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What Do Nonprofits Need to Dream and Go Bigger?

Over the summer, our Fair Work team met with worker rights and economic justice leaders across California, to delve into current challenges and opportunities facing low-income workers and where our support might increase workers’ power to shape their lives and livelihoods.

With achievements and aspirations that exceed their budgets, these organizations, not unlike many economic, racial and social justice groups, are punching well above their weight. They are delivering historic wins for workers—from protections against on-the-job retaliation to “fair work week” ordinances to restitution for stolen wages — yet often do so in an environment where funding is insufficient, uncertain, short-term and restricted.

Institutional philanthropy has embraced important and positive changes in recent years, including a growing emphasis on racial justice and more trust-based relationships with nonprofits. But many funders still prefer short-term, project-based grants to multi-year general operating support. The median foundation awarded only 32% of its total grant dollars this way in 2022, and too few of us provide nonprofits with risk capital to support innovative approaches and experimentation, including strategies for tapping alternative revenue sources.

Expanding Nonprofit Revenue Streams

“Revenue diversification” may sound like a dry topic, but it is critical to the ability of nonprofits and movements to chart a more flexible path to sustainable impact. That’s why we supported The LeadersTrust to do a deep dive into what it might take to expand and deepen the revenue streams nonprofits need. In particular, the report looks at how funders, nonprofit capacity builders, and others can support nonprofits to raise more resources from individual donors, memberships, and other independent activities.

Linda Wood and Melissa Mendes Campos refer to their report as a “call for conversation and action.” It’s a terrific read and prompts all of us to consider how we can better support innovation around revenue development.

For our part, we’re investigating a “flexible fund,” building on our core model of multi-year, flexible grants, to advance risk-taking and experimentation on revenue diversification, among other areas of innovation.

Diversifying Nonprofit and Movement Revenue: A Call for Conversation and Action Research and Editing Team: Linda Wood and Melissa Mendes Campos with William Woodwell | August 2024

At the same time, we recognize that our support only goes so far, so we are looking into other ways to assure the strength and sustainability of the organizations we support.

We are eager to be part of the conversation. Reach out to us at fairwork@irvine.org and let us know your thoughts on the topic.

Photo credit: Joyce Xi