Giving Compass’ Take:
• These authors at Stanford Social Innovation Review discusses the many different ways and outlets that nonprofits can generate revenue.
• Nonprofits that wish to integrate revenue-generating activities into their operations must think strategically about who will benefit from them and how they will further their social mission. How does your nonprofit generate funds?
• Here’s how funders can support nonprofits.
As the boundaries between business and charity become increasingly blurred, many nonprofits are considering how to pursue their mission through revenue-generating activities rather than relying on philanthropic contributions alone.1 This trend toward commercialization was sparked by dwindling governmental and donor support in the 1980s and ’90s, which created mounting pressure on nonprofits to diversify their funding sources.2 More recently, starting in the early 2000s, new types of resource providers emerged seeking to support nonprofits that generate financial—not just social—returns. By the early 2010s, even traditional charitable foundations began pursuing impact-investment strategies.3 Encouraged by these opportunities, nonprofit leaders increasingly see commercialization not as a necessary evil, but as a promising way to enhance and expand their social mission.
Integrating revenue-generating activities within a nonprofit’s existing organizational model is not simple. To be effective in the long term, any shift toward commercialization must be consistent with the organization’s social mission and use its core capabilities. Yet nonprofits often struggle to find new approaches that enhance—rather than distract from—the social mission. Moreover, commercialization initiatives stretch already limited resources and often require new skills and expertise beyond the capacity of the current team. How, then, can nonprofit leaders identify a viable commercialization strategy?
Read the full article about generating revenue for nonprofits by Marya Besharov, Jean-Baptiste Litrico & Susanna Kislenko at Stanford Social Innovation Review.
If you are looking for more articles and resources for Impact Philanthropy, take a look at these Giving Compass selections related to impact giving and Impact Philanthropy.
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