| Revenue
Sources Summary |
| Revenue
Source |
Features
of each revenue source |
| Annual
or sustained gifts |
- Provides funds for operations
- Relies on excellent project trafficking, writing,
creative design, and purchasing
- Names are acquired and converted to
regular donors using segmentation, specialized programs,
and direct response packages
- Current active names have at least one transaction
in the past 20 months
- Lapsed donors are reactivated rather than purged
from the file
- Donor life expectancy can be 5+ years on the donor
file
- Direct response tools are least expensive
- Volunteers can become donors and vice versa
- Less than 6 months lead time
- Mediocre ROIs ranging from 1:1 or worse for acquisition
to 3:1 for cultivation of active donors
|
| Major
gifts |
- Funds for operations, projects, programs, start-up,
endowment, and capital
- Relies on senior leadership’s ability to communicate
vision, ask, and close
- Prospects are screened, rated, researched, and profiled
- A multi-step cultivation and solicitation process
is used to secure gift commitments and can take
10-16 months to complete
- The first major gift need not be the last
- Less than 6 months lead time
- Good ROI, ranging up to 9:1 for seasoned staff
|
| Planned
gifts |
- Funds for projects, programs, endowment, and capital
- Relies on excellent interpersonal skills of field
liaisons and filing required registrations with
appropriate state agency
- Prospects are screened for age, gift history, and
financial capacity
- A multi-meeting planning process is used to understand
the prospect’s requirements, evaluate options,
confirm with gatekeepers, draft and sign documents
- First planned gift need not be the last one
- Can build on Major Gifts or stand alone
- 1-2 year lead time
- Very good ROI, ranging up to 12:1 for seasoned staff
|
| Foundation
grants |
- Funds for operations, projects, programs, endowment,
and capital
- Relies on solid relationships between CEO/board
and foundation leadership and solid writing skills
- A front door/back door approach is essential to
success. The front door requires fulfillment of
all application requirements; the back door infers
relationships with the foundation staff and directors
- Research and careful matching of the opportunity
to the limitations of the foundation
- Must be within their schedule, funding patterns,
areas of interest, and geography
- Must work with their staff
- Must understand their formula, words, and evaluation
requirements
- Less than 6 months lead time
- Very good ROI, ranging up to 10:1 for seasoned staff
|
| Cause-related
marketing (corporation) |
- Funds for operations, projects, programs, and people
- Relies on staff or counsel having for-profit marketing
experience
- Must understand what the corporation seeks out of
this cause-related marketing (CRM) arrangement
- Negotiation often involves tradeoffs between what
the corporation wants and the nonprofit can/is willing
to give
- Impressions analysis and valuation may be required
- Retain control of your names
- May generate UBIT
- 1-2 year lead time
- Good ROI, ranging up to 6:1 for a mature CRM agreement
|
| Corporate
giving program |
- Funds for operations, projects, programs, endowment,
capital, in-kind, and loaned services
- Relies on an excellent relationship between senior
leader and corporate leaders
- Requests are usually written and directed to a committee
for action
- Large sums of money are usually onetime
- More likely to contribute if they are headquartered
nearby, have a locally based workforce, or have
a public consumer base
- Less than 6 month lead time
- Good ROI, ranging up to 6:1 for seasoned staff
|
| Earned
income activities related to the organization’s
mission |
- Funds for operations, projects, programs, endowment,
and capital
- Relies on good business sense
- The business must work as a profit making enterprise
before it’s worth developing
- May require a separate governance structure, separation
of accounts, functions, and financial filings
- 6 months to 1 year lead time
- Very good ROI
|
| Unrelated
business income (UBI) |
- Funds for operations, projects, programs, and capital
- Relies on good business sense
- Must know the extent of taxable exposure as defined
by IRS regulations governing UBI
- 6 month to 1 year lead time
- Good ROI
|
| In-kind
|
- Funds for operations, projects, programs, federal
cost share
- Sometimes begins as a corporate solicitation for
cash and then negotiates to an in-kind donation
- Relies on good record keeping and processing
- Less than 6 months lead time
- Very good ROI
|
| Supporting
organization |
- Funds for operations, projects, programs, and people
- Relies on excellent communications between senior
leaders of both organizations
- Volunteer intensive activities generate PR, services,
and revenue
- May operate an earned income enterprise
- clearly prescribed limits of authority are essential
— good fences make good neighbors
- 1-2 year lead time
- Mediocre ROI, ranging up to 3:1
|
| Benefit
events |
- Funds for operations, campaigns, and programs
- Relies on excellent volunteer leadership to establish
and maintain momentum through planning and pre-event
phases
- For revenue generating purposes, the size of the
event is not as important as the development strategy
in place prior to the event
- Need a great concept, location, and a date that
doesn’t conflict with other local benefit
events
- 6 months to 1 year lead time
- Poor ROI, ranging up to 2:1. Exceptions are for
fully sponsored events, which can range to 5:1
|
| State
and local municipalities |
- Funds for operations, projects, programs, in-kind,
and capital
- Relies on solid relationships between CEO/board
and elected legislative leadership
- A front door/back door approach is essential to
success. The front door requires fulfillment of
all application requirements; the back door infers
relationships built over time with appropriate state
and local officials, their staffs, and committees
- Research and careful matching of the opportunity
to the limitations of the grant/funding opportunity
is essential
- Must be within the funding appropriation's guidelines
- Unused funds may need to be returned
- Must work with the cognizant agency’s staff
- Must understand their outcome and evaluation requirements
- 1-2 year lead time
- Very good ROI
|
| Churches
and denominations |
- Funds for operations, projects, programs, and people
- Relies on excellent communications between senior
organization leader and pastor/church leadership
- Good source of in-kind donation. Smaller donations
are usual, though larger churches may have more
discretionary funds for a one-time need
- Pastor approval may be key to acceptance of a funding
request
- Local mission focus may take a year to finally receive
a gift
- Must match service limitation and focus, local service
area, and theological worldview
- 1-2 year lead time
- Mediocre ROI ranging to 3:1
|
| Federated
funds |
- Funds for operations
- Relies on solid relationships between staff and
foundation leadership
- Some campaigns allow your supporters
to designate your organization as a charity even
if you are not a listed charity with that federation
or campaign
- Start-up organizations are generally not permitted
to participate
- Must fit priority focus
- Qualification process takes time
- Time consuming for staff with periodic detailed
reviews
- Must be within their guidelines
- Must work with their staff
- Must be an established organization
- 1-2 year lead time
- Good ROI, ranging to 6:1
|
|
