wouldn't it be awesome to be able to count on some recurring revenue for your nonprofit every month how great would it be to be able to budget and plan your programming around funding you know you can count on recurring Revenue can be a major asset to nonprofits but not many nonprofits are fully tapping into its potential in this video I'm going to talk through four recurring Revenue ideas and strategies plus one bonus one and I really hope that they help you think through how you can be able to build up some sustainable funding so you can do more [Music] good welcome or welcome back I'm Amber Melanie Smith I'm a nonprofit founder former executive director and I make these videos on YouTube to help you create a social impact whether that's through starting and growing a nonprofit or social Enterprise or socially conscious business or any of the other dozens of ways you can change the world you're definitely going to want to check out my newsletter Chang maker Mondays the link to subscribe is below I send out tips every Monday you can guess by the name all about making impact that's helping you fundraise it's helping you mobilize people in your community it's helping you do all sorts of things my goal here is to accelerate the social impact that you're capable of making which I know is a lot for each of the recurring revenue streams I'm going to talk about I'm going to explain what it is I'm going to give you a couple of steps on how you would get it started and then I'm going to give you based on some industry averages an estimate of how much you'd be able to bring in each month with that type of recurring Revenue so let's go the first type of recurring Revenue I'm going to talk about here is monthly giving programs and this is a pretty common sense one but I think not enough nonprofits are really taking advantage of it so mully giving programs are what they sound like uh you can encourage your donors instead up making just a one-time donation encourage them to make a monthly donation or some other Pence and it's automated so every month it can just take out the donation until they say stop I don't want to do that anymore this creates a steady and predictable amount of revenue for your organization so let's think through a real life example one real life example is the saint dude Children's Research Hospital they have a monthly giving program called perers and hope and donors will give every month varying amounts whatever amount works for them and they'll receive updates on the impacts that their donations are making they might even get access to exclusive content so it's kind of almost like a subscription uh to a service but careful not to frame it that way because um then you're talking about an exchange of goods and that would potentially impact the donations tax deductibility we can talk about that later or in other videos so setting up a monthly giving program is pretty simple the first thing you need to do is create a mechanism for people to be able to give monthly a lot of the donations software oration forms that exist out there allow for this you just need to say be able to accept monthly recurring gifts here and give people that option right on of the form the second thing you need to do is create a compelling campaign with messaging that explains the pros and benefits of joining the mly giving program to donors you can even explain how it will create the ability to be uh a sustainable firm suprent for your organization I've seen how the organizations do this before if an organization's leader has the trust of its community and its stakeholders then that leader really just needs to say hey look we need to be able to predict some of the revenue coming in that we can scale our impact we would love for you to join as a monthly Giver to help us achieve a couple challenges you want to look out for in running a monthly giving program include just donor fatigue donors getting a little tired of giving all the time or perhaps if you had a larger one-time campaign where you might expect some larger donations you might see some donors saying yeah I already give monthly so I don't need to donate to that which is totally reasonable so looking out for that and thinking of some ways you can keep them engaged and excited about giving mon over month a couple of ways you might do that are again sharing the impact of the donations that uh is occurring and offering some special recognition may you have a donor who's been giving a year or two years or five years give them some special recognition if they're willing to be called out publicly of course you always have to check but hey this person's been a longtime donor for five years here's how amazing they are we're so grateful thank you Bob or whatever their name is another strategy is to create a sense of community among monthly donors often times people give to an organization because they want to feel like they're connected to something so giving donors an opportunity if they would like to connect to each other to connect to other volunteers in the organization to connect to you further could be more ways of keeping them engaged so let's talk about that estimated Revenue what might you expect to generate from a monthly evening program this is going to be based on a mailing list of about a, subscribers for your organization so this is not starting with zero this is after you've done some work to build up your audience so let's say 5 to 10% of your mailing list converts to donors and the average gift is about $25 that uh conversion rate is potentially an industry standard then on the low end you might see 50 donors convert to monthly givers and on the high end maybe $100 so you're talking about $1,200 $50 to about $2,500 per month with that size mailing list and that could convert if you're doing a really good job to estimated revenue of the ballpark of 15,000 and 30,000 a year a second type of recurring Revenue we're going to talk about is membership or subscription based programs and this is kind of an offshoot of the monthly giving program so just like the name suggests and just like you might see in other types of Industries this is is a program where someone subscribes with a dollar amount per month perhaps and is receiving something special special benefit like educational content or uh access to something right so um one of the reasons I wanted to uh urge caution in how you approach this is because the word membership can mean something different than you expect in in the world of nonprofits some nonprofits are membership organizations which means that actually their members might have a vote and that might not be what you're going for with this so just be really careful in how you frame this and on the other side the subscription based side you want to be very careful that the services or products you're offering for that subscription are something that furthers your social Mission because otherwise you might be hit with what's called unrelated business income penalties if the IRS thinks that your nonprofit is generating revenue from something that is totally different from its Mission then you might be asked to pay taxes on that anyway let's talk about some examples of the subscription or membership based programs that are doing it really well one real life example is the National adubon Society when you join as a subscriber you might get their magazine you might get access or discounts to special events you might even get some uh discounts on burning resources if you want to try out something like this your first step is to just figure out what you're going to offer and how that brings genuine value to the subscriber why would they want that thing how does it connect to their passions in terms of structuring the subscription you might do a tiered system where you know there's different levels of of giving and donation based on what they're getting let's talk about a couple challenges you might face with this type of recurring Revenue just like with donor fatigue you might see some turnover right here people just kind of get tired or bored of the benefits so you're going to want to figure out ways to keep them engaged and keep them on their toes and keep it interesting and again the whole thing about making sure that what you're offering furthers the mission of your organization in the example I gave of the audabon society you know they're all about protection of of birds and animals and so by offering these additional educational resources people are being educated on how to do that so that's furthering their mission strategies to keep your subscribers engaged could include just like with the monthly giving programs providing updates behind the scenes informationa reports you know getting their feedback asking them regularly is there something different you'd like to be seeing in this program how can we offer you what you're looking let's talk about estimated Revenue again using the example of a mailing list of about a th000 subscribers we're looking at an industry conversion rate of 3 to 7% and then let's say that the average monthly subscription is somewhere in the range of $10 to $50 so on the low end you're looking at about 300 a month and on the high end you're looking at like 3,500 a month for an annual revenue of somewhere in the wall Park of 3, to 40,000 so it can be a broad range and of course you always need to think about the amount of time you're putting into to managing it and if that's the ROI the third type of potential recurring Revenue we're going to talk about is fees for service or fees for your programs your program fees another phrase for this is earned income talked about this in some other videos and what this basically is is when you're charging people for some of the services or programming that you offer as a nonprofit this could be trainings or cooing or col of speaking or special events it could be any number of things I've seen organizations do everything from offering a moving service to uh you know even nonprofit theater ticket sales is an example of this let's talk about one real life example and that's the American Red Cross so the Red Cross charges a some doll amount to offer its CPR and other special trainings and it's doing these trainings on a regular basis so they have a rhythm down they know okay we're going to do five to 10 trainings this month and that's going to uh generate x amount of Revenue come up that we can come out again because the mission of the Red Cross is you know disaster Readiness disaster relief and all sorts of other things related to that by offering trainings that further people's education on these topics they are still in alignment with their mission and not doing unrelated business and again that unrelated business is what they might be taxed on if they were doing it your first step in exploring this potential recurring Revenue stream is to assess your organization's Mission and the skill sets of your team and figure out what services or programs might be monetized then you want to develop a plan on monetizing it and making sure that the people you're asking to pay for these services or programming are the see people who pend afford them a lot of nonprofits serve vulnerable populations who might not have the resources to pay for programs and services the idea here is to generate revenue from the people who can afford to contribute so that it can supplement the costs to help those who cannot afford to contribute One Challenge to look out for with the strategy is to competition you know if you are offering a program or service that you're charging money for there could be other non profits out there that could be even for-profit businesses doing something similar so just something to be aware of when you're doing your market research to develop your strategy if this is the route you go and when you're developing your strategy to launch this successfully and avoid some of that competition you're really want to hone in on how working with your organization benefits the community and your organization's unique value proposition and skill sets let's talk about some estimated revenue and I'm going to say this one's going to widely vary because in theory you could have your your whole uh you get have a whole system kind of separated from your organization that Focus is on your program fees and it could be bringing in more than the number I'm about to tell you um but I'm just talking about an average conversion rate for a thousand people on your mailing list you know you have thousand people on your mailing list let's say 2 to 5% of that mailing list is actually the target audience for this specific service so then maybe it's $100 to $500 per service that you offer so on the low end if 2% of your mail list converts you're talking about 20 clients paying $100 each that's like $2,000 and on the high end 5% of your a th000 subscribers canvert that is 50 clients and they're paying $500 now you're talking like $225,000 so again it's a really broad range but potentially this could be ring in you know several thousand dollar you know 20 to $25,000 I'll you hundreds of thousands of dollars depending on how much time and dedication you're putting into building it up the fourth recurring Revenue stream I'm going to talk to you about today is actually recurring easy to run fundraising events now normally I don't recommend big events that are doing fundraising because they can take a lot of time to put on but in this particular situation we're talking about manageably sized events that the organization has learned how to run so efficiently that super easy to execute on these events these could be simple events they could be networking dinners they could be webinars they could be um you know monthly Gatherings it could be any sorts of things they'll have to be giant Galas let's talk about a real life example uh the Alzheimer's Association is one of these that does these kinds of events they have a walk to end Alzheimer's and they host it AR newly so they know that they have formula to put on a successful event they know all the pieces that go into it they figure out their you know the amount of fundraising they're going to be able to do for each event um and they've got their people in place and they're Nationwide so they have a bit of scale and they have mechanisms for participants to jump in and help raise money too if this is something you're interested in the first step to implement it is simply to decide what kind of event format is going to be really really manageable and streamlined for your organization especially at its current capacity if you are a small shop you are probably talking about small events like the networking Gathering idea I talked about before you just need a venue and like 30 to 50 people and ask for donation of5 to $10 on the door and boom we have a extremely manageable uh low touch fundraising event in terms of a challenge you can expect you got to remember if you're asking the same people on your mailing list to attend an event every month they're not always going to and some of them might get tired of those events too so this is really a strategy if you think that the events you're going to offer are going to be very appealing to those on your mailing list for an extended period of time and or you have strategies to build your mailing list over time as well which hopefully you're doing regardless of what events you put on a couple of strategies is you could mix up the event themes you know let's say you do this networking Gathering every month it's a different theme you know that could keep it fresh you could offer incentives for attendance like you know raffle if your if your region allows Raffles to be done exclusive content you can only catch at this event maybe one time it's a costume Affair who knows all right so let's make some Revenue assumptions and again these are just assumptions and they're based on your mailing list of at least a thousand subscribers if you've got 5 to 15% of your mailing list attending events on a semi regular basis um and let's say the average donation or event ticket is $2 to $50 then um you're talking maybe like 50 attendees coming per month on the low end that could be thousands of dollars like right 12,000 yes up to several thousand dollars but again in my opinion you're probably not going to see you know a 90 to $100,000 return on these at uh the small of a mailing list and if you're not doing something really um fresh every single month because that would be a lot of people coming to your eventss all the time all right I promised a bonus recurring Revenue strategy so here it is it is investment income I would consider this an advanced strategy for the main reason that you have to have some money in order to invest it how you do this as a nonprofit is you could start an endowment which is think of it like a high yield savings account for nonprofits you know it generates interest um you can also just like anyone else invest in income generating assets so you as a nonprofit can totally participate in that a lot of private foundations do this they might establish an endowment and then give away you know the interest generated to other Charities but you can also do that as a nonprofit that's not a private Foundation a real life example is the Ford Foundation all right so a couple steps if you are interested in implementing this strategy the first thing is you've got to develop an investment policy for your organization so you and your board would get together and you determine what are your nonprofits investment goals how much money are you going to be putting in and when what are the situations that you know might impact your ability to put the money into the investment account is there a situation in which you would withdraw money from the investment account so all these sorts of rules need to be written out in some kind of investment a policy and I recommend getting the advice and help from a financial professional for this it's possible because you'll have someone with those skills already on your board they might be able help you take through that and again this is an advanced recurring Revenue strategy because you would need a significant amount of money to put in an endowment or to invest in order to generate enough interest for it to be you know helpful to your operations challenges is uh if you have invested the money you could lose the money that just like anyone else so that is a challenge to look out for it might put some primaries about that into your investment policy as well uh it's also a long game strategy so you're probably not going to be uh generating very large amounts of money right off the bat uh if you don't have a lot that you're already putting in couple of strategies here just like anyone else doing investing you might want to diversify your invest ments to uh mitigate the risk that you be taking um also you're a nonprofit so you might want to be investing in socially responsible companies or assets too let's talk about some estimated Revenue I'm assuming a very small endowment or investment strategy of like 50,000 to $100,000 in a typical endowment I would expect to see multiple millions of dollars to generate a meaningful amount of Interest so at the rate that I talked about a lowend 50,000 with a return of 4 to 7% you talk in just a couple thousand dollars a year like 2,000 to 7,000 on the high end if you've invested $100,000 just one final thought slash disclaimer here the numbers and some of the estimates I provided are based on doing one of these recurring Revenue strategies but keep in mind let's say you were to try a handful of these or even all of them at the same time you would expect to see a lower conversion rate because you're continuing attack the same audience over and over again for different things and people just get fatigued so if you're going to do that then growing your audience is going to be a really key strategy to making it work I'd love to hear from you are you already incorporating some of these recurring Revenue strategies into your nonprofit fundraising share in the comments what's working what's not working what are some of your challenges the change maker Community here can help favor it out with you and if you're looking for tips and stress strategies and ways to accelerate the work that you're doing don't forget to subscribe to my newsletter change nature for Mondays and of course check out the other videos on my channel I have over 200 all about starting a nonprofit fundraising getting Community Support all of that good stuff last thought if you're on Facebook check out my Facebook group change the world or bust we've got thousands of people in my around the world and we'd love to see you us bear once again I'm Amber Melanie Smith and I'll see you next time