Living and Giving

Social Entrepreneurs: What\’s In a Revenue Stream?

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For any social entrepreneur, I\’d like to address the distinction between funding sources and revenue streams. I have a pretty high standard on what I call a revenue stream. As social entrepreneurs, especially if you are nonprofit, we can demand the same high standards as for-profits. If a new for-profit venture got off the ground, they would identify start-up capital (funding) and sales from product/service (revenue). They wouldn\’t count #1 as a revenue stream. It\’s support, but not revenue, even though both are, indeed, valuable financial resources.

As an investor, I would want to know that you are thinking about your social business/or nonprofit in these terms. I know then you have the foresight to realize you need both, and, that you will not always rely on funding/donations. That\’s exactly what for-profits must do: They have to get off the vc and angel funding, and eventually, stand on their own two legs, 100%.

That doesn\’t mean we can\’t still fundraise or hold future venture rounds to support our organization, planning and goals. With UniversalGiving, I plan to always have this investment in place; it\’s just that our eventual goal is 100% support of our operations from revenue.  Funding can then help scale the UniversalGiving service further (ie expand into more international markets, adopt more NGO partners in a certain region, attain more corporate clients, institute more robust marketing plans.)  Of course, surplus revenue can do that as well.

Revenue reigns in operating your current service; funding furthers continued expansion.  Both are needed and diverse financial channels, which build your social entrepreneurship organization for the longterm.