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5 CHARACTERISTICS NONPROFITS SHOULD  CONSIDER BEFORE JUMPING INTO EARNED INCOME

Posted March 30, 2015 by Michael Oxman & filed under Margin & Mission Ignition, No Margin, No Mission.

Editor’s Note: Michael Oxman and Larry Clark are the co-founders, managing partners and principals of No Margin, No Mission.™ The Patterson Foundation is partnering with this national consulting firm and social enterprise on the foundation’s new Margin & Mission Ignition Initiative.

There is frequently a tendency for people to want to “jump into” those activities that offer potentially lucrative opportunities for financial growth. By jumping in, however, they may fail to consider whether or not they are actually prepared to pursue such an endeavor.

For nonprofit organizations, earned income is an activity that increasingly fits such a bill, especially given the strong desire by entrepreneurial leaders, board members, donors, and other stakeholders to generate new and needed revenue sources for their organizations.

So much so, in fact, that nearly 150 of these individuals from more than 90 nonprofits in Sarasota, Manatee, Charlotte and DeSoto counties recently participated in the exciting launch of The Patterson Foundation’s newest initiative, Margin & Mission Ignition, designed to help local nonprofits build their entrepreneurial capacity, boost revenue, and heighten mission impact.

Working in partnership with the experts from No Margin, No Mission™, a national consulting practice and social enterprise, the inaugural session was the first of three educational labs focused on topics that address earned-income revenue generation and business planning.

With such exuberance and enthusiasm for earned income during this first educational lab, there was a natural tendency for many of the participants to emerge from the lively and thought-provoking half-day session proclaiming, “We’re ready for earned income!”

However, as part of the curriculum for that lab, leaders were advised that earned income should only be pursued by a nonprofit organization if and when it is at an appropriate stage of readiness to “jump in” and move forward. After all, most of us have learned the hard way that in work just as in life, preparedness and readiness are essential ingredients for making an endeavor successful.

Take, for example, one of No Margin, No Mission’s™ recent client partners in the Sarasota/Bradenton area that had all the “right” ingredients for earned-income success. While they had previously encountered some obstacles in their pursuit of earned income, they had a strong desire to persevere and find a way to make it work. In addition to possessing a number of essential characteristics for earned income, they also had a strong, “can-do, must-do, will-do,” attitude needed to advance their business venture. As a result, we’re happy to report this organization has been, and will continue to be, successful at earned income.

On the flip side, another recent No Margin, No Mission™ client partner in the region appeared to have all the “right” ingredients for earned-income success. As it turned out, while this organization talked about being prepared for earned income, they quickly found themselves unable to “walk the talk.” They decided to pull the plug on their initiative when their business plan was nearly complete because their leadership and board were not willing to allocate the proper staff time and resources to the project. Bottom line? They were not committed to seeing the business planning and implementation work through to completion.

As nonprofit leaders and their boards consider an organization’s preparedness to pursue earned income, we offer the following set of five important characteristics that should be carefully and honestly assessed to help answer the question, “Are we ready for earned income?”

LEADERSHIP: Are the Executive Director and Board committed to and engaged in earned income?

• Is the leader a champion and/or supporter of earned income?
• Is the Board on board for earned income?
• Is the executive team in it for the long haul?

WILLINGNESS: Is there a strong desire and enthusiasm to pursue earned income?

• Is there a shared belief and understanding of earned income among staff, volunteers, donors, and other key stakeholders?
• Are there passionate advocates for earned income?
• Is there a “green light” for earned income and agreement to overcome barriers?

READINESS: Is the organization prepared to take action for earned income?

• Is the organization driving toward thrivability?
• Is there organizational stability?
• Is the organization strong at planning and execution?

CAPACITY: Are there available resources for earned income?

• Is the organization willing to allocate the needed talent and time for earned income?
• Are there existing and/or potential funds available for earned income?
• Are there existing and/or potential partnerships and strategic alliances that can be leveraged for earned income?

CULTURE: Is there strong entrepreneurial spirit?

• Does the organization see opportunities where others don’t?
• Is the organization nimble, flexible, and open to change?
• Is the organization willing to take calculated risks?

As the leadership, board, and other key stakeholders from your organization consider these five characteristics for earned income preparedness, it is important to give them the thoughtful, honest, and candid consideration they deserve. The answers to the questions above shouldn’t be simple “yes” or “no” responses, but rather, a good, hard look inward to understand and assess the current situation within your own agency.

If the answer is “yes…we’re ready for earned income,” we urge you to pursue a process for business planning and implementation. Conversely, if the answer is “no, we’re not quite ready for earned income,” we would suggest investing the time, talent, and resources needed to properly prepare for the journey.

Want to learn more about earned income and related topics?

• Read all of our Guest Blogs for The Patterson Foundation.
• Visit No Margin, No Mission’s™ Web Site and Resources page.
• Contact moxman@NoMarginNoMission.org or lclark@NoMarginNoMission.org.
• Follow No Margin, No Mission™ on Facebook and Twitter.