July 13, 2022

This paid piece is sponsored by Eide Bailly.

A version of this article appeared on eidebailly.com.

Nonprofits are not immune from impacts of economic uncertainty or other disruption. The present is always a good time to be innovative and think creatively to identify sustainable revenue sources for your organization.

Sustainable nonprofits address challenges with creative ideas, by embracing digital transformation and striving to be forward-thinking.

Collaboration, partnerships

Collaboration and partnerships are valuable resources to maintain and foster. Coming together on an activity or initiative that benefits all parties involved is one way to do this. Efforts can be comprised of nonprofits, for-profits or a combination of many organizations. Following the joint effort, the relationships created will help you leverage more resources and expand missions.

The benefits may be financial, operational, programmatic or all three. Financially, these relationships allow organizations to share in costs and reduce expenses tied to joint efforts. Operational efficiencies may be achieved by sharing in program development or implementation, allowing your organization to enhance its programs and grow constituents.

Overall, organizations can grow their value proposition by expanding their mission but not their budgets. The result from partnering is that both parties are stronger and better positioned to maintain efficiency and withstand changes in funding, which leads to long-term sustainability.

Mining your diamonds

You can apply the concept of “mining for diamonds” by taking a deeper look at what your organization already has – like relationships, programs, expertise, physical space and technology. Then, ask how you can make it go to work for your organization.

One area to look at is your donor base. Remember, individual donors remain the largest category of support for nonprofit organizations. Cultivating meaningful relationships with individual donors also leads to long-term support, planned giving opportunities and legacy gifts.

Nonprofit organizations should remember that individuals are also the ones who ultimately request or determine the gifting of funds from donor-advised funds, foundations, and corporate grants and sponsorships.

Another area, or diamond, is cash flow and cost containment. The adage “cash is king” remains true for nonprofit organizations. Being able to manage your cash flows and cost containment is crucial.

Social engagement

As the world relies on digital communication, social engagement can be a lifeline for nonprofit organizations. Consider the Ice Bucket Challenge that was spread via social media as one example. This initiative generated $115 million for the nonprofit. The fundraiser was public, with simple instructions and a clear deadline.

Find unique ways to stay relevant and innovative to connect with potential donors. Continue to ask these questions: How can you connect with new and existing donors to keep your mission front and center? Can you utilize social media to allow donors to be recognized by the community of people they most care about? Have you made it easy for donors to reach out to their peers?

Digital transformation

In order to continue to advance your exempt mission as a nonprofit organization, you should stay abreast of changing trends and methods for online giving. Specific action should be taken to connect with individual donors. Place-based and localized giving tends to be the norm with respect to individual giving each year.

However, leveraging the power of social media, online marketing and the ability of an organization to connect with the values and concerns of each generation could provide a distinct advantage. Consider the needs and wants of newer generations of donors who are excited to give and participate in your organization’s mission.

Finally, as you update technology to stay connected and make your processes more efficient, it is key to include cybersecurity planning in your digital transformation plans. As more personal and financial information is being stored digitally, it is critical to keep your donors’ information secure for your organization and for their peace of mind by adopting a culture of cybersecurity. Learn what types of cyberattacks target nonprofits and why they could be targeting your organization.

Pay attention to succession planning

When an executive director or CEO leaves the organization, whether planned or unexpected, the foundation of the organization can become unstable. Executive succession planning is a part of the core organizational process. It’s an important part that should not be overlooked. Does your board have a plan in the event of something happening to the CEO or executive director of your nonprofit?

Loss of strong and effective leadership can slash morale, reduce productivity, result in lost donations and even threaten your organization’s mission. However, change can be a good thing when organizations actively plan for it. If succession plans are not currently on your list, put this on the agenda as soon as possible. Planning will make the process cleaner, smoother and more transparent.

Importance of creativity and planning

Nonprofits that can be innovative and agile, while focusing on key performance indicators, will be poised to continue to move forward into the future. While not easy, having critical conversations about longevity and what success looks like are vital.

For the past 10 years, Eide Bailly has been rewarding nonprofits for creative and sustainable revenue-generating ideas with the Resourcefullness award, which this year will award one 501(c)(3) organization a $50,000 prize. The Resourcefullness award supports the financial health of the nonprofit sector while recognizing and celebrating the ingenuity of nonprofits. More information about the award can be found at eidebailly.com/resourcefullness.

To learn more about how you can set up your nonprofit for continued success, visit eidebailly.com.