The number one question I am asked repeatedly is ‘how do I get un-restricted income’ for growth, innovation, things donors don’t like to pay for or just for breathing space. Even a little un-restricted income can be a game-changer for building organisational flexibility, resilience and sustainability. There are 4 key sources of unrestricted income:

  • Core funding:  

The ‘unicorn’ donor everyone wants to partner with is the one who will contribute towards your organisation without specifying how the money must be spent. This donor doesn’t directly build sustainability, but it does allow valuable flexibility to cover those mission critical support functions.

  • Passive income:

Everyone’s dream is to earn while you sleep, and you can do that if you maximise the income your money is generating through interest and dividends.

  • Leveraging assets:

A quick win is to package the intellectual & physical property that the organisation has built in such a way that you can rent it, license it or sell it to a paying market outside of your beneficiary or donor circle.

  • Business arm:

Creating a product or service that is sold to the public or a specific market is a profitable means of generating income for the organisation if you have someone on your team with a sales or business background.

As with all things in an NPO, you should have a clear strategy for un-restricted income: how to generate it and how you plan to use it. Having extra cash available frequently results in a culture of irresponsible spending. The money is absorbed in the every-day and nothing strategic is achieved. The goal is to cover all your costs with donor funding so that any ‘extra’ income can be set aside to build your reserves or poured into initiatives that set you up for additional un-restricted income.

So get creative and immediately start saving for a rainy day! Let me know if you’d like some input on setting up any of these ideas.