New Revenue Options Bring Risks, Benefits
Fundamental Questions that Have Not Changed with Time
(from a conference co-sponsored by Management
Cornerstones in 1985)
Several fundamental questions arise when thinking about revenue
generation and nonprofit organizations.
- If a decision is made to generate revenue, how does
a community organization, arts group or social service agency
make a "fit" with an enterprise without having it dominate
the agenda? Is the generation of revenue linked to a part of a
nonprofit's mission (e.g., job creation, economic development
or providing services)? Or is it a primary goal to support other
activities?
- Should nonprofits plunge into unrelated business ventures as
a means of raising funds, granted that the IRS policy on the subject
is murky at best?
- What effect will creating an enterprise have on service to
the poor in situations where community resources are already stretched
to the limit? Are we expecting certain groups to pay for services
and others to receive them for free?
- Do nonprofit enterprises undercut small businesses through
unfair competition? One speaker, for example, advised conferences
to work closely with local businesses, noting that "people
don't take on their friends."
The conference stressed that revenue generation/enterprise/business
ventures offer a challenge to nonprofits; and that this challenge
has to be understood in a community and management context
in order to be mastered. What are the benefits and pitfalls? Can
counseling and selling goods exist side by side? Can tenants be
organized around operating business? Can staging popular Broadway
productions underwrite experimental theater? Can revenue generation
be conceived in a manner that strengthens membership, commitment,
community benefit, or other mission rationale? If the answer
is yes, how can this challenge be addressed at a practical level?
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Center for Neighborhood
Technology, Chicago - Illinois
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