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Four Reasons to Invest in Independent Revenue Generation
Originally published in the Johnson Center, 06/15/2021
What does liberation require of us?
At a conference I attended two years ago with Latinx, Black, Native American, LGBTQ+, and Asian American Pacific Islander leaders of state-based civic engagement nonprofits, the facilitator, Aida Cuadrado Bozzo, asked, “what does liberation require of us?”
I was dumbfounded both by the range of answers from these leaders and the lack of my own personal point of view on the question. That moment — filled with humility and hope — has since defined my work as a grantmaking intermediary.
Grantmaking intermediaries play an interesting role in the philanthropic ecosystem. To quote the MacArthur Foundation, “Working through intermediaries can facilitate collaboration with other funders and pool resources for re-granting to others. It also makes it possible for us to augment the efforts of our staff with those of individuals with specialized expertise… Effective intermediaries are well-run, knowledgeable organizations that can grant or invest our funds and oversee their use.”
In the case of Progressive Multiplier, the intermediary where I serve as managing director, our expert knowledge is to support specifically progressive nonprofits in fundraising and revenue generation. Using resources from a range of funders and donors, we find and fund scalable, repeatable independent revenue generation methods, and we share them with all progressive nonprofits through our online Center of Excellence, creating a community of peer learning and expertise. In this case, “independent revenue generation” refers to the methods nonprofits use to raise money outside grants. That might be a monthly, small-dollar donor program, a social enterprise, or membership dues. The possibilities are truly endless.
These revenue-generation methods drive people and dollars that can be spent at the groups’ discretion to progressive nonprofits. In turn, these organizations grow stronger and can self-direct how they serve their missions. Simultaneously, our funders realize a high-leverage return on their investment that continues to build power for the movement (Our grantee partners are currently on track to earn about $6 for each one they’ve been granted!).
So, the keystone of our answer is to what does liberation require? Independent, flexible revenue.
Our Partners: What Independent Revenue Generation Means to Them
Throughout the first half of 2021, I checked in with our grantee partners to see where revenue generation and self-sustainability fit into their vision and mission now that they had survived the multi-fronted turmoil of 2020 (while acknowledging that those crises largely remain unresolved). After we started having these conversations, it quickly became clear that 2020 showed us how critical independent revenue generation is for organizations to not just weather tough times but thrive during them.
Here are the four reasons why our grantee partners have prioritized independent revenue generation and are seeking a sea change in how philanthropy invests.
We’ve all heard the sayings. Chances favor the prepared mind. Catch lightning in a bottle. Nonprofits trying to generate their own revenue in the headline-rich year of 2020 proved these axioms repeatedly.
When the pandemic, uprising for racial justice, and an unprecedented focus on the November election intensified public interest in social, racial, and economic justice work, our grantee partners who were ready with ideas, staff, and independent investment dollars converted that interest into revenue and supporters for their organizations.
Jobs with Justice (JWJ), a workers’ rights and economic justice group, has prioritized creating independent funding through both donation programs as well as social enterprise and values-aligned investing for some time. When the crises of 2020 hit with a devastating effect on workers in this country, JWJ was ready to react.
“Having the plan ready to fundraise for a hardship fund for an economic crisis — like a non-strike strike fund — let us launch immediately. You have to be ready when the crisis comes, so investing in developing frameworks that won’t have an immediate ROI is critical to long-term revenue,” said Erica Smiley, JWJ’s executive director, highlighting the importance of using independent revenue to support readiness. “The pandemic provided a rapid testing opportunity to pivot back to our original concept, where workers can administer this kind of fund according to what members want and need.”
“Pivot” has been the unofficial theme of the chaotic last year and a half. “The movement often needs an immediate response, but philanthropy doesn’t move at that speed,” said Maria Tchijov, vice president of advocacy and membership at UltraViolet.
Despite an unprecedented outlay from philanthropy during the pandemic and uprising for racial justice, independent revenue allowed our grantee partners to pivot faster to crisis response than the speed of institutional funding often supports.
“Having a sustainable, member revenue-generating system allows us to move … at the speed, velocity, and size that the moment demands.”
For UltraViolet, a national advocacy organization that drives feminist cultural and political change, one of these urgent moments happened on March 13, 2020 when Breonna Taylor was murdered. The group immediately began collaborating with Black Lives Matter activists in Taylor’s hometown of Louisville, Kentucky to demand justice for her — placing ads calling for the firing, arrest, and charging of the officers responsible for Taylor’s death and pressuring the area’s major employers to join the fight. Tchijov credits UltraViolet’s members with being able to help fund this collaborative work quickly. “Having a sustainable, member revenue-generating system allows us to move in those moments at the speed, velocity, and size that the moment demands.”
3. Scale & Sustainability
The demand on nonprofits for mission delivery was unprecedented during the first year of the pandemic. While COVID vaccines and a rebounding economy have meant fewer news headlines about things like essential workers’ rights, the pandemic’s deep toll on women’s workplace equality, and more — the national crises around equity and justice have not gone away. UltraViolet needs to have 5x its current budget to meet the demands of fighting digital disinformation’s impact on women, advocating for sexual assault survivors, and working to defund the antichoice movement.
Andrew Friedman, co-executive director of Center for Popular Democracy, is also focused on the need to scale to meet the demand. “We’re nowhere near our aspirations. Even when you have a robust organization, great staff, and a deep commitment, raising independent revenue is hard.”
Friedman’s team is dedicated to conquering the hard, blending tried and true small-dollar donor tactics with alternative revenue generation programs like the Litigation Partnership Project (LPP). The LPP aims to ramp-up and streamline litigation work with CPD/A affiliates, community-based organizations, and the private bar, in a way that will access justice for members, increase CPD/A’s impact, and increase capacity for organizing. “Scaling up investment allows us to have access to more independent revenue over time to have more agility to set the priorities for our work. With enough independent revenue, we don’t risk having a change in a foundation funder’s priorities reset the priorities of our work.”
Mitigating the risk of funder priority shifts is a welcome tradeoff for the accountability independent revenue generation creates with individual donors, according to our grantee partners. “We have thousands of members supporting us and that gives us the backing to [do] work aligned with our mission and withstand corporate influence,” said Marilyn Willmoth, membership organizing director at Corporate Accountability (CA).
Unlike most nonprofits in the progressive sector, CA is about 85% funded by individual donors and the group strongly believes that that is where the power is — with people who have invested in the fight. “We want our work to be people-centric and to serve the communities most impacted by corporate abuse, so we need to be accountable to people across all race and class backgrounds… Any gift amount is meaningful and power-building.”
“At the end of the day, we are about building power, and when people are more closely connected to each other and our organization, we win.”
Nadine Smith, executive director at Equality Florida, the state’s largest civil rights organization dedicated to securing full equality for Florida’s LGBTQ+ community, echoed Willmoth’s belief in the accountable connection between power building and raising independent revenue. “If you give $3, you’re in it. We take you seriously — you’re a shareholder and a stakeholder, so it changes people from thinking of us as ‘you’ to ‘we.’ At the end of the day, we are about building power, and when people are more closely connected to each other and our organization, we win.”
PushBlack, the nation’s largest nonprofit media organization for Black Americans, wants to be accountable to its community. Independent revenue generation is a priority tactic because it allows the organization to focus on what the community wants and is core to its philosophy of empowerment in the Black community.
PushBlack CEO Julian Walker said, “PushBlack is powered by generosity and has a diverse funding base. In order to maintain its editorial independence, generate unrestricted revenue, and be accountable to the community it serves, PushBlack has invested in growing its small-dollar donor program. In 2020, the organization raised $1.4M from subscriber donations.”
What can philanthropy do?
“They fund membership fundraising?! We were giddy.” This is what Marcia Whitehead, managing director of development at Corporate Accountability, recalled about the moment she found out about what Progressive Multiplier funds through the partnership of our funders. That’s a solid indicator of how under-resourced revenue generation is in the nonprofit sector.
Our grantee partners want philanthropy to invest more in the revenue generation work and infrastructure that enables readiness, agility, scale and sustainability, and accountability for groups like theirs. Beyond that, they want to see a more authentic way of evaluating investment in revenue generation. It’s not just dollars and cents raised within a grant period. It’s balancing short-term returns with investments that have a longer trajectory for greater revenue impact. It’s about having a harm reductionist model to capital. It’s about democratizing philanthropy to build a movement for and by the people it centers.