Podcast episode transcript ↓
Josh:
What if the funding your nonprofit relies on suddenly disappears?
Too many organizations face this risk by depending on a single revenue source.
Diversifying revenue streams not only safeguards financial stability but also opens the door to growth and innovation.
So, what are the best ways to expand and balance revenue streams while staying mission-focused?
And how can nonprofits successfully expand their funding mix without stretching themselves too thin?
I’m Josh with Anedot, and welcome to Nonprofit Pulse where we explore trends, insights, and resources that help nonprofits accomplish their mission.
On this episode, we are joined by Ciara Byrne on the topic of building diverse revenue streams to increase sustainability.
Ciara is the founder of Green Our Planet, an organization dedicated to environmental conservation and community empowerment through STEM education.
She has led one of the largest school garden and hydroponics programs in the U.S., impacting over 250,000 students across 37 states.
Before founding Green Our Planet, Ciara produced hundreds of films for major networks, including PBS, National Geographic, Discovery Channel, BBC, Fox, and E!
Now, she applies her storytelling expertise to drive awareness and inspire change. Hi Ciara, thanks for joining us on Nonprofit Pulse.
Ciara:
Hi Josh, so excited to be here.
Why nonprofits must diversify funding to ensure long-term sustainability
Josh:
Yeah, excited for our topic. Today we're going to be talking about the value or the power of diversifying your revenue, in order to better or improve your sustainability.
And as a nonprofit that is huge and so important. So, super excited to talk about this topic with you today.
So, yeah, maybe starting off, why do you see it as important?
I know it's kind of a basic question, but I want to hear from you. Why is it important that nonprofits avoid relying on a single source of funding?
And how can that diversification really help ensure long term sustainability?
A lot of nonprofits have that funding from a major donor. Maybe they have a foundation who comes in early and provides that.
They really struggle to diversify the revenue. They struggle to do things like small dollar campaigns or even getting foundation giving.
So just a kind of a basic question, but would love to get your feedback on that.
Ciara:
Oh, yes. I think this has got to be the central question for every CEO and executive director of a nonprofit.
How do you build a revenue streams that you can create a really sustainable organization?
And you know, for me, my background is actually I'm a filmmaker by background. I ran a film production company for many years, and so I was working in the for profit space.
So, we created films. We got paid by Discovery Channel or BBC or whoever we were making the film for, and that's how we operated, right?
And so many years later, when I started Green Our Planet with Kim MacQuarrie in 2013 and I got into the nonprofit space, I must say it was a bit of a shock, because what I saw was that in our case, we were creating, STEM school garden and hydroponics laboratories in schools, which is a great service for schools.
But there wasn't a real, like, business model per se. A lot of schools couldn't afford them. They wanted them. And so we had to figure out, okay, how do we raise the money to make this happen?
We have a massive desire for it. And we have all these schools in our waiting list. And so initially we were mostly funded by corporations.
Like corporations say, oh, I'm going to sponsor this school and I'm going to sponsor that school.
And, you know, that worked for a while.
But once we got above like 50, 60 schools and we started heading towards 100, and then we have a bigger team and we have this team of like, ten farmers taking care of the gardens here in Las Vegas.
And, I was like, this is not enough money for what we're trying to accomplish here.
So then we started looking at, well, what are the other revenue streams that we can look at? And that's when we started looking at state funding, grant funding.
You know, host of other like small dollar campaigns like you mentioned.
And I think the most interesting move we've made is quite recently, and we're heading into the actual like, business model, like having a business space, meaning that we're actually now for the first time this year, we're actually selling our program to schools that can afford it.
So we've got a team, a marketing team, a sales team who are finding those schools. And the other piece of that is we're also selling our program to corporations.
We're bringing our hydroponics programs into corporations. So that's kind of our journey in a nutshell, but I'm happy to dive into it a bit more deeply if that will be helpful.
Lessons learned from diversifying revenue by monetizing skills
Josh:
That's an interesting path that you have gone down with the selling of that product, because a lot of folks are really confused around, like, how do we sell things?
Wait, we're a nonprofit or how does revenue play into this? I thought we really should lean only on donations, but there can be this passing of value through programs, products as well.
So, what are some of the lessons that y’all have learned? And then the benefits through diversifying your revenue through that?
Ciara:
Yeah, I mean, that's a great question, Josh. So what I would say is this.
What I'm seeing is that there's definitely a shift in philanthropy.
We are seeing more and more foundations and even grant opportunities where there is a request that you have, it can be 20, 30, 40, up to even 50% of your revenue from a business model, meaning that in some way you're able to show this foundation or the state or whoever you're applying for that you have this other revenue stream coming in that is, it's a business revenue stream coming in.
And so I think honestly, like when you consider if you want to, especially if you want to scale your program, which we've done.
So we've grown from in 2013, we were in ten schools in Las Vegas. We're now in over 1,200 schools across the country in 43 states. Inviting over 500,000 students.
I mean, if you want that kind of growth, I don't believe personally that you can simply rely on a couple of foundations or just a state, you know what I mean?
You really need to have multiple revenue streams. You know, we have a big team. We've got 37 people on our team. And, our growth is our goal.
This upcoming year, we're hoping to be in 1,500 schools. So in order to do that, we took a hard look at what are we offering? What are we offering to schools? What is our expertise?
And what we realized is that we're connecting people to the planet through growing food. And then actually, you know what, there might be a way that we could get paid for that, not just giving schools the grants.
And so when we looked at the marketplace, we realized, well, actually, there are some schools willing and had the money to pay for it.
So that was one market. And the other market was, to our surprise, corporations were also willing and wanted to bring in hydroponic systems.
And these lunch and learns online, where we connect with the employees and we show them how to grow the food hydroponically and then they harvest it and all that stuff they have mocktail hour and all fun things at work.
So it kind of connects people together. But we're also creating a wellness program.
I would encourage every nonprofit to look at what their expertise is and see if there's a way of monetizing it.
Because I can think of like, if you're doing a leadership program in schools, well, what if you also offered your leadership program to corporations?
You know what I'm saying? So I think there are often ways that nonprofits can actually monetize their skills in ways that will really help the organization grow and become more sustainable.
Common pitfalls in revenue diversification and how to overcome them
Josh:
I love that, and thinking of the challenges involved and the pitfalls involved.
For those who are listening now, who are thinking, okay, 2025, this is our year of at least taking the next step in diversifying our revenue.
And this sounds very interesting to them. What are some common pitfalls that you would warn them about when even just starting out?
So having the discussion at the next board meeting, to actually implementing and setting goals, what are some areas that you could share there as far as common pitfalls?
Ciara:
For us, the board was on board immediately, but the way we presented it was that this was an opportunity, right?
And if we went down this road, we'd be able to increase our revenue to such a capacity that we were going to be able to increase our impact significantly in schools and become a more sustainable organization.
So it was a no brainer.
Our board was like, yeah, yeah, yeah, yeah, let's do it. I will say where I think, I didn't do as good a job was with our team, and I think it was around how I presented what we were doing.
And I'm still sort of in the middle of trying to explain to the team why we're doing this.
I feel like some of the team feel like we are sacrificing our mission, which we're not, but they feel that, oh my god, we're becoming this for profit company, and we're asking schools for money.
Like, I really should have presented the story in a better way or the team would really understand what we were trying to achieve.
I don't think I did a good job with that.
Josh:
It was on my mind at the beginning of the question when I was thinking about kind of scenarios that leaders could run into and in pursuing this path, but also in other paths.
And one of them is just culture, philosophy of mission. And those are hard chips to turn, right?
Those can take months, even years, depending on the age of your organization and how deeply rooted the culture is.
Yeah. What would you do next time? If you were rolling this out to your staff? Knowing now what you didn't know then?
Ciara:
Yes. So what I am doing now is, I have a state of the company address next week, and what I want to show the team is how much more impactful we're going to be.
So while we continue to serve schools and schools that don't have money will now have access to an even bigger pot of money, right, because we're working with corporations and so on.
And that we're not sacrificing our mission, but we're going to be able to make a greater impact and showing them that in a more granular way.
I think I spoke too high level and I didn't really get into the nitty gritty. I mean, in our case, I'll give you one example.
So, we obviously, you know, connecting kids to school gardens and they're learning STEM. They're also learning nutrition. And what we have found is that a lot of parents are the ones buying the food.
They're not getting the nutrition education. And so we've always on our team talked about, well, we're educating the kids. They're not buying the food.
How do we reach the parents? Well, now we're reaching the parents through the government agencies we're working in and the corporations.
So now we're creating more of the community wide impact with our program, which is, this program is now resonating throughout a community, and it's just going to improve health, educational outcomes, all of it.
I think showing the team that is very important. And I'm going to do a better job. But yeah, I would say being very clear on why you're doing it.
Josh:
The programs were for this particular group, however organically, it grew into the parents and then by extension, the community.
And that was all brought on by maybe something that was a bit uncomfortable for people and if they could have seen kind of ahead of time that no, no, no, this is going to increase our impact, which is ultimately the highest value thing we can do is increase impact.
Ciara:
Yeah, 100%. And I also think it's kind of scary in a way to be a nonprofit these days.
Like, for example, in 2020 when COVID hit, we had all of our, well we had different foundations and corporations funding us at that time, but they all shifted their funding pretty much immediately.
Like within a month, we lost half of our budget for the year.
And that was the moment where I said to Kim, our co-founder, I was like, okay, this is bananas.
We're doing a great job. Like we're providing the service. We're getting really good feedback. But you know what?
We still, it's not like, I'm providing a great service so they're going to continue paying. This is where the donors get to shift their money because of something that happens in the environment.
You know, like COVID. And I totally understand why they did it, by the way.
But that was the moment where I realized, okay, we have to create more revenue streams.
How small and new nonprofits can explore alternative revenue sources
Josh:
What would you say to smaller or even newer nonprofits who are wanting to take a next step in diversifying their revenue?
But they're concerned about overextending their capacity.
Capacity is a huge topic in nonprofit life. And a lot of things don’t get started or don’t get explored just off of the fear of we don’t have the capacity for this.
We don't. And that could be at any level. So that could be at the board. It could be at the senior leadership. It could be in your volunteer base, right?
So what would you say to those smaller or newer orgs who are concerned about capacity?
Ciara:
I think it's a great question to ask, and this is what I would say. I'll give an example because I think that's always helpful.
So we decided in 2017 for the first time that we were going to really pursue state revenue from the state of Nevada.
And I'll be honest with you, apart from the bill on Capitol Hill, that was about all I knew about how legislation got passed.
So I realized, okay, this could be great for the state. And we're like in about 400 schools right now across Nevada, which is more than half of all the schools.
I realized that we needed to do this, but I didn't have the capacity. I didn't have the funding at the time to hire a lobbyist.
So what I did was I asked some different lobbying firms, would they donate their time and help us craft a bill and help us find a senator or an assembly person to take on the bill to be the sponsor and then to see it through the legislative session.
And like I had multiple yes’s. And I think what I learned was that and this I'm guessing is the same in other states, is that most lobbying firms are getting paid to do things they don't really maybe not believe in or a little bit scurrilous around the edges.
So being able to also speak up to a school garden bill make them look good, right?
And so I was like, oh, fantastic. And that, and I remember going to the legislative session and I testified and did all the pitches and the speeches and stuff.
And I remember the CEO of a bank, who was one of our big supporters, John Guedry, and remember him saying, listen, you're not going to get the first bill passed.
I've been trying for six years to help the school district get this passed or that passed and we got it passed first time.
So anyway, so that's what I'll say. I'll say is there probably is some people out there who want to help you.
It's going to serve them. Like, make no mistake. It's going to serve them in some way.
But that is a great, a great place to start. So if you're looking for state funding.
Balancing traditional fundraising with innovative revenue strategies
Josh:
Yeah. Just thinking of how you can get those man hours to happen outside of your organization. That sounds wise to me and super efficient.
Awesome. Okay, so starting to kind of shift the conversation and thinking about what is an ideal balance of revenue streams?
That's a big question. I'm sure there's a lot of nuance and depends on what programs you're offering and kind of the makeup of your board.
And how have you done, how have you received revenue in the past?
But I just want to get your take on how would you advise nonprofits to really even begin to think about how they should be balancing their revenue streams, and doing so in a sustainable way?
Ciara:
Yes. So, well, our goal is we are looking right now this year to have 15% of our revenue for the first time from sale.
So that's like selling to schools, selling into corporations. And we're on track to hit that.
That's 15%. Ultimately, our goal is to have 50% of our revenue from the sales, like from the business side of things, from selling.
And then the other 50% is a mix of state funding, grants, corporate sponsorships and so on and so forth.
You’re right, though. I mean, it's hard, like every nonprofit is different. So depending on what services you're providing, there could be very, very strong state funding.
If you're in the area of like food insecurity or, homelessness, there often is a lot of state dollars to help with that.
So, you know, education can be a bit trickier, because schools are getting funded but not necessarily programs like ours.
I would say that I strongly advocate to every nonprofit to figure out some kind of business model. I really do, because, the next COVID is around the corner, whatever that is going to be.
Or this change in administration like we have now, like it sounds like there could be a lot of changes, right, in this administration as to who's getting funded and who's not.
And if you're getting a lot of money from the state, that could be a scary time.
Josh:
Yeah. And even just headwinds or changing dynamics with foundations and how they spend and how they value certain social impact topics and areas.
So it definitely seems wise to not have maybe more than 50% in one area, depending on your situation and again, it comes to mind of so many nonprofits, they do incredibly well in one area of revenue, whether that's small dollar, just donor funded revenue, or it's on the other side.
And they have really strong revenue with foundations or with state partners, but they struggle to ever get those first donors or maintain donors.
And I think the big principle here for this conversation is don't do that.
Diversify. Think of ways that you can add value that’s still culturally aligned with your organization, missionally aligned with your organization.
But that can help you fight any headwinds, whether that's a changing federal administration or, just kind of changes in the way foundations are giving money, etc.
It's a bad situation to be in when you're funding your organization, your operations through 1 or 2 revenue areas.
Ciara:
Yeah, 100%. I mean, if you look at Goodwill, for example.
So they're one of the, if not the most successful nonprofit in the United States and have been for, I don't think they're around 100 years or whatever.
Look at their model. It's fascinating, right? They're literally a business, right?
The Goodwill stores that bring in the profit to run the classes and the trainings and all the workforce development, and then they actually place people in the stores.
Right? So I think that's a really, really solid model. And it stood the test of time.
I think looking at that like, how do you solve homelessness in an interesting way where you're able to create a revenue stream like that?
Key metrics to measure the success of your nonprofit’s revenue strategy
Josh:
So thinking of measuring the impact, Ciara, what areas should be measured when it comes to revenue streams, comes to even deeper than that, like different corporate partnerships or state funding, grants, donors.
What do y'all track as far as key performance indicators?
And what's really been helpful to kind of show you the success beyond maybe just the percentage amount, you mentioned 15% coming from sales right now, what are some of the other areas that y'all track as well?
Ciara:
We basically have two revenue teams, and one of them is called the sales team.
They are doing like what I said, they're running the business model.
And then on the other side, we have what we call the strategic revenue team.
So when we go into a new market, so for example, we're moving in together into Utah, right?
We have the sales team, we have the strategic revenue team. And so what we do is we have the strategic revenue team looking at how much money do we think we can get from grants in this market?
So they do the research and they figure out what kind of foundations are there, what kind of funding mechanisms.
We have our government affairs start working with the state, and then we have the salespeople working with the corporations. And so it's a very comprehensive kind of integrated move into a state.
So when you say what we're measuring, we're measuring what the market size is in all of those areas, the grants, the state funding for education and then the corporate around wellness and community engagement.
So we look at that and we figure out, oh, we think we could get X percent of that pie, and this is what we're going after.
And so that's what we start tracking then. So we set our target whatever it is for that state. And yeah. And then we take it from there.
Josh:
In setting goals for the rollout of your product, how did y’all navigate that, especially since it was new to the organization.
I'm assuming it also had new staff involved as well. How did you navigate that?
Because that's another big topic that I'm curious about of, okay, let's say someone does monetize their services or programs or products?
I don't think there's going to be a lot of muscle memory or knowledge around, okay, but how do we measure that and how do we set goals? How do we inspire people to hit those goals?
Ciara:
Essentially, we guess. I mean, that’s the truth, right? Until you have a track record, you can't really foresee what you think you might.
I mean, obviously we have a very strong presence in the Nevada market in all of these different areas. And so we're kind of using that as our model.
But I will say that moving into these different states, how the funding models work actually is quite different because in certain states, let's say, for example, California, there is massive amounts of money for greening schools that doesn't exist in Utah and Nevada.
So that's something that we can target. You know what I'm saying?
While, in Utah, there's quite a big appetite for corporate partnership and wellness, so because they have a huge, health and wellness industry, actually, in Salt Lake City.
So anyway, so it's really understanding each market and then guesstimating using how we've been successful in Nevada.
And then we'll see, right? So this is new this year. We just started it. So, so far so good, I will say. I wouldn't say our projections are accurate, but we're making headway.
Ethical considerations for nonprofits diversifying their funding sources
Josh:
So thinking about ethical or reputational risks involved with diversifying your revenue, a scenario would be, there's a nonprofit, it's been operating for ten years and has grown significantly, but their funding is still from a handful of foundation grants, maybe a few high net worth individual donors.
And they want to, get more involved with corporations.
How would you advise nonprofit leaders when trying to measure that ethical or reputational risk when approaching businesses or even businesses that are approaching them and saying, hey, we want to be a part of this.
Ciara:
And by reputational risk, you mean that it looks like they're becoming for profit or.
Josh:
Reputational risk in the sense of, how that corporation’s own reputation may bleed over into your organization.
Ciara:
Oh, I see what you mean. Okay. Yeah.
Josh:
So with with health, for instance, you know, I imagine there's corporations out there that y’all would not partner with just because of their own stance or products, etc. on health that is at odds with yours.
Ciara:
Unlikely, we'll be partnering with a cigarette company.
Josh:
Yes. Philip Morris. That's right. It's not getting a partnership.
Ciara:
Yes. So I guess you have to discuss that with your board. I mean, we have had offers from mining companies, for example, that we've turned down because we're Green Our Planet.
And so, obviously, and I doubt that we would work with an oil company, cigarette company, and so on and so forth.
So, I mean, but I think having clear guidelines for that means that you can sort of quickly say no and not be stumbling around trying to figure out when the opportunity comes up.
Josh:
Yeah, I think that's that's super helpful to think about is if you are wanting to partner with other organizations, whether nonprofit or, corporate for profit is go ahead and have a decision matrix kind of in place there.
Go ahead and have some some guidelines.
Because I can imagine if 12, 16, 18 months after pursuing a new revenue opportunity, someone who kind of fits your culture and kind of fits your values comes and says, hey, we really want to fund this.
Josh:
Well, that would be a much more difficult decision without having that conversation back 12, 16, 18 months ago about who are we willing to partner with?
Ciara:
Yeah, no, that's true. I mean, I think it is a very complicated subject.
And I say that because, I mean, you could partner with an organization that seems fine or looks fine, but then when you look underneath the hood, there could be some squirrely things going, right?
You know what I mean? Associations or, I don't know, just things that are not in alignment with the values of the nonprofit, that's for sure.
So I think it's a complex area.
And I think about things like, for example, I don't think a lot of people know that the Walton family who own Walmart are like massive donors, if not the largest donors to conservation in the world, and they conserve this massive area of the ocean out in the Coral Triangle, out on the South Seas.
And it's a multibillion dollar project. Now, I don't think many people know that, you know what I'm saying?
But if you saw I mean, they're not one of our sponsors, but they could be. But what I'm saying is. But that might not look that great.
Why the hell is Green Our Planet working with Walmart? Well, actually.
Josh:
Here's why. Right. Yeah, yeah. And then having to make that decision internally of like do we want to have to explain it right?
Or do we want to have it more be on the nose, more obvious about why we're partnering with this corporate entity?
Ciara:
Yeah. But there's obviously for us there's some obvious no’s, like I said, like oil companies that would be going against everything we believe in.
Josh:
Which are increasingly wanting to partner with more green centered nonprofits, interestingly.
And I don't know if that's a reputational kind of whitewashing that's going on there or if that's a true, honest effort to give back and to kind of balance their own impact. But it is interesting.
Ciara:
Yeah, I know that that is. And listen, I think they should.
I don't think it would make sense for us to partner with them, but I think there are other green nonprofits they should partner with, buying up land to protect it, Conservation International or, you know.
Closing thoughts
Josh:
All right, last question, my favorite question of every episode.
If you were standing on stage in front of 1,000 nonprofit leaders and could share one thing with them, one sentence, about diversifying your revenue streams, what would you say?
Ciara:
Be creative, be optimistic, and be kind to yourself as you go down that route.
Josh:
Awesome, awesome. Ciara, thanks so much for joining us on the podcast.
It's been a great conversation. I would have loved to go another 30 minutes and maybe in the future we can have you back.
And grab some more wisdom from you, especially as you continue to walk out this road that you're on. And just congratulations on all the success too. Y'all are having a huge impact.
So encouraged to hear all the schools and the multiple states. That is awesome. And best of luck to you and we'll talk soon.
Ciara:
Awesome. Thank you so much, Josh.
Josh:
Hey, thanks for listening.
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