Nonprofit Revenue Generation

Nonprofit organizations rely on multiple types of revenue, including program fees, donations, and earned income. It is a commonly held belief that nonprofits should seek as much diversity in their revenue streams as possible (Hager & Hung, 2020). Benefits of this revenue diversification include flexibility, autonomy, and community embeddedness. However, having too many revenue streams can lead to increased risk and vulnerability (Fulop, 2012). Additionally, diversification of funding sources can increase administrative costs. Instead, the organization needs to be strategic. Not all sources of revenue are appropriate for all organizations. Therefore, nonprofit leaders must decide which revenue sources make the most sense for their organization. This publication was designed to help nonprofit organizations develop a strategic revenue generation plan that aligns with their mission and organizational capacity. The publication discusses steps in choosing a revenue strategy, as well as common mistakes to avoid.