For any organization, relying on a single or limited set of revenue streams can be a risky strategy. It’s no secret that many of us fundraisers have leaned heavily on direct mail campaigns or major gifts from high-net-worth individuals. While this approach may have historically worked well for your organization, the landscape of philanthropy is shifting. In many ways, we’re seeing that the future of fundraising lies in cultivating smaller, consistent gifts from a broader base of supporters through exploring innovative giving opportunities.
Why Diversifying Revenue Streams Matters
The days of putting all our eggs in one basket are officially behind us. Diversifying your revenue streams isn’t about adding layers of complexity and an increased workload for you and your team. It’s about creating a stable foundation for your nonprofit, allowing you to weather economic shifts and changes in donor behavior.
However, diversification doesn’t mean pursuing every possible opportunity that’s out there. Not every organization needs ten different revenue streams, each more complicated than the next. Instead, focus on finding the right mix that aligns with your mission, audience, and most importantly, your resources. Whenever you can, don’t hesitate to embrace the opportunity to try new approaches, test what works, and build a more resilient funding model for your organization’s future.
Exploring Different Channels
There are a number of innovative ways to expand your nonprofit’s fundraising efforts. Not sure where to begin? Here’s a breakdown of some revenue streams worth considering:
1. Smart Giving Options
- Cryptocurrency Donations: With digital currencies becoming mainstream, accepting crypto donations can connect your nonprofit to a growing demographic of tech-savvy philanthropists. Though cryptocurrency can feel unpredictable, organizations like The Giving Block specialize in helping nonprofits incorporate cryptocurrency into their fundraising strategy.
- Donor-Advised Funds (DAFs): DAFs allow donors to make a tax-deductible contribution and recommend grants over time. These funds have seen a surge in popularity and are a significant untapped resource for many nonprofits, so be sure to consider this powerful giving vehicle.
- Planned/Legacy Giving: Planned giving, also known as legacy giving, allows donors to make impactful contributions through their wills, trusts, or estate plans. These gifts often represent a donor’s most significant philanthropic commitment, helping to secure your nonprofit’s long-term sustainability. Consider promoting bequests, charitable gift annuities, and beneficiary designations as part of your fundraising strategy to build a lasting legacy for your mission.
2. Search Engine Marketing (SEM)
Search Engine Marketing involves using paid ads to ensure your nonprofit appears in search results when people are seeking causes like yours. With tools like Google Ad Grants, which offer nonprofits $10,000 of in-kind advertising per month, you can drive traffic to your website and increase visibility of your donation pages, events, and campaigns.
3. Paid Social Media Advertising
Though more controversial than ever, social media platforms like Meta, TikTok and LinkedIn can allow nonprofits to target specific audiences through paid advertising. You can use these tools to promote fundraising campaigns, events, or volunteer opportunities. Paid ads can also help you reach potential supporters who may not yet know about your mission and attract more qualified leads.
4. SMS Fundraising
Text message campaigns are a powerful way to engage donors directly and quickly. SMS fundraising allows supporters to donate through their mobile devices with just a few clicks. This channel works particularly well for urgent appeals and event-based fundraising efforts, as 90% of receivers are likely to see your message within three minutes.
5. Connected TV
Connected TV (CTV) ads on platforms like Hulu, Roku, and YouTube help nonprofits reach donors where they already spend time. With advanced targeting and measurable results, CTV delivers personalized, full-screen messages that boost engagement and maximize ROI.
6. Display & Audio Advertising
Display and audio ads expand your fundraising reach through strategic placement on websites, apps, and platforms like Spotify and podcasts. Display ads boost awareness and retarget donors, while audio ads create emotional connections, making both powerful tools for driving donor engagement.
7. Peer-to-Peer Fundraising
Empower your supporters to raise funds on your behalf. Platforms like Classy, GoFundMe, and Fundraise Up allow individuals to create personal campaigns for birthdays, challenges, or other events. This approach not only generates revenue but also introduces your nonprofit to new networks of potential supporters.
8. Corporate Partnerships and Sponsorships
Partnering with businesses can unlock new funding opportunities. Companies may sponsor events, donate a percentage of sales, or support your nonprofit through employee giving programs or matching opportunities. Corporate partnerships also help increase your visibility in the community.
9. Membership Programs
Offering a membership program with exclusive perks – like newsletters, early access to events, or branded merchandise – creates a sense of belonging for your supporters. This model can provide steady income while deepening donor loyalty.
10. Online Merchandise Sales
Selling branded merchandise, such as t-shirts, mugs, or tote bags, is another way to diversify income. Beyond generating revenue, merchandise helps spread awareness of your mission when supporters wear or use your items. They can also be featured as a motivating premium when supporters take a significant step with your organization, like becoming a sustainer or meeting a certain gift threshold.
Questions to Ask Before Adding a New Revenue Stream
Before diving into a new fundraising stream, it’s critical to evaluate its feasibility and fit for your organization. What works well for some organizations doesn’t mean it works well for all. Only you and your team can determine what is right for you.
Here are some essential questions to ask:
- Does it align with your mission? Will this new revenue stream enhance your mission and resonate with your current and potential supporters?
- Who is your target audience? Are your donors likely to engage with this method of giving? For instance, crypto donations may appeal to younger, tech-savvy supporters, while DAFs are more suited to wealthier, older donors.
- Do you have the resources to implement and sustain it? Adding a new revenue stream requires time, staff, and often upfront investment. Ensure you have the capacity to manage it effectively.
- What is the return on investment (ROI)? Consider the cost of setting up and maintaining the new stream compared to the potential revenue it will generate.
- How will you measure success? Set clear goals and metrics to evaluate whether the new revenue stream is meeting expectations.
- What is the risk involved? Assess any legal, financial, or reputational risks associated with the new method of fundraising.
- How will it integrate with your current strategy? Ensure that the new revenue stream complements your existing fundraising efforts rather than competing with or cannibalizing them.
Consider Taking the Leap
Diversifying your fundraising streams isn’t just about increasing revenue – it’s about building a more resilient organization. By exploring innovative options like smart giving, SEM, or SMS fundraising, you can reach new audiences and reduce your reliance on a single source of funding. But remember, every new initiative requires careful planning and evaluation to ensure it aligns with your mission and resources.
Now is the time to try something new! Experimenting with a different type of revenue stream could open doors to untapped donor segments and set your nonprofit on a path to sustainable growth.
If you’re ready to explore how diversifying your fundraising can transform your organization, let’s talk. We’re here to help you develop a strategy tailored to your unique needs. Contact us today to start the conversation!
