Editor's Note: This post is part of a series featuring nonprofit leaders' perspectives on what's it's like and what it takes to participate in an earned-income planning and implementation process. These nonprofits worked with the consultants at No Margin, No Mission on their strategies.
I have a number of wise friends in my life. One of them, Rob Lane -- a CPA, but better known as a dedicated community activist, said something that was like a whack on the head: "Nonprofit is not a business model. It is a tax status."
Rob said this when I was asking him for assistance in beefing up the Finance Committee for the Marie Selby Botanical Gardens Board of Trustees, which I chair. "You want real inspiration? Get with Larry Clark and Mike Oxman of No Margin, No Mission."
Having coffee days later with Larry and Mike enlightened me. Organizations with earned recurring revenue benefit in at least two ways. First, it reduces the heat of the metaphorical overhead Chihuahua that nips at the heels of every nonprofit organization. And relief of that pressure can mean more time for thoughtful pursuit of larger grants, gifts and focused development efforts. At the same time, recurring revenue allows an organization to more strongly deliver on its mission. It reminded me of when I started my own real estate company, where smaller lease commissions bought me the time (and rent and utility payments) for my larger and more time consuming deals to come together.
Fortunately, our botanical waterfront oasis has many areas of earned revenue. Special events, gift shops, concessions -- but where to start? The summer season, where the prior culture had been to accept low revenues and rely on Lines of Credit, seemed the perfect start. Our goal was to create $10,000 per month for three months of new net revenue for the summer of 2014.
Was our team of senior management and board members successful? Yes and no. Did we reach the revenue goal? No. But what came out of the process has resulted in a much stronger organization.
- Our culture has shifted to greater expectations of everything we do.
- Every event now requires a business plan with a P&L statement. (I must add that our new CFO Carol Ann Malinowski, whose first day on the job at Selby was Day 1 of No Margin, No Mission Boot Camp, came with a predisposition and skill in this type of accountability.
- The organization became more comfortable with endeavors that do not work. After all, nothing ventured, nothing gained, right?!
- Our board had a new vocabulary and experience level as we sought a new CEO. Imagine our collective glee when, during her initial interview, we heard our now new CEO, Jennifer Rominiecki, say that she wanted to focus on earned-revenue opportunities at Selby during her first few months.
- The effort helped focus on new hires. The first major hire based on the earned-revenue work was a director of special events, a critical revenue center for Selby.
This summer, we are launching "Splashin' Saturdays at Selby," a take-off on a less-than-successful project from No Margin, No Mission but implementing some lessons that we have learned while trying something innovative yet unproven.
I am certain that more inventive earned-revenue opportunities are near at hand with our stronger and more agile Selby Gardens' Family.
Learn about these and other concepts used in TPF's approach to philanthropy.
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