Event recap · Building fundraising resiliency: Diversifying revenue

Revenue diversification is top-of-mind for nonprofit leaders. It’s natural for organizations to gravitate to a small number of revenue sources, such as events, grants, or a small number of big donors. But, as many organizations have experienced recently, it’s also risky.

In the second of three panel discussions co-hosted by Aperio and the NYU SPS George H. Heyman, Jr. Program for Philanthropy and Fundraising, our panelists explored the ways in which organizations can secure a diverse coalition of loyal donors and build organizational resiliency:

• How can diversification create fundraising resiliency?

• How do we build new revenue streams, particularly on a base of a robust events program?

• How do you avoid spreading your team too thin?

Moderator: 
Cassy Cox (she/her), Senior Director, Institutional Partnerships - Accion 

Panelists:
Abby Farris Rogers (she/her), EVP, Chief Development Officer – YMCA of the USA
Cortney Nicolato (she/her), President and CEO – United Way of Rhode Island 
Tunde Wackman (she/her), Chief Development Officer – World Central Kitchen

Change is certain.
Revenue growth is not. 

Things are changing—rapidly. New and challenging circumstances are unfolding at an unimaginable pace in our world and our communities, and it feels especially tough right now to hold onto any sense of certainty.

"Once you have solid ground—seems like it moves again,” Cortney Nicolato, President and CEO of United Way of Rhode Island, said during our discussion.  

So we asked our panelists: How can nonprofits thrive in this constantly shifting landscape? Raising money in a turbulent (to say the least) economic season, recruiting and retaining staff amidst the ripple effects of the Great Resignation, finding hope to change the world when our planet is burning and people are suffering—it’s exhausting and overwhelming.

How can we set our organizations on a clear path to success when the future is very much not clear right now? We don’t have all the answers (if you do, please give us a call!). But we know that nonprofits are crucial to addressing the world’s greatest challenges—and diversifying revenue can create stability for organizations during uncertain times.

We gathered a panel of nonprofit leaders for an enlightening discussion on strategies that have effectively grown predictable revenue for these regional, national, and global nonprofits. We’re excited to share key takeaways that might support your own organization in building fundraising resiliency amidst this season of uncertainty.  

Data is paramount. 

Your data has a story to tell. Consistently analyzing revenue streams can help determine where you invest more time, energy, and resources. As you explore new income sources and experiment with strategies, data can indicate which revenue streams offer the most potential—and where you should allocate your resources.

"Data has to be the infrastructure with which you're looking at diversifying. Social entrepreneurship and innovation need to be woven into everything,” said Cortney.

Revenue diversification also presents an opportunity for nonprofits to take a new approach to growing income: thinking more like a business. Beyond fundraising contributions, are there creative opportunities to bring in more money with what you already have? Exploring sellable assets, earned revenue opportunities, or building capital are all ways that you might be able to diversify revenue for your nonprofit. 

Cortney shared how, in her work with United Way of Rhode Island, data influenced her team to adapt to the changes in corporate philanthropy. UWRI primarily focused on corporate giving in the past. Now, they’ve shifted toward relying on two major streams of income: corporate partnerships and major gifts (including planned giving). This has enabled UWRI to become more fluid and responsive to the changes in how companies and employees are giving, while reducing their risk with more stable income coming outside of corporate partners. 

Listen to your community. 

Just as our world is changing, so too are our donors. How donors give has changed drastically over the past 10–15 years, and nonprofits must adjust to meet them where they are. As we all know, technology has totally changed the game, especially for younger donors. But despite hyper-connectivity to devices, many donors still want to feel connected to an organization beyond a screen.  

Fundraising is, and has always been, all about relationships—that’s another constant we can count on as fundraisers.

To build affinity and long-term relationships, we must not only talk to, but listen to all community stakeholders—those we serve, those who serve alongside us, and those who fund our work.

What does it look like to go out and create community conversations? Engaging your community as thought partners: ask the questions, actively listen, avoid assumptions, and be responsive.

“[We try to] walk with them on the work we do, engage with them in a way will enrich both the nonprofit and the donor,” said Abby Farris Rogers, EVP and Chief Development Officer at YMCA of the USA.

Diversification doesn’t end with fundraising: engaging a diversity of donors imbues your organization with perspectives and ideas that can yield more innovation. At World Central Kitchen, grassroots donors from varied backgrounds are connecting with the organization as thought leaders, coming with creative ideas to pitch, and pushing the nonprofit to do more.

YMCA of the USA has found a wide range of best practices developed by local chapters in different regions across the country as they engage and collaborate with their communities.

Fear less. Raise more.  

It might feel daunting to dip your toe into unchartered fundraising waters. But in today’s world, you can’t afford not to. The pandemic’s economic impact proved the need for this: Organizations that were able to pivot and create innovative ways to engage their communities weathered the storm, while those that relied heavily on a few revenue sources struggled.

From Cortney’s perspective as a funder, an organization that lacks diverse revenue streams is a red flag. Funders want to see that nonprofits are planning for now and the uncertain future. Funders supporting nonprofits with a narrow source of income risk becoming the only entity keeping the organization afloat.

Tunde Wackman, Chief Development Officer at World Central Kitchen, said she really enjoys the entrepreneurial approach to revenue diversification, which requires her to think strategically and take calculated risks. That includes making data-driven decisions about where to focus her team’s work, with the knowledge that attempting to do it all won’t work.

“Implementing new [revenue-generation strategies] can come with the risk of spreading teams too thin. So, I try to keep in mind my team's wellbeing to avoid burnout,” she said.

The world is changing. People are changing. Fundraising is changing. To make a meaningful impact on the world, fundraisers must evolve and adapt to try new strategies and meet donors where they are. Change is also hard—but it can be worth it.  

Abby said it best: “Don't be afraid to try. Not everything's going to work, but you have to be putting new things out there... you'll find the thing that works for your organization.” 

One last parting thought from Cortney: "This makes it fun, right? And also, infuriating and frustrating!" 

Colvin Hedgepeth

Colvin Hedgepeth is an Associate Director, Client Services at Aperio Philanthropy. Prior to joining Aperio, she supported grassroots to international organizations, including leading the fundraising efforts for Blue Sky Fund, an outdoor education organization in her hometown of Richmond, VA, to running events for the U.S. Olympic and Paralympic Committee for the 2016 Olympic Games in Rio de Janeiro.