Stop Chasing Revenue. Learn to ATTRACT it Instead.

Intro

Is your social impact brand attracting enough revenue to power your mission and build a healthy, sustainable organization? Or do you feel like you’re constantly chasing donors and customers just to keep the lights on?

Chances are, the second scenario hits closer to home. If so, you’re not alone. Because the social impact sector has a revenue problem. And it’s not a small one.

I’m not just talking about donor retention, or shifting consumer behaviors, or downward trends in giving and support for social impact causes either. I’m talking about deeply rooted cultural beliefs and narratives that have shaped our entire sector. And that many of us have just learned to accept as inevitable.

Folks, we can’t keep going like this. We have to stop accepting that a lack of revenue and resources are just “part of the job” in the social impact space.

But changing the norms and culture of the entire sector takes time and energy. And kudos to the good people out there fighting that fight. But you’ve got to fund next year’s budget, and you don’t have time to wait for the culture at large to shift in your favor. You’ve got to find a way to make things work today.

Because growing revenue for your organization isn’t optional. You have to secure the funding and resources you need to truly scale your mission. To attract and retain talented team members. To compensate them fairly and competitively. To cover your overhead and reinvest in your organizational growth and development.

And in today’s episode, we’re going to outline a new way to think about revenue generation for your social impact mission. An approach that can fundamentally scale your growth and revenue so that you can build a truly sustainable organization.

And this approach works whether you’re a small nonprofit just getting started, or a social enterprise with a market-based model, or an established organization that’s struggling to break through a stubborn revenue ceiling.

It’s also an approach that won’t require you to restructure your existing revenue generation strategies. Because this approach is a foundational strategy and mindset shift. Not shortcuts and tactics that might lead to short term revenue growth, but then puts you right back in this same unsustainable scenario that you find yourself in over and over again.

Instead, you’ll learn how to create the right conditions required to attract revenue like a magnet.

In today’s episode, we cover:

The cultural beliefs and narratives that have created unhealthy and unsustainable norms that are holding our sector back
Why so many social impact organizations struggle to attract, grow, and retain revenue for their missions
And how you can create the conditions for revenue generation that can lead to the growth you need to truly power your mission and build a sustainable, resilient organization

Let’s get to it.

Part 1: Beliefs and Narratives Leading to Unsustainable Revenue in the Social Impact Sector

Why have we come to accept that our sector operates with a lack of resources and revenue?

Nearly two-thirds of social impact organizations are unable to provide competitive salaries for their team. Nearly half of social impact professionals are burnt out. The main reasons cited for this are a lack of resources, and too high of workload. This is leading to job vacancies that are 10% higher than that average in the broader market. And nearly two thirds of social impact professionals who are actively seeking or open to new opportunities are exploring roles outside of the social impact sector.

Stop and really think about this for a minute. Why should we accept that this is just the way it is?

The social impact sector is treated like a “second class citizen” to the corporate sector, and it’s holding us back in more ways than we realize.

We’re expected to make personal sacrifices to dedicate our career to social impact work. Our work is over scrutinized compared to our profit-driven peers. We’re expected to do more, with less. We work on the world’s most difficult, intractable problems and then people don’t understand why we can’t solve them immediately.

So it’s no surprise that we’re seeing burnout, a mass exodus from the space, and trust and giving in decline.

These issues stem from a deeper cultural belief that if you want to dedicate your work and your life to creating social change, you’re going to have to make sacrifices and tradeoffs to do so. And the fact is, for many of us, this is 100% true.

But this is a self-fulfilling prophecy. Because when we as a sector accept these beliefs, we knowingly or unknowingly perpetuate them through our actions. And perpetuating these actions helps reinforce these beliefs and norms. And the cycle repeats itself.

And if you’re not generating the revenue that you need to run a truly successful business, then you might even have to make some of these trade offs yourself.

As a sector, we need to challenge these narratives and beliefs. We need to be bold enough to say, no, this is not okay and we cannot solve the world’s greatest problems if we don’t have the proper resources to do so.

A quick story to illustrate this point.

Recently I saw a post from an executive director celebrating receiving a $2m gift from MacKenzie Scott.

If you’re not familiar with MacKenzie Scott, the cliffs notes version is that she’s invested close to $18billion dollars across over 2,300 nonprofits, all unrestricted gifts. For most nonprofits, it’s the largest single unrestricted gift their organization has ever received.

Anyway, back to the story about the executive director. They were rightfully excited about the opportunity and the ability to reinvest the funds into building a more sustainable and resilient organization with this surprise influx of cash.

But then they also celebrated that it meant all other donors could rest easy knowing their donations would go directly to program work instead of overhead.

We have to stop perpetuating this cultural narrative of overhead vs. program work, as if they are not both equally necessary to building resilient, sustainable, and effective social impact organizations.

We’ve put so much blame on funders and donors for the overhead myth, but in my opinion many nonprofits are equally responsible for perpetuating this cultural b elief.

We can’t build effective social impact organizations that can only grow and flourish if a surprise gift from a billionaire shows up. We have to design and build a sector and a cultural understanding that social impact brands need general operating funds to invest into building effective and healthy organizations as well.

But I’m also more optimistic than I’ve ever been for the social impact space.

Why?

Because I’m not the only one picking up on this. There’s a tidal shift underway that’s growing every day.

And it’s being led by a movement of social impact leaders and believers who are standing up and saying “enough!”

The next generation is savvy, activated, and relentless in their conviction for social progress.

Progressive funders are stepping up and giving more trust and sustainable funding to their social impact partners.

The sector is made up of smart, passionate people who are still making a measurable difference, despite these structural barriers working against them.

But we can’t wait around for the entire sector to recover from decades long systemic issues. We’ve got important work to do today.

And cultural beliefs and norms aren’t the only thin g that prevent social impact brands from reaching their revenue goals. There are other forces at play that make it hard to grow and sustain revenue for your mission. And that’s exactly what we’ll cover next.

Part 2: Why Social Impact Brands Struggle to Attract, Grow, and Retain Revenue for Their Missions

If you’re struggling to grow revenue for your social impact organization, you’re not alone. Let’s examine some of the common problems that many organizations face when trying to attract, retain, and grow revenue for their cause:

Number 1: Lack of Awareness

There are over 10 million global nonprofits and social enterprises in the world. The truth is, there are plenty of supporters out there that believe in your mission and would be willing to invest in it, but they can’t do that if they’re not aware of your brand.

This is why we are so bullish on teaching social impact brands how to play and win in the attention economy. Today, garnering attention is half the battle. But it isn’t enough just to capture attention.

The second problem is converting attention into action.

Many social impact brands have built awareness for their cause, but they struggle to convert that awareness into action. If you aren’t able to transition those who are aware of your cause to actually support your work, it won’t help you grow revenue. If this is happening to you, there’s a number of things that could be going wrong here. You might not come off as credible or trustworthy as an organization. You might not be doing a good job communicating your impact. You might be vague about your mission and vision. Or, it might be the third issue:

Cause Competition

As much as we don’t like to think about our peer and partner organizations in the social impact space as competitors, we have to realize that in the minds of supporters and donors, there are only so many organizations they can support. And you’re not just competing with other similar organizations, you’re competing with other investments, purchases, goods, and services that your supporters are budgeting for. When budgets are tight, philanthropy is often first on the chopping block.

Number 4: Supporter Churn

Even if you’re successfully securing one-time gifts or purchases from your supporters or customers, you might be struggling to maintain healthy retention rates. Only about 34% of donors end up giving again on average. When 76% of your donor base churns, you’re going to need to invest a lot of time and energy attracting new supporters for your cause.

Number 5: Narrow Revenue Streams

If your revenue isn’t diversified, you’re at risk of stagnation, or — even worse — unplanned disruptions to your revenue streams. A common problem with nonprofits is to rely too heavily on major grants from institutional funders, who change their funding priorities and leave nonprofits with massive budget gaps. Social enterprises often rely too heavily on a single product or service or model. This can work well at first, but leads to challenges breaking through revenue ceilings or even unexpected losses when consumer behaviors or market conditions change.

Number 6: Lack of Capacity

The unfortunate truth for many social impact organizations is that being under-resourced means they aren’t able to invest properly in their team or build out effective revenue generation strategies. If you aren’t able to invest in the team or the capacity to build out intentional revenue streams, then you’re going to struggle to fund your mission properly.

Number 7: Poor Supporter Experiences

This is often due to a lack of capacity, expertise, or the tools required to build out good donor or customer experiences. Are you welcoming new supporters with effective outreach and communication to help nurture deeper relationships? Are you educating them on the importance of your work and your mission? Are you reassuring them that their support is important and is powering measurable impact for the cause they care about? If the supporter experience is lackluster, this will lead to churn and stagnation from your community.

Number 8: Vague Impact

If potential or current supporters aren’t clear on your impact or progress towards your mission, then you’re going to struggle to attract new supporters or retain existing ones. You can’t assume that potential or even longtime supporters are in the loop on how your work is progressing. If you aren’t doing a good job telling specific, clear, and compelling stories and proof of impact, it’s going to prevent you from growing your revenue.

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Of course, there are many other issues that can lead to revenue and growth challenges, but these are the ones that we see most often.

If you’re struggling with some of these issues with revenue generation, not all is lost. Because next, we’ll outline how you can create the conditions required to fundamentally change your ability to generate revenue for your social impact mission.

Part 3: How You Can Create The Conditions for Sustainable Revenue Generation

We’ve covered the beliefs and narratives leading to unsustainable revenue in the social impact sector and outlined some of the common problems preventing social impact brands from reaching their revenue goals.

Now we’re going to make a case for a different approach and mindset to revenue generation that can be a powerful force lifting all of your existing efforts up — and might even give you some ideas for new ones.

Rather than talk about different fundraising strategies or revenue generation models, we’re going to think about this a bit differently today. We’re going to look at this through the lens of building a sustainable social impact brand. We’re going to put aside the tactics, playbooks, and campaigns, and instead focus on creating the conditions required to build sustainable revenue.

Because when you create the right conditions for revenue generation, it can unlock a completely different mindset and balance of power that works to your advantage.

In many ways, the strategies, ideas, and mindsets we’ve covered so far in this season of Designing Tomorrow are all put to the test when it comes to revenue generation. This is where you’ll see if the market validates your work, or if there’s still more work to do.

The big takeaway here is that too many social impact brands focus on chasing donors, or selling to customers, but fail to build a brand that magnetically attracts them.

Now, I’m not saying you don’t still need to proactively fundraise, make clear calls to action, market your brand, earn attention, and all of the things you're already probably doing. You still have to be proactive.

But if you can build a brand that creates trust, affinity, loyalty, and deeper community support, then it will make all of those efforts significantly more effective and give you the power to build support on your terms and create sustainability and resilience for your organization.

Ok, so let’s break down the key conditions for this magnetic attraction that can level-up your revenue generation.

Spoiler alert: much of what’s coming is going to fall squarely in the brand-building approach we’ve outlined throughout this season. And that’s not a coincidence. A big reason why we believe so strongly in building a brand for your mission is that many of the steps you’ll take to build your brand also create the conditions necessary to truly grow your revenue.

Now, some of these points might seem basic or obvious. But really think about them deeply and ask yourself if you’re honestly nailing each of them fully. Frankly, it’s rare that we see social impact brands — even those who are quite successful — who don’t have room for improvement on any or all of these points.

First, you really need to own a niche as a brand. If you don’t clearly define your niche, articulate your point of view, and play into your strengths and differentiators, then it’s going to be really hard to make a solid case for supporting your brand over other similar ones in your space.

Even if you think you’ve got your niche down, ask yourself if your supporters, or potential supporters, can understand it on their own, without you walking them through a theory of change diagram.

Because if your supporters or funders don’t know what bucket to put you in inside their heads, they won’t know how to justify your mission or how to explain it to their friends and peers.

You need to build a reputation as the go-to organization in your issue area. Your niche unlocks a sharper clarity of purpose, tighter and clearer messaging, and positions you as a category leader.

But owning a niche is just the beginning.

Second, you need to communicate convincing proof of impact and progress towards your mission.

And you need to do this in a couple important ways. Retail donors and customers are going to be more influenced by human-centered emotional storytelling. Institutional funders are going to want more data-driven proof. If you aren’t set up to measure and evaluate the impact of your work, then this will be challenging. But even simple methods of evaluation can go a long way.

To take this one step further, you need to learn to craft this content in creative and scroll-stopping ways. Because if no one actually sees or consumes your content, then it can’t be effective in communicating your impact.

Often, social impact brands will tell us they are doing a good job with their impact storytelling, but our audits find that they aren’t leveraging this important element effectively. You can’t assume that your supporters and audience will consume or even see the majority of the content you publish and distribute.

Although your content strategy should include more than just proof of impact, this should be the main focus of your strategy. Because it’s important for current and prospective supporters and customers.

Third, you need to make a compelling case for your issue.

Although you understand how important your mission is, you can’t assume everyone else does. You need to be able to clearly articulate why your work matters, why it matters right now, and why it will continue to matter tomorrow and in the future.

Alongside proof of impact, you need to constantly communicate the importance of your mission. You need to educate your audience about why your work is significant and relevant, and why they should support it.

You have your finger on the pulse of this issue, but your supporters probably don’t — at least to the same extent that you do. And this is true for retail donors and customers as well as major funders. You have a responsibility to educate your supporters about the priorities, barriers, and opportunities for your issue area.

Make a strong case for your issue and it will unlock outsized support for your mission.

Fourth, you need to create donor and customer experiences that nurture deeper relationships with your brand and ultimately build community.

You want to build brand loyalty and long term support from your community, not churn and burn supporters and then have to go out to find new donors or customers to replace them. Again, only 34% of one-time donors make a second gift. Recurring donors, on the other hand, have an average lifetime of almost 8 years.

Your supporters need ongoing reminders that your mission is worth supporting, that your organization is making a real difference, and that their continued support is a crucial part of realizing your mission. You need to help connect the dots for them and stop assuming they can or will do it on their own. This is the biggest miss we see so many social impact brand making in their brand and communications strategy and execution.

You need your supporters to know and feel that their individual support has led to meaningful, measurable, consistent impact for the mission they care about. This is their return on investment — the payoff for their generosity. And when you do get this part right, you’ll reduce supporter churn, build deeper relationships with your supporters, and create a powerful community of advocates who will enthusiastically tell your story for you and build broader awareness for your mission.

By the way, we did a deep dive on the power of building community around your mission in our last episode. If you missed that one, put it on your queue and check it out after this episode.

If you think deeply about the key points above, and put effort into improving each of them, you will absolutely create the conditions needed to build magnetic attraction for your mission and grow your revenue.

Creating the right conditions for revenue growth will make all of your existing marketing and fundraising efforts significantly more effective and allow you to invest in yourself and build a truly healthy and sustainable organization.

Building magnetic attraction for your brand allows you to stop chasing funding and revenue. And it gives you the power to only accept support from those who truly align with your mission and vision instead of being influenced by outside opinions and priorities.

This is the way to finally break free of the revenue-chasing rat race and earn the support and resources needed to fully realize your mission.

Outro

Many organizations will continue to struggle to reach their revenue goals, build capacity, retain their team and their supporters, and ultimately fail to reach the full impact potential for their mission.

We need to change the cultural beliefs and narratives that shape our sector and are holding us back.

And the best way to do this is to succeed despite these structural barriers. To learn how to create the conditions for revenue generation. And to stop chasing revenue and instead learn to magnetically attract it.

You can lead by example and show the world what it looks like to run an organization free from scarcity and fully resourced to make a true impact.

If you take one thing away from this episode, let it be this: social impact organizations should not and can not accept a second-class status in our global business community.

We are solving the world’s greatest problems. And to do that we need to attract and retain the world’s greatest minds and build healthy, sustainable, and resilient organizations.

Organizations that are fully resourced and given the proper conditions and support they need to do their best work.

The world needs you. Let’s make sure you have what you need to show up as your best self, with the resources and support required to fully realize your mission.

Stop Chasing Revenue. Learn to ATTRACT it Instead.

Resources:

Intro

Part 1: Beliefs and Narratives Leading to Unsustainable Revenue in the Social Impact Sector

Part 2: Why Social Impact Brands Struggle to Attract, Grow, and Retain Revenue for Their Missions

Part 3: How You Can Create The Conditions for Sustainable Revenue Generation

Outro

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The Trap of Transactional Marketing

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