Revenue Sources
The ACHIEVE
Process | Step
2 Clarify Your Income Strategy
STEP 1 Assess
Your Goals and Financial Resource Capacity
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Sample Organization
Now, look at the whole exercise through the eyes
of a typical intermediary called “XYZ”:
“We have been around for 20 years serving
well, with good results to our clients and no bad press. We have
a strong smaller donor support base which gives faithfully every
year. Our board is knowledgeable, active and gives or raises 20%
of our annual budget. For the third year in a row, the annual fundraising
benefit has raised more money than the previous year. Our president
isn’t afraid to ask for money. We own our building and rent
out excess space at market rates giving us modest positive cash
flow. We just received the multi-year Federal grant.
On the downside, our organization has existed 20
years and is not known beyond our local community. Consequently
we are not known to funders outside our region. We generate very
small amounts in foundation and corporation gifts. Our annual donor
records are inconsistent and often inaccurate. We have no major
gifts or planned gifts programs. Our contributed revenue peaks in
December and May and dips very low in January/February and summer.
Programs are caught in this cycle and never seem to grow.
We think a couple of great opportunities are in
front of us. A Fortune 500 company has located a manufacturing facility
eight miles away. We have been invited to merge with the newer,
larger ABC organization similar to ours (though the other organization
has a significant amount of debt). Our newest board member serves
on the community foundation board. Two years ago, we were offered
a gift of 10 acres of land, zoned for light commercial usage five
miles out of town. The new Federal grant means we can use the publicity
to tell small FBCO organizations about our services.
We are aware of some ominous signs on the horizon.
Our income from direct mail is leveling off but our costs are increasing
every year. The ABC organization competes in the same service area
and started a larger, very visible, more “profitable”
annual fundraising benefit. The five block area around our building
has seen a steady decline in real-estate values over the past five
years. The ABC organization’s president was featured in several
lengthy articles. He was quoted as an authority in our mutual service
area. As a result, and according to our new board member, the community
foundation has expressed interest in providing possible support
to ABC organization.”
XYZ has been awarded a four-year Federal grant for
$2 million. Its cooperative agreement stipulates a 25%
match as cost share, or $500,000 over the term of the
grant period. The first year amount of the cost share
is $125,000. XYZ organization knows it needs to find,
raise or somehow make that match to qualify for the
Federal dollars. XYZ organization began Step 1 of the
ACHIEVE process and filled in the worksheet accordingly:
|
Goals |
| Financial
Resource Goal |
Where XYZ
is today |
Where XYZ
needs to be |
| Annual revenue |
$3,010,000 |
$3,520,000 |
| Special project revenue |
|
$500,000 |
| # donors |
$6,000 |
$9,000 |
| # volunteers raising revenue |
10 |
20 |
| Fundraising Expense |
$200,000 |
$350,000 |
| Other |
|
|
| Other |
|
|
|
| Sample
Revenue Sources |
| Revenue
Source |
Where XYZ
is today |
Where XYZ
needs to be |
| Annual or sustained gifts |
$1,000,000 |
$1,200,000 |
| Major gifts |
$400,000 |
$800,000
|
| Planned gifts |
|
|
| Foundation grants |
$1,100,000 |
$1,300,000 |
| Cause-and-effect marketing
|
|
|
| Corporate giving program
|
$50,000 |
$100,000 |
| Relagted e arned income
activities |
|
|
| Unrelated business income
(UBI) |
$250,000 |
$300,000 |
| In-kind |
$10,000 |
$20,000 |
| Supporting organization
|
|
|
| Benefit |
$200,000 |
$250,000 |
| State and local municipalities
|
|
|
| Churches/denominations
|
|
|
| Federated funds |
|
$50,000 |
| Other |
|
|
|
| Sample
SWOT Statements |
| SWOT
Area |
Statements
about your organization |
| Strengths |
- Our president is unafraid to ask for
money
- We have a solid track record
- We own our building and rent out excess
space at market rates
|
| Weaknesses |
- Our organization has existed 20 years
and is not known beyond our local community
- Our annual cash flow peaks in December
and May and dries up in January/February
and summer.
|
| Opportunities |
- We have been invited to merge with a
newer, larger organization similar to
ours though the other organization has
a significant amount of debt
- Our latest board member serves on the
community foundation board
- We can leverage the Federal grant for
PR and participation.
- We have been offered 10 acres of land,
zoned for light commercial usage five
miles out of town and below market rates
|
| Threats |
- The ABC organization began holding a
larger, very visible, more “profitable”
annual fundraising benefit
- The ABC organization’s president
was featured in several lengthy articles
about our mutual service area. As a result,
the community foundation has expressed
interest in providing possible support
to ABC.
|
|
| Sample
SWOT Statements |
| SWOT
Summary Categories |
Key Statements
about XYZ organization in each SWOT area |
| builds on or ehnances... |
- The president’s ability to ask
for money
- Our history, stability, low debt
- The Federal grant
|
| reduces or eliminates... |
- Our public invisibility, especially
to potential large funders
- The cash flow cycle that traps our growth
|
| explores or takes steps
to... |
- Use the building. Can more be done
with it to generate revenue?
- Our board member contacts with foundations
- The gift of land
|
| does not ignore or dismiss... |
- ABC’s rising reputation and media
visibility
- ABC’s apparent strength with more
broad based public support
|
|
| This analysis may point
to enhancing one or more existing revenue sources for XYZ. They
may also need to start a new revenue source. The organization
may not be able to do more in the area of annual giving; it
may have an opportunity with major gifts, with foundations and
with corporations. |
|
|
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The ACHIEVE
Process | Step
2 Clarify Your Income Strategy
