Starting a nonprofit means diving into a fiercely competitive market that’s getting fiercer. Intimidating? Yes. The cold, hard truth? You bet.
Your organization’s philanthropic motives may set you apart—but only from your perspective. In reality you’re a worthy organization in a sea of other worthy organizations. But a pioneering nonprofit business strategy could make the difference between your new nonprofit and its competitors.
John Fulwider is a coach, speaker and consultant who partnered with Mike Renken, executive director of NeighborWorks Lincoln, to help large and small nonprofits of various missions in their Lincoln, Nebraska community. Fulwider and Renken sought solutions for nonprofits that need to diversify their revenue sources. So they hosted a group discussion on integrating for-profit business practices in nonprofit organizations. Their session focused on a webinar sponsored by the Stanford Social Innovation Review, titled “Hybrid Ideal: Combining Nonprofit and For-Profit Models.”
A hybrid business model, which strikes a balance between social mission and commercial enterprise, is a promising approach for your nonprofit. As Fulwider explained, “Increasingly, as government funding sources have dried up and competition for foundation grants has gotten more intense, organizations need to look to earned revenue opportunities.” As made plain by the enthusiasm among participants in the discussion, the webinar’s proposal for a hybrid ideal has great potential.
To get started on hybridizing your nonprofit’s income strategy, Fulwider advises finding services your nonprofits can charge for, but on a sliding scale. The method “turns your constituent into a customer.” But, of course, “the ultimate goal is the mission. If [your]…organization is considering a hybrid business model, point everything toward the mission.”
Matthew Lee, a Harvard Business School Ph.D. candidate, has as much hope for nonprofit hybrid business models as Fulwider. “Nonprofits can successfully engage in commercial markets more than they have in the past,” Lee said in the webinar. Indeed, the marketplace seems ripe for a productive disruption like this one. Experts cite a bleak fundraising outlook for the rest of 2012—and, more than likely, 2013.
So shake up your nonprofit’s income strategy with a daring business model. To learn more about integrating your nonprofit’s business model with for-profit revenue tactics, consult “In Search of the Hybrid Ideal.”