When the economy is unstable or turbulent, it’s always a stressful experience for nonprofits. During these times, mission-driven organizations often find that they receive fewer gifts and encounter increased competition when applying for grants. This can lead to revenue shortfalls, which, in turn, make it difficult to advance your mission.
Reliance on one-time funds is always a bit risky, and it’s during uncertain times that these risks are most apparent. But the key to breaking this cycle isn’t finding the right fundraiser. Instead, it’s building a diverse and sustainable revenue model that will sustain your nonprofit long-term.
Let’s look at some best practices your organization can implement to generate sustainable funding through reliable income streams.
1. Strengthen Connections With Existing Supporters
Your most sustainable revenue source is your current supporter base. After all, it’s far more cost-effective to retain an existing donor than it is to acquire a new one—research shows that nonprofits spend about $0.20 per dollar raised to retain existing donors. In contrast, it costs $1.50 per dollar raised to acquire a brand-new donor.
The foundation of a strong supporter base is building relationships that go beyond just asking for money. Here are a few key techniques for improving donor relationships:
- Prioritize donor recognition. Ideally, your nonprofit should send a donation receipt immediately after receiving a gift to confirm that the payment went through. Add a quick thank-you to your donation receipts, then send a longer message of gratitude within 48 hours of the gift. This is the first step to showing donors that you appreciate their support and lays the groundwork for securing a second gift.
- Invite supporters to engage with your mission. Not every message you send should be a donation ask. Instead, mix in messages that tell them about upcoming events, share good news, or even offer a look behind the scenes. You may even invite them to consider other forms of engagement, such as volunteering, making in-kind gifts, and joining your legacy giving society.
- Leverage donor segmentation. Your supporters are unique, which means they’re interested in different aspects of your nonprofit. Segment your donors based on shared characteristics to ensure the content you send them is relevant and tailored to their needs. For instance, you may send supporters who’ve recently volunteered at an event a heartfelt thank-you and a list of upcoming volunteer opportunities they might want to consider.
- Share your nonprofit’s impact. Donors want to know that your nonprofit is a responsible steward of their funds and that their gifts are being used to further your mission. Share both qualitative and quantitative details about your nonprofit’s impact to demonstrate that they’ve made your successes possible. For example, you can share statistics about your recent fundraising event, including the amount raised, as well as impact stories from beneficiaries discussing how the funds have positively affected them.
Strong donor relationships result in more than just additional gifts. When your supporters feel connected to and passionate about your mission, they’re more likely to spread the word about your nonprofit and advocate for it on their own time. For example, your most loyal supporters may be open to helping your organization fundraise through peer-to-peer campaigns. This extends your reach at a very low cost, all powered by the trust you’ve built.
2. Establish a Recurring Giving Program
Predictability is a significant part of sustainable revenue. Instead of relying solely on one-time gifts, you can make giving more reliable with a monthly giving program. Recurring donors provide a steady stream of funding that you can count on, month after month.
Start by building a monthly giving option directly into your nonprofit’s website. This option should be featured alongside your one-time giving option. It can be as simple as a checkbox labeled “Make this a monthly gift?” next to your options for one-time giving amounts. That way, it’s easy for donors to decide on and commit to making a recurring donation.
Bloomerang also recommends optimizing your donation page and ensuring that the giving process is simple before you launch your recurring giving program. Make sure that your donation page is branded to your nonprofit, the form only asks for necessary information, and the page is optimized for all screen sizes. Also, ensure it complies with the Web Content Accessibility Guidelines, and that your donation processor accepts multiple payment options.
Then promote your monthly giving program in your nonprofit’s communications, including your email newsletter and through social media posts. Emphasize the impact of consistent support and discuss how a monthly gift provides stability for your core programs in these messages.
3. Inspire High-Profit In-Kind Giving
Sustainable revenue isn’t limited to monetary gifts. In-kind donations (or non-cash gifts of goods and services) can fill the gap, as many supporters are eager to give tangible items. The key is to channel this generosity by ensuring donors understand what your organization actually needs.
For example, online wishlist fundraisers let you ask supporters to purchase specific items on behalf of your nonprofit, from office supplies to event materials. This directs in-kind giving to your exact needs, reducing operational costs. You may also publish a list of in-kind gifts you’re looking for directly on your website, so supporters can donate secondhand items they no longer need but that you could use.
Another powerful model is monetizing your in-kind gifts. For instance, let’s say you follow Funds2Orgs’s advice to host a shoe drive fundraiser. Instead of asking community members to donate money, you’ll ask them to give you gently worn, used and new shoes. Your shoe drive fundraising partner will handle all of the logistics and send your nonprofit funds for the pairs you collect, allowing you to easily turn donated shoes into cash.
4. Build Corporate & Social Partnerships
Building direct partnerships with local businesses creates a sustainable, mutually beneficial revenue stream. This moves your nonprofit’s corporate connections beyond just employee matching or one-off volunteer programs into mutually beneficial relationships that require more cultivation but offer significant long-term returns.
Start small by approaching local businesses to sponsor a program or event. In exchange for funding, you can offer brand visibility to your engaged audience. Another option is a cause marketing campaign, where a business agrees to donate a percentage of sales from a specific product to your nonprofit. Frame these opportunities as ways to enhance the business’s reputation and gain access to your supporters as prospective customers.
This strategy is effective because it leverages the company’s existing brand and customer base to generate revenue for your cause. It’s a low-cost way to tap into a new audience and secure funding that is often tied to a company’s marketing budget, not just its philanthropic one.
Sustainable nonprofit revenue relies on building a resilient model from several high-impact, low-effort practices. Start by picking one of these ideas to implement. Over time, you can build upon and expand your sustainable revenue model, creating a stronger foundation for your mission’s future.
About the Author
Linda N. Spencer
Linda N. Spencer is a global philanthropy strategist and storytelling catalyst who bridges the worlds of philanthropy and narrative creation. She has over two decades of senior-level experience raising more than $200 million for nonprofit causes. One way Linda pursues her passion for making a positive impact in the world is through professional storytelling. She believes in the classical definition of philanthropy, which involves asking people to believe in something bigger than themselves. She is a member of the Funds2Orgs team as their lead content strategist.
