Diversifying Revenue Sources

It is important to diversify your revenue sources to become more self-reliant, flexible and sustainable. Diverse revenue sources support autonomy, flexibility and security.

GUIDELINES TO AIM FOR:

1. No one source of revenue should account for more than 25% of your total annual revenues.
2. You should be planning and striving for a broad funding base with at least 8 sources of funding.
3. Your unrestricted income should be significant, and sufficient to cover more than 40% of your total annual budget.
4. At least 60% of your total budget should come from five different sources.

SAMPLE FUNDING BREAKDOWN:

HOW DONOR DEPENDENT ARE YOU?

Calculate your donor dependency:

Total donor income/Total income x 100 = %
E.g., If your total donor income is $200,000 and your total organisational income is $300,000 = 67% – you are 2/3 donor dependent.

What are your (potential) sources of unrestricted revenues?

• Public contributions: e.g., Membership fees. Event income. General donations. Donations and gifts in kind.
• Sale of goods and/or services: e.g., Subscriptions or Publication sales. Fees for services like training and curriculum development, speaking engagements, analytical writing and other consulting services.
• Attentive financial management (the appropriate, strategic management of the organization’s assets to maximize their financial potential): e.g., Interest income – on your own (not funder) monies, i.e., earned on reserves and endowment funds. Renting out spare office space.