Earned Income, Cookies, and Nonprofits

January 24, 2018

 

We are approaching our favorite time of year – Girl Scout cookie season! We want to buy all the cookies, but we also want to take the opportunity to talk about earned income streams for nonprofits, and why every nonprofit should have one.

 

Bringing in over $800 million in a cookie season, Girl Scout cookies is one of the best-known nonprofit earned income revenue streams. Individual girls and their troops sell cookies to raise funds for weekly activities in their neighborhoods, seasonal camping trips, and once-in-a-lifetime extended field trips.

 

As a result of the projections of reduced individual giving due to the recent tax bill, now is an excellent time for nonprofits to consider earned income revenue streams. Perhaps your organization has expertise in helping people recover from addiction, and to date you’ve served primarily low-income people. A potential social enterprise could be providing addiction counselling to individuals who can pay out of pocket or with insurance. What services do you provide now that some people might pay for?

 

Nonprofits need to consider mission alignment and do their due diligence when considering earned income revenue streams.  Nonprofits should create a business plan and do a market study to see what other businesses exist in the same space and if there is a need for a new laundromat on a particular corner, or whatever the case may be. Another possibility is partnering with a for-profit business that already exists. Yes, you may need to pay taxes, but the revenue gains could potentially be worth it. Do you know of a business whose owner is interested in retiring and looking for someone (or some nonprofit) to buy their business? Or perhaps you have a board member who is passionate about your nonprofit and owns a small business? A nonprofit buying a mission-aligned business that is already in operation could potentially be a win-win for all parties.

 

We’d love to hear your ideas for earned income streams and how a nonprofit can most successfully run a business. We’ve also included additional ideas for social enterprises below.

 

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Amongst ZIM’s clients, many have innovative ideas for creating and sustaining earned revenue streams. Bayaud Enterprises has various businesses providing work training for their clients, Jewish Family Services Shalom Denver has a mailhouse and assembly shop in which individuals with disabilities work, and WorkLife Partnership is an organization that charges fees to employers to provide wraparound services to low-income employees, which benefits employers by increasing retention and employee engagement.

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