Quick recap if this topic is new to you!
Earned income means generating revenue by selling a product or service that aligns with your mission. Think CPR classes from the Red Cross or selling pet supplies at an animal rescue. It’s a sustainable way to fund your work without relying solely on donations or grants, and it gives you more control over your financial future.
Here are 4 things to consider when brainstorming earned income ideas:
1. Mission Alignment 🤝
Your earned income idea should directly further your mission. It’s not just about making money, it’s about extending your impact.
Take the American Red Cross, for example. They charge a reasonable fee for CPR and first aid training, which perfectly aligns with their mission of emergency preparedness and disaster response. The fees they collect don’t just keep the lights on. They help train people to save lives, which is their core mission.
But not every idea will fit as neatly. Selling unrelated products, like random T-shirts with funny phrases for an animal rescue, might generate a few bucks, but it risks being classified as “unrelated business income” by the IRS. That means you could end up paying taxes on those sales if they’re too far removed from your mission.
💡Try this: Make a quick list of 2-3 potential earned income ideas that directly further your mission. If it feels like a stretch, it probably is.
2. Market Demand and Financial Feasibility 💸
Even the best mission-aligned idea can fall flat if there’s no market for it. Just like you’d have to do if you were starting a business – Make sure there’s demand for what you’re offering and that it makes financial sense.
Ask yourself:
- Is this something people actually want or need?
- Are they willing to pay for it?
- Can you price it fairly while still covering costs?
For example, an arts nonprofit might consider offering paid art classes. This is a great idea, but only if the community is actually interested in and willing to pay for those classes.
💡Try this: Run a quick survey or poll to see if your community would pay for the service or product you’re considering (especially to support your mission!). It’s a small investment for potentially big insights.
3. Organizational Capacity and Risk Management ✅
Once you’ve got a solid, mission-aligned idea with real demand, it’s time to check your organization’s capacity. Consider:
- Do you have the right staff and skills to deliver this product or service?
- Do you have the budget for upfront costs, like equipment or marketing?
- Can you handle the ongoing work needed to keep this revenue stream profitable?
Don’t forget to assess the risks. The pandemic, for example, hit nonprofits that relied on renting event spaces hard. If your earned income idea is vulnerable to economic shifts, think about how you’ll handle that.
💡Try this: List the resources and skills you’d need to launch your idea. If you’re short on any of them, make a plan to fill the gaps.
4. Stakeholder Impact and Measuring Success 📊
Think about how your earned income idea will affect your broader community.
If you’re a tutoring nonprofit and you start charging for after-school programs, will that exclude the students you most want to serve? Make sure your earned income plan doesn’t accidentally push out the very people you’re trying to help.
Once you’re up and running, you’ll need a way to measure success. That means tracking not just revenue, but also mission impact. How many people are you reaching or serving because of this new income stream? Are you financially better off?
💡Try this: Start simple by using a Google Sheet or a free tool like
Asana to track your income, expenses, and mission impact. Schedule regular check-ins with your board or team to review progress and adjust as needed.
Try It This Week! 🚀
Pick one potential earned income idea that aligns with your mission. Sketch out a quick pros and cons list for the considerations above. Still not sure if it’s worth pursuing? Check out Part 1 of my two-part YouTube series for more insights and practical tips!
Have you tried an earned income strategy?
Hit reply and let me know how it went. I’d love to hear your story!
