This blog was written by Stephanie Jacobs from Thriving Nonprofits. Stephanie Jacobs is an experienced nonprofit leader, having previously worked as an Executive Director and Board Director, as well as in communications, program development, and community education. As the Thriving Non-Profits Program Coordinator, Stephanie works closely with nonprofit leaders to critically assess their revenue models, identify entrepreneurial opportunities for growth, and develop practical strategies for revenue diversification and long-term organizational resilience.
If you’re interested in learning more about the possibilities of Nonprofit Revenue Diversification, check out this webinar on the same topic from Kristi Rivait from the Thriving Nonprofits team.
Nonprofit Revenue Diversification: What’s Possible?
The nonprofit and charitable sector is powerful. It employs millions of people, contributes greatly to Canada’s GDP, and delivers essential services to communities across the country. Every day, organizations respond to crises, protect ecosystems, support culture, and take care of us, building the types of communities we want to be part of. I can’t imagine, nor do I want to, where our world would be right now without the dedication of the people driving the nonprofit sector.
And yet, so much of this work happens under the constant pressures of resource scarcity.
Nonprofit leaders are asked to do more with less, navigate uncertainty, and stretch limited dollars ever further. Funding is often short-term, restricted, and unpredictable. This gap between the importance of the work and the resources available to sustain it is a systemic failure, and organizations, and the communities they serve, pay the price. At Thriving Non-Profits we are working to build a stronger, more resilient, social change sector – and revenue diversification is one way organizations can respond.
Why Revenue Diversification Matters
Revenue diversification is about building resilience. It is about shifting the narrative of scarcity and sacrifice that can overwhelm our day-to-day working to advance our mission. When an organization relies heavily on one or two funding sources, it becomes vulnerable to shifts in policy, funder priorities, or economic conditions that are outside its control. It also often means just surviving, in that annual grant and donor cycle, where we spend half our time searching for funds when we could be doing the work.
Diversifying revenue can increase stability, flexibility, and decision-making power. It can reduce stress on staff and boards. It can also create space to plan, invest, and focus on impact rather than constantly reacting to funding pressures.
The Honeycomb Approach
At Thriving Non-Profits, we talk about revenue diversification using a honeycomb model. It provides a visual to see all of the options for revenue that a nonprofit or charity can attract or develop. We look at building a mix of different, but aligned revenue streams, over time, growing earned revenue initiatives and building assets, alongside traditional philanthropic revenue. Each cell in the honeycomb represents a different source of revenue. Some grow slowly, others more quickly. Together, they create a structure that is stronger and more resilient than any single stream on its own.
Revenue Diversification Options: From Traditional to Entrepreneurial
Revenue diversification looks different for every organization, shaped by mission, values, community, capacity, and risk tolerance. While the mix will be unique, most nonprofit revenue strategies fall into the categories outlined in the honeycomb. Below is a brief overview of each of the options that you can consider.
Traditional Funding: Grants, Donations, Events, and Government Contracts
These familiar sources remain essential, and an entrepreneurial approach focuses on alignment, relationship-building, and understanding risk, and return on investment, rather than over-reliance or constant chasing.
Fee for Service
Charging for programs, services, or expertise can create earned revenue while ensuring programs remain accessible. Designing earned revenue using tools like sliding scales, tiered pricing, subsidies, or third-party payers, amongst others, opens opportunities for earned revenue while protecting access and values. This is often where we come up against limiting beliefs and the scarcity mindset of “this is always the way it has been done”.
Social Enterprise
Mission-aligned businesses, whether embedded within the organization or structured separately, can generate unrestricted revenue at market rates, while directly advancing social or environmental outcomes.
Assets
A broader view of assets includes not just cash, but space, equipment, staff skills, intellectual property, networks, and brand, all of which can be leveraged to support long-term financial health.
Partnerships
Values-aligned partnerships with businesses, institutions, or other nonprofits can unlock new revenue, reach, and capacity when structured as true win-win relationships.
Leverage
Strategically aligning how you hire, purchase, bank, invest, and operate can amplify both impact and financial resilience without creating entirely new programs.
How to Get Started
A strong place to begin is by reviewing your current state. Where does your revenue come from today? Which sources feel stable, and which feel risky? Where do you already have strengths, assets, or opportunities that are under-leveraged?
From there, focus on understanding both your risks and your possibilities. Assess your capacity, your entrepreneurial spirit, your governance and leadership, and begin to think strategically about where you could strengthen, grow, or add a revenue stream to your organization.
You Do Not Have to Do This Alone
Revenue diversification can feel daunting, especially in a sector already stretched thin. Learning alongside peers, getting external perspective, or working with values-aligned support can make the work more manageable and more effective.
If you want to explore what revenue diversification could look like for your organization, or learn more about how to get started, please reach out. There is more possible than many nonprofit leaders have been led to believe.
Curious to learn more? Visit www.thrivingnonrprofits.ca to access courses, resources, and expert support to build your nonprofit’s financial resilience.