Revenue Diversification through Philanthropy

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Information about Revenue Diversification through Philanthropy
Business & Mgmt

Published on March 5, 2014

Author: mdwconsulting



Here are a few tips before embarking on integrating philanthropy into your nonprofit business model. First take a look at your organization's culture identifying the ideal path for your organization; that could be a particular type of fundraising or even deciding to go another route such as social enterprise.

What’s the ultimate goal?

Sustainability of your Mission     Smoothing cash flows through out the year Managing risk by reducing reliance on one source of revenue Diversifying among your fundraising sources for more predictable revenue Building long-term, sustainable revenue streams

Philanthropy Today

2012 Recipients of Contributions Total = $316.23 Billion Source: Giving USA FoundationTM / GIVING USA 2012

Sources of Philanthropy 2012 Contributions: $316.23 Billion Bequests, $22.13 7% Corporations, $18.97 6% Foundations, $47.43, 15% Individuals Corporations Individuals, $227.68, 72% Foudations Bequests Source: Giving USA

Philanthropy slowing Source: Giving USA FoundationTM / GIVING USA 2012

Build on your cultural strengths.

What’s your culture?     Entrepreneurial Contractual Philanthropic Transactional

Building a Culture of Philanthropy.

What does that mean?      Philanthropy is celebrated as a driver of your mission Volunteer and staff leaders passionately believe in and invest in the mission Donors are seen as a partner in organization’s success CEO is a respected leader in the sector Rigorous evaluation of impact is a key part of your culture

Giving Pyramid Planned Giving Capital Campaigns Estate Gifts Capital Donor Personal Solicitation Project Donor Annual Fund Proposals/Grant Writing Annual Donor Renewal and Event Donors Events & Mail New Donors/Members

Prospect Migration Gift Philanthropic Capacity Initial Relationship Education Solicitation

Philanthropy with Planning

Build Philanthropy into your Planning    Philanthropy will not fill the gap between ideas and reality Consider philanthropy as a mix as you would every revenue stream Philanthropy may not always be the ideal choice depending on your organization’s culture

Sources Typical RevenueArts Organization Streams Typical Revenue Stream for Earned Revenue Ticket Sales Social Enterprises Memberships Classes Annual Giving Contracts Events Major Giving Direct Mail Grant Writing Public Funding Sponsorships Campaign Revenue Current/Former Board Members Foundations Philanthropists Uses General Operating Funds Restricted Funds Salaries Facilities Fundraising and Marketing Construction Endowment Furnishings Campaign Costs

Areas of Opportunity Board Fundraisin g Grant Writing Boar d Givin g Personal Solicitation Hous e Partie s Capital Giving Planne d Giving

Key Questions      Are leaders willing to make a long-term investment in a fundraising program? Will the top development officer be a senior leader in your organization? Do board members consider your organization their top philanthropic priority? Does the board chair understand philanthropy and is an active fundraiser? Are external relations the CEOs top priority?

Create the Building Blocks      Build your board’s leadership capacity Raise your organization’s profile in the sector Build staff leadership team so that CEO can be externally focused Evaluate and document your impact Create compelling messages that resonate with donors and use them

Thank you! Mark D. Warner, President MDW Consulting, Inc. 9 West Washington, Suite 400 Chicago, IL 60602 (312) 286-6277 Twitter: @mdwconsulting

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