Assessment for revenue strategy

This 1-page Strategy Brief shows the areas we typically assess when asked to design a Revenue Strategy for a non-profit organization in South Africa.

The findings from this assessment create the foundation we need to design a suitable strategy. This framework is based upon a recent proposal I developed for a client.

Note that we “revenue” as the money that an organization earns through the sale of goods and services (i.e. trading activities). A subset of income.

Assessment for income-generation strategy

This 1-page Strategy Brief shows the areas we typically assess when asked to design an Income-Generation Strategy for a non-profit organization in South Africa.

We try to establish what is going on, working or not working, and what should change or be improved. The answers create the foundation we need to design a suitable strategy. This framework is based upon a recent proposal I developed for a client.

Note that we define “income” as the money coming into an organization, which has been earned or given. Income includes donations, grants, dividends, fees for the sale of goods and services etc. Income includes the donation of non-monetary things (e.g. time, goods and services). Income includes revenue.

Keeping your non-profit organization going: which strategy do you need?

South African non-profits are struggling to generate the income they need to fulfill their purpose and sustain themselves. As such they are embarking on a mix of strategies to improve their circumstances.

However, I’ve noticed that many non-profit organizations in South Africa are confused by the differences between a “revenue strategy” or “social enterprise strategy”, an “income-generation strategy”, a “sustainability strategy”, and an “organizational strategy”. This has led to much confusion with specialists like me being asked to design one type of strategy when an organization wants and needs one of the others.

This article aims to clear up the confusion around which strategy to invest in. It will clearly explain the differences between these four strategies and indicate when each is required. It complements my social enterprise glossary which aims to improve strategic clarity through clarity of language.

Income sources and types

This 1-page Strategy Brief shows the difference between Income Sources and Income Types.

Social Enterprises and Non-Profit Organizations are able to access a broad range of customers and income sources, which they can contract in different ways. It is unwise to think in very narrow channels based on one’s legal form. Here are some ideas.

“Necessary endings”: why we need to make them to move forward

We are all called upon to make endings in our work and personal lives. This can be a painful process that many of us postpone until it is too late. Endings can also be enabling – they can help us get unstuck and move forward in the right direction.

Learning how to end things is both a life-skill and a leadership-skill.

However, it is one of the things that my clients most struggle with – how to identify when to end something and knowing how to do it in the right way.

The book “Necessary Endings” by Dr Henry Cloud is profound and changed how I work with endings. It is the book that I most frequently recommend to clients. I encourage you to read it. This article pays homage to the wisdom in this book.

This article discusses some themes from the book that are most relevant to my consulting work. It adopts an organizational focus, while the book also explores the role of endings in our personal lives. This article will get you thinking more about the inevitability and value of endings.

Social enterprise glossary

I’ve designed this glossary to help social enterprises and non-profit organizations in South Africa think clearly about their strategies and business models.

Strategic clarity involves clear thinking, and clear thinking requires clarity of language. Many of us also rely too much on jargon, which clutters our minds and encourages lazy and fuzzy thinking.

Here is some of the terminology that I regularly use in my consulting practice and lectures, and my short descriptions of what each term means in simple English.

Charity and philanthropy need to work hand in hand

Charity is seen as a virtue by humanists and all major religions. But it has also been polarising. Some people believe strongly in it and feel that it reflects the inner heart of humanity, while others believe that it cultivates weakness and dependency amongst the underserving. Even the ancients grappled with the very practical implications of charity.

Nowadays, the news is full of stories of philanthropists who have given their fortunes away to help others and for the betterment of society.

This article explores the concepts of charity and philanthropy, the similarities and differences, and when each is appropriate. It is not a deep dive into these topics, but rather a high-level review.

This has been one of the hardest articles for me to write. I’ve thrown out two earlier versions, started from scratch and done more research and thinking. Even though I’ve been in this field for 22 years, I’ve realized how my passion for social entrepreneurship had obscured my appreciation of charity. I’ve also learned when charity is the only moral and appropriate response to a situation.

Donors 10% overhead requirements do more harm than good

In the effort to be a good custodian of their philanthropic funds, some donors impose a cap on overhead expenditure (i.e. indirect costs). This amount is typically somewhere between 10%-20% of total grant value.

These organizations, and much of the public, believe that by limiting such expenditure, they will be getting more value-for-money; that the endeavour will be more moral. This belief is based on a superficial view of how non-profit organizations achieve impact.

While there may be contexts when this rule is appropriate, its blind application can easily harm good organizations.

Justifiably, this method of funding is frequently referred to as the “starvation cycle”.

This article will explain what is meant by the 10% overhead cap, how it can easily do more harm than good, and how donors can use much better measures to judge the merit of their philanthropic investments.

Setting up a side business: it is not the “holy grail”

I strongly believe that non-profit organizations should strive to cultivate additional income streams, including earning revenue from social enterprise activities. This helps to fund operations, build reserves and manage risk.

Some non-profit organizations choose to earn revenue from a “side business” – an undertaking which is distinct from their core offering.

While I support this sentiment, I believe that organizations tend to make two mistakes in how they implement these ideas. The first mistake is to underestimate the complexity, time and costs to achieve this. The second mistake is for organizations to embark on such a venture before they have strengthened their operations and improved their thinking. The third mistake is to neglect opportunities to earn an income which are more readily available.

This article discusses this second and third mistake. It suggests that the establishment of a side business should be the result of a journey and not the first step. It encourages organizations to improve their functioning and attend to weak areas, before they start looking outside of themselves for solutions. It also reminds organizations to thoroughly investigate opportunities to earn an income that may be closer in reach.

Market don’t fundraise!

Those organizations that market themselves well have a distinct advantage over those that don’t.

Marketing and public relations (PR) helps to amplify an organization’s brand. It helps them to command an adequate “share of voice” and stand out amidst all the other organizations that are competing for our attention.

I believe that fundraising needs to align with marketing and PR, and form part of a concerted strategy. This will make it much easier for a social enterprise or non-profit organization to raise funds or win customers.

This article will explore some of my thoughts about the importance of marketing and PR, and tactics that organizations should consider in each of these areas. It will also touch on how these organizations should navigate the online world.

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