How To Generate Earned Income For Your Nonprofit


1. What is an earned income stream and why is it important?

Earned income is a second source of income for your  nonprofit or ministry. Earned income flows from a fee for services. Examples can include tuition, childcare, sports league fees or facility rental fees. By supplementing donative income with an earned income stream, nonprofits can better navigate economic disruptions. When earned income sources are married up with your mission, it reinforces your cause and contributes to the outcomes of your mission. The more creative and cause-driven your earned income can be, the more financially stable your nonprofit will be. 


As a leader incorporating your faith into your work, it’s given that you’ll ask God to provide you with resources to live out your mission. And God does provide. We believe the resources you need to launch your venture are already in your community. Leaders need to determine what resources they need to accomplish their mission but also what resources are already available. What we often see is that earned income correlates to the resources already in place.

FiveTwo’s StartNew training helps nonprofit leaders build, fund and launch their ideas into their community. Leaders and teams use the StartNew Canvas to determine what resources they need and how to leverage resources they already have. 

2. “That won’t work for me”

So what do we say when we hear “That won’t work for me”? It’s a tendency of some nonprofits, especially those working with impoverished communities, to say “they have no money, I can’t charge for services” when thinking about their audience. But we would reinforce that in our consumer-driven society, people will pay for things they value. In fact, assuming they won’t is a denigrating mindset, because it’s almost like treating them as another class of people that can’t pay like others do..

Our StartNew training equips sacred starters to determine what their customers value and what their needs are. Then they’re equipped to generate creative solutions for an earned income stream. 

Check out this article for more creative solutions to fund your nonprofit or ministry. 

3. How To Minimize Your Risks

  1. Test Your Idea – We wouldn’t recommend an organization to jump head first into a new business model without first testing the idea. FiveTwo’s process (link) includes testing your value proposition to ensure what you are offering is truly what the customer wants. 
  1. Get Your Board Involved – After you’ve tested an idea, make sure you get buy-in from your Board of  Directors. Your Board can help you decide what level of risk you should actually take depending on your financial situation and your idea. 
  1. Give It Time – If you’re looking for overnight success, we’d probably tell you “this isn’t for you”. We recommend a time frame of at least six months to a year. We would also suggest looking at more than just dollas as indicators of success. Tracking engagement is another way to know you’re offering something your customer wants. Your Board can also help you determine what kind of timeframe is reasonable considering your financial situation and risks. But ultimately ​you as the leader must be convinced this is the direction you need to go.

Want to talk through what an earned income would look like for your organization? Schedule a free coaching call and connect one on one with Bill to discuss how FiveTwo’s process can work for you. 


If you want to learn more about building, funding, and launching your venture, check out our StartNew Course. Throughout the self-paced training, you’ll hear from our StartNew founder, Bill Woolsey, and other seasoned leaders on the power of collaborations, how to fundraise for your venture, and how to plan your launch steps. 


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