Three Foundations for Successful Revenue Generation

Several years ago, I had the privilege of visiting a movie studio. Although we were physically located in sunny California, standing on the set made me feel like I was standing in the middle of a cozy New York City street. I didn’t have to go very far to be reminded where I really was. When I went to open the door to one of those buildings, reality quickly hit me in the face. The doorway led straight back outside. There was nothing behind this beautiful façade.

Too many mission-driven organizations are like movie sets. On the outside everything looks beautiful. They have a compelling mission statement, a beautiful website, and a few compelling success stories. However, if you were to open the door and look inside at the organization’s culture, board function, leadership, projected financials, and outcomes measures, their story would not be as convincing.

A compelling marketing message may be enough to run a successful direct mail campaign or fundraising event, but unless there is substance behind a nonprofit’s façade, they will be unlikely to be successful at revenue generation by securing large financial gifts from savvy philanthropists. Smart social investors want to place money in causes that have a strong mission AND those that have a track record of fiscal responsibility and success. They want to ensure that their large gift will be put to good use. Nonprofit leaders should ensure that their house is in order prior to approaching foundations, government funders, and donors for major gifts. To avoid embarrassment and rejection, make sure you have the following things in place prior to asking for a significant grant or major gift.

1. Demonstrate Strong Leadership: Nothing will destroy an organization faster than incompetent leadership. It is critical that the organization can demonstrate that there is trust among the board, chief executive officer, and staff. It is very difficult to achieve efficient and successful results when an organization is dealing with mistrust and significant team issues. Work on team development and get the right people in the right places before seeking revenue-generating activities to ramp up operations.

2. Demonstrate Good Stewardship: Organizations who can demonstrate their success with little resources will likely be given the opportunity to manage with much greater resources. When approaching a new donor, you should be able to demonstrate how you successfully managed your resources in the past to drive positive results. Understand how much revenue generation your organization needs to deliver and sustain your desired level of success. You should be prepared to communicate the gap between what resources your organization currently has and what is needed to fill the gap. If seeking a onetime gift, you should also present a plan for how you will be able to sustain support for a successful program once that particular funding is over.

3. Know Your Outcomes: There is a lot of competition for philanthropist’s dollars. Stand out among the pack by including measurable outcomes in your case for support. Spend the time to develop a system for measuring how your organization is changing the lives of your clients and those you serve. Go beyond discussing how many people you plan to serve. Using your current outcomes, forecast what the new funding will mean for changed lives and circumstances based on previous results.

Successful revenue-generating activities require connections from multiple levels. Donors are often acquired by asking current friends of the organization to ask their connections for significant gifts. Another avenue is to seek out larger foundation or government grants. Regardless of the funding stream, potential funders are going to require a thorough review of your organization before giving you a large gift or grant. Working to build a strong foundation will make seeking large financial gifts and grants much easier. People want to partner with organizations that can demonstrate strong leadership, good stewardship practices, and solid outcomes. Once these are in place, board members and friends will be excited to speak on your behalf to their friends and connections. Grantors will have confidence that your organization has the capacity to handle even larger gifts. Focusing on these things will position your organization as a leader in your industry and you will be guaranteed to stand out from the crowd.

If you are looking to strengthen your organization’s capacity to position your organization for increased revenue generation, Measurement Resources is here to help! We can help you increase your leadership effectiveness, strategic thinking, and measure your outcomes. Our favorite part is to celebrate our clients’ success when they are able to increase their revenues and ultimately have a greater impact on the world! Contact us today for your FREE 20-minute strategy session to prepare your organization for revenue generation. You can also read more related content, like this post about how to effectively communicate impact data.

Do you want more information about increasing funding, morale, positive press, and organizational impact? Join the Achieving Excellence Community and receive our free eBook, Ten Tips to Open the Door to More Grants (and Other Funding): Overcoming Common Mistakes in Outcomes Measurement. Just enter your information in the box on the top right of this page and it will be sent directly to you!

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