Many NFP’s are looking beyond traditional grants and fundraising to increase revenue and maximise growth. From user paid products to crowd funding there are various other revenue streams that NFP’s can strategically tap into. It is worth keeping an eye out or what’s out there and new opportunities to increase revenue streams.
Here are some innovative ways you can diversify Revenue channels:
Product driven revenue/User Streams
In some industries there is already a shift in funding models from block funding to user pays, such as the shift the NDIS is creating in the disability sector. A number of NFP’s are now offering paid products and services to deliver value while increasing revenue streams.
The Hunger Project who have partnered with McKinsey and Company to co-design their leadership programs, taking leadership lessons from their projects in Uganda, Bangladesh and beyond, and translating them into a leadership development program for corporate executives. Their clients include the Commonwealth Bank, and course fees are channelled back into The Hunger Project’s in-country programs. (CBB)
There has been an increase in social organisations that have launched products that generate revenue for causes. Examples include; Guide Dogs have recently branched out into the product driven space with Beau’s Pet Hotel in Adelaide
To make this model work you need to make sure that your customers get value for their money. Product development needs to be on point.
Centre for Social Enterprise defines Social Enterprises as:
“Social enterprises are revenue-generating businesses with a twist. Whether operated by a non-profit organization or by a for-profit company, a social enterprise has two goals: to achieve social, cultural, community economic and/or environmental outcomes; and, to earn revenue. On the surface, many social enterprises look, feel, and even operate like traditional businesses. But looking more deeply, one discovers the defining characteristics of the social enterprise: mission is at the centre of business, with income generation playing an important supporting role.” (Centre for Social Enterprise)
A good example of a successful social enterprise is Burn Bright, they develop experiential leadership, wellbeing programs and national camps for student development. Their programs are devised to allow students to make informed decisions. Burn bright have partnered with over 200 schools.
The Top 5 Areas That Burn Bright is Measuring:
- Motivation and goal setting
- Friendships and relationships
- Ethnicity and cultural background
- Bullying – online and offline
- Causes for stress (Burn Bright)
Andy Skidmore, Founder and CEO of Burn Bright will be sharing his story on establishing social enterprising as a core revenue stream for Burn Bright and how NFP’s can leverage off that revenue stream at the Diversifying Revenue Channels in For Purpose Organisations Conference.
Social Impact Bonds
Social impact investment is gaining momentum in Australia. The company Social Ventures has closed many social impact bonds across Australia.
KPMG defines Social Impact bonds as:
“Contractual arrangements that tap into the need for NGOs to fund their innovative programs to fuel positive social change; for government to direct precious taxpayer dollars to innovative or proven solutions to combat complex social challenges; and for investors to see their money achieve positive, lasting outcomes. The approach offers collaborative possibilities that cut across sectors traditionally demarcated by ideological boundaries.”
How do they work?
It is important to understand which revenue streams work best for your organisation and the best practices around each stream.
Learn how to diversify your revenue stream from industry experts like Claire Rogers, CEO of World Vision Australia who will be sharing her insights on ‘Encouraging innovation through commercial leadership’ at the Diversifying Revenue Channels in NFP’s Conference on the 16th & 17th April 2019 in Melbourne.