. Your board needs to be on board as they have a role to play; they have to understand the vision and work their networks.

Once the need is clear, your organization undertakes other steps including a review of your funding sources within the last 10 years, identifying potential investors, evaluating the internal capacity you’ll need, consulting with others, and managing risk.

Finally, you develop your implementation strategy and put it into action. After that, it’s all about assessment and continuous improvement. Improve, scale slowly, and keep building within your means; you need the capacity and the time to do it.

What are the common barriers nonprofits experience when they seek to diversify their revenue?

Karen: Internal capacity is often the biggest barrier. You’ll have to be able to identify prospective new funding streams or investors and establish and maintain those relationships. You need dedicated people for any type of business development. You need to invest in the right people to generate more revenue.

Most times, people try to focus on business development with existing resources, but they don’t realize it takes additional resources to develop those business models and establish/maintain those relationships. You have to spend money to make money.

What tips/recommendations would you give to nonprofits struggling to find other sources of revenue?

Karen: The number one thing is to consult – talk to others about what they’ve done, talk to other organizations, engage your board, engage your staff, and think outside the box. Think about who cares about what you care about. Look at how people are making money and saving money.

There’s no one size fits all. But, when you talk to other people about how they’re diversifying their revenue and how they’re generating revenue, you can get ideas for your fund development plan.

Another important thing is to have a clear aspirational goal – what is it that you want to see? And then make and test your assumptions. This is your theory of change.

For example, your assumption could be I believe people would pay more for our services. And your theory of change could be if we build a platform where the reporting and resources would be so valuable, people will be inclined to pay. Be bold and put those assumptions out there and test them.

Are you ready to diversify your revenue? Get started with the 9 steps to revenue diversification!

Adrienne Vansevenandt

Volunteer Alberta

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Member Spotlight: Hinton FCSS emboldens informal volunteering in community

Imagine trees wrapped in hand-knitted scarves on a cold winter’s day or children handing out lemonade on a hot summer day. In Hinton, you can easily come across informal volunteering or random acts of kindness. And, Hinton’s Family and Community Support Services (FCSS) is no different.

One of Hinton FCSS’s main goals is to foster community connection and reduce social isolation. As a result, informal giving or volunteering organically flourishes in their programs and services.

Friendly Visitor Program turns strangers into friends

Recently, Hinton FCSS launched the Friendly Visitor Program; a program made possible entirely by volunteers. The volunteer centre provides the framework, but it is brought to life by people deliberately offering their friendship to another person. Adults are welcome to apply to become a volunteer companion or a recipient.

“Friends are just strangers waiting to happen,” says Lisa Brett, Volunteer Centre Coordinator at Hinton FCSS.

Formal volunteer transforms opportunity into informal volunteering

While the program is relatively new and typically considered a formal way of volunteering, one volunteer match, Ginnie and Kim, demonstrates how formal volunteering can transform into informal volunteering.

“Ginnie and Kim visit so often that Kim has become a part of Ginnie’s family,” says Lisa. “It has helped Kim’s life and her mental health, and fulfilled the gaps in her social life. It’s exceptional.”

Instead of doing bare minimum visits, volunteer Ginnie went above and beyond in the program by simply living and expressing kindness, and in the process, turned a stranger into a life-long family friend.

“Informal volunteering is essential to individual, family, community, national, and global wellbeing,” says Lisa. “When you model kindness, you never know who you’re inspiring. Those small gestures, they add up. They are so critical to community health and wellness. You might create a ripple effect.”

How Hinton FCSS staff encourage informal volunteering

Another possible reason informal volunteering blooms in Hinton FCSS’s programs could be due in large part to its staff and their dedication to spreading kindness.

“My coworkers are mega informal volunteers! I am very inspired by their deeds all the time,” says Lisa. “Some bake and share the treats at work, some participate in every single fundraiser, some are animal advocates, and some babysit others’ children.”
“Informal volunteering is a new word, but not a new concept. To me, informal volunteering is consciously exhibiting kindness and caring. It is about performing without expectations. It is being human. It is being an active citizen,” remarks Lisa.

To learn how to encourage informal volunteering in your community, contact Lisa Brett at Hinton FCSS.

Hinton Family and Community Support Services (FCSS) focuses on “people helping people help themselves.” Hinton FCSS enhances the social well-being of individuals and families in the community through their programs and services. For over 24 years, Hinton’s Volunteer Centre has operated under Hinton FCSS, making volunteer matches and community connections as a way to sustain people as active participants in the community.

 

Adrienne Vansevenandt

Volunteer Alberta

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Share the gift of cheer: Random acts of kindness

Often times when we think of social impact, we think of the grand gestures that are at the forefront of the sector and the most talked about. We think about impact in terms of financial donations, advocacy, and formal volunteering because these are the easiest stories to tell (and the ones our funders usually want to hear about).

As a result, we tend to forget about the day-to-day actions that strengthen and vitalize community, and support our overall wellbeing – random acts of kindness and the simple gesture of paying it forward.

The science of kindness

I came across an article from Random Acts of Kindness that talks about the science of kindness, and how easy it is to make a difference. Kindness is teachable and contagious – we can inspire kindness in others and build up compassion, creating a desire to help others. Simply witnessing an act of kindness can improve your mood and can create a domino effect of good deeds in your community.

So, what do we mean by a random act of kindness?

  • Hold the door open for the person behind you.
  • Pay a sincere compliment to a stranger on the bus or train.
  • Shovel your neighbour’s walkway.
  • Buy a person in need a meal or hot beverage.
  • Send a “thinking of you card” to someone you haven’t seen in a while.

These are just a few ideas to spark your next random act of kindness. As you go about your day, think of one thing you can do to be kind to a stranger. Together, we can help spread kindness and goodwill across the community.

For resources or to learn more about kindness and ways to improve your overall wellbeing, visit the Random Acts of Kindness website.

Follow Daniela’s six days of giving journey!

Daniela is passionate about helping her community. Currently, she is encouraging others to join her six weeks of giving initiative. You can follow her journey on our Facebook page.

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