Apr 21, 2022
One of the biggest issues that associations face these days is how to raise funds in a world where in-person events aren’t as reliable a source of income as they once were. Before COVID, many organizations relied on event registration and sponsorship to bring in the majority of their revenue. However, with the pandemic, many nonprofits were forced to pivot and find alternative financing.
Now more than ever, securing alternative revenue streams that can withstand extenuating circumstances is the best way to ensure the financial stability of an association. Often associations are too focused on one revenue stream, whether that’s events and conferences, membership dues, or investments, leaving them more likely to hit financial troubles when something goes awry.
Learning to diversify your nonprofit revenue streams can help you increase your revenue and prepare for your association’s future.
Finding Ways to Diversify Nonprofit Revenue Streams
When it comes to creating a revenue gameplan, ensuring that you are considering a comprehensive strategy is key. You need to approach revenue from as many angles as possible, considering all your options and committing to many sources. It’s best to start internally and weigh your options across other assets within your membership, advertising, sponsorships, education, and other events before looking outward.
When you look externally for opportunities, evaluate your potential partners to see if they can become an extension of your team. Long-term partnerships work best for these high-stakes relationships because you can continue to build upon them and support each other no matter what situations arise. Just be wary of any relationships with larger partners whose funding can be more restrictive. Many times large companies have restrictions on their financial timelines that could prohibit you from accessing funds when you need it.
It also helps to have a strategic plan or broader organizational goals to reference while planning your revenue sources. This will help your association stay on-track to meet your goals, while finding revenue sources that mesh well with your mission. Everything you do should align with or contribute to your strategic plan.
Quick Wins for Association and Nonprofit Fundraising
Often clients will need low hanging fruit to bring more cash flow into their organization during times like these. Talley’s association experts craft customized association management plans to help organizations unlock revenue, but some common quick wins include:
Start an endorsement program
Many companies have budgets with which they can endorse association events, or they can use it to sponsor specific activities, like a conference panel. When approaching an endorsement or sponsorship opportunity, it’s important to approach bigger partners first, because they will have more funds for grants and sponsorships. It’s also important to keep in mind that this route may require you to double dip and return to partners and members a few times so you need to be mindful of who you’re asking for help and why, so you don’t wear down any good will.
Build corporate partnerships
Industry partners can have multiple pots of money to use for professional and community sponsorship that association events can provide. Partnering with companies in your industry or related field can help you unlock extra income sources, especially when you work with corporate discounts. You can charge companies flat fees for membership or event attendance, then have an additional discount for employees to attend your events.
Nurture existing relationships
As with any industry, relationship building is key. When you invest in building relationships with all kinds of partners, you’ll have opportunities to connect with their fellow board members, employees, association members, and other networks. A great way to get started is to keep all of your current connections in the loop with your association. Just giving people a small update on what you’re up to can help keep you top of mind for any future connections.
Effectively delivering resources when and where your members want to access them increases the value of their membership. These days, this means delivering resources online, with streamlined access and purchasing, with the expectation that members are just as likely to be using a mobile device as a desktop computer.
Laying the Foundation for Financial Success
It’s no shock that for a truly diversified and future-proof revenue model, you need to invest time and resources into crafting a strong and adaptable revenue plan. While it takes time to think through your revenue strategy, in the end you have a plan that will last with you through any changes and will set your association up for financial success.
When it comes to a future-proof revenue strategy, there are three key things to keep in mind:
The integrity of your choices for current and future financial situations
Aligning your financial plan with your association’s overall goals and strategic plan
Having buy-in and active participation from relevant team members
Decision Making for Now and the Future
When world events like a pandemic or an invasion of a sovereign nation occur, the global economy and political stage can change overnight. While many associations tend to be more conservative with their money in these moments, they end up risking current financial standing for their future financial success. When making any kind of financial decisions, it’s important to understand how your choices impact your current financial outlook and your future opportunities.
Events like these can force people to make narrow-minded decisions that may seem safe now, but ultimately risk their future financial position. Right now, inflation is on the rise, making goods and services more expensive than ever. While it could seem smart to hold onto money during uncertain times, without any money invested, your cash reserves will dwindle in the bank, where interest rates are on the decline.
A good place to start is with a bridge bucket, which can ideally hold up to five years worth of expenditures and set you up to combat any economic or geopolitical uncertainty. This bucket lives between your low-interest savings account and your long-term investment portfolio, that way you always have liquid capital when you need it even if most of it is invested.
Become an Active Participant
It’s not uncommon to hear that an association goes about their finances in a certain way because a trusted source advised them to, however, a smart financial plan includes buy-in from everyone who is working on an aspect of your nonprofit's finances. Active participation in an association’s financial management can help your team make smarter decisions since you know the ins and outs of your situation.
Revenue is an essential part of an association. Even as a nonprofit, the revenue that you can generate can go directly back into the organization to make better member programs and help your organization run more efficiently. If you need help diversifying your revenue stream and moving toward a non-dues model, our association experts can tailor a financial plan to your organization to make sure you’re not leaving money on the table.
Is Talley Right For You?
Fill out a questionnaire with some basic info about your association, then we will reach out to discuss if association management is right for you and how we can help.