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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 pooling of 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 with the capacity to 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. We find and fund, using resources from a range of funders and donors, 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 of grants. That might be a monthly, small-dollar donor program, or 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 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 all of 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 made independent revenue generation a priority and are seeking a sea change in how philanthropy invests in it. 

1. Readiness

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 again and again.

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.

Photo: Erica SmileyJobs 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 the development of 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 that we can now pivot back to our original concept, where workers can administer this kind of fund according to what members want and need.” 

2. Agility

Photo: Maria Tchijov“Pivot” has been the unofficial theme of the chaotic last year and a half. “The movement often needs 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.

Photo: Andrew FriedmanAndrew 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.” 

4. Accountability

Photo: Marilyn WillmothMitigating 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.”

Photo: Nadine SmithNadine 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.”

Photo: Julian WalkerPushBlack, the nation’s largest nonprofit media organization for Black Americans, wants to be accountable to the community it serves. Independent revenue generation is a priority tactic because it allows the organization to focus on what the community wants and is core to the organization’s 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?

Photo: Marcia Whitehead“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.

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Meet The Progressive Stimulus Project’s Grantee Partners

Decades of organizing efforts deserve a great deal of credit for the new chapter we started as a country last week. Among vital lessons learned in 2020 is that strengthening groups focused on systemic change is essential to forging pathways to power. For the Progressive Multiplier, it reaffirms our commitment to building a sustainable, self-determined progressive movement with the scale to win. As we enter the new year, we are energized to start a new chapter for our organization as well.

These nonprofit organizations have begun working on independent revenue generation experiments through the Progressive Stimulus Project. We are thrilled to be partnering with these grantees as they navigate fundraising challenges and opportunities that are unique to their organizations during this uncertain economic time:

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Progressive Multiplier Grantee Partner Fundraising Successes During the Election

“____ days.”  At the start of every phone call we’ve had with our grantees during these past few months, that countdown until Election Day has been their universal answer to the question, “How are you doing?”  As that clock winds down until next Tuesday, we wanted to highlight some of the great revenue generation work these organizations are doing, as well as share lessons they’re learning and thoughts on what we think could be next for electoral-adjacent fundraising.

People’s Action

Eddie Van Halen, Dave Grohl and….People’s Action?  These venerable rock and roll icons weren’t the only ones making headlines in Rolling Stone this fall.  People’s Action (PA) is a national network of state and local grassroots power-building organizations united in fighting for justice.  The organization’s  innovative electoral deep canvass experiment was covered by the legendary publication in September ahead of the release of PA’s study confirming that the tactic can significantly reduce Trump support in rural and small-town America in key battleground states.

The study’s findings are particularly poignant at a moment when division rules the political landscape.  Deep canvass conversations, rooted in, as George Goehl, director of People’s Action, told Rolling Stone “curiosity and compassion” proved to be 102 times more effective at changing an undecided voter’s mind than traditional presidential voter persuasion tactics.  The deep canvass campaign made over 1 million phone calls by mid-October and is continuing straight through Election Day.

Kelly Boehms, the group’s Digital Outreach Organizer, said, “There is a whole new level of experimentation going on at People’s Action.”   PA built upon its deep canvass experiment by testing television and radio ads as well as garnering earned media opportunities in the districts where they are deep canvassing.  They have also tested fundraising appeals to current supporters through email to fund these ads or advance the deep canvass. Historically, People’s Action has primarily focused on supporting base-building for affiliates in states across the U.S. “People’s Action has never had a national base of distributed volunteers at this scale – so we’ve never had this kind of data to work with,” Boehms stated.  “We’re trying to find the best balance between building a national political home for these new supporters and helping our network meaningfully absorb these people too.”

Since its inception in 2016, People’s Action has embraced agile experimentation as a path to scale on the inexorably linked fronts of organizing and independent revenue generation.  The organization partnered with Progressive Multiplier to test a c4 planned giving program, garnering over a half million dollars in bequests from the $25,000 Recoverable Scale Grant.  Looking at post-election, Boehms, in partnership with PA’s fundraising and movement politics teams, wants to further test how the organization can fortifying donor organizing within the context of deep canvassing and the thousands of volunteers and supporters it has brought into the organization.  She believes that “…donor organizing is the key to our collective liberation.”  This may be in the form of a deep canvass to defend democracy if the election is contested.  It may be around COVID-19 relief and recovery at both the national and state levels.  The data and these next critical weeks will define their direction.  

It Starts Today Missouri

In 2017, statewide Democratic votes surged by 2% in Virginia because of an effort to turn out voters in less competitive (and uncompetitive) state legislative races, increasing the vote for state-wide candidates. This proved to be a cost-effective method to get out the vote because these voters—especially those who are invisible to the voter file—are often ignored by resource-strapped statewide campaigns.

“Wouldn’t it be nice if your ability to fundraise wasn’t a prerequisite to run for elected office?” This question led Jonathan Zucker to found It Starts Today (IST), a 527 that enables crowdfunded public financing of Democratic candidates through low-cost monthly subscriptions. Founded on election night 2016 and launched during the Women’s March in January 2017, IST has raised over $472,000 to fund every U.S. House and Senate Democratic candidate.

To test the crowdfunding model on state legislative races, in late 2017 Zucker partnered with Michele Hornish to found It Starts Today Missouri (ISTM). Because Missouri law allows 527 organizations to accept 501(c)(4) donations, Progressive Multiplier Action Fund was able to make a grant for ISTM to test different audiences and creatives through Facebook donor acquisition advertising to scale the MO subscriber base. “60% of Missouri has seen nothing but GOP candidates for cycle upon cycle. Democrats who do run in those districts have little infrastructure on which to rely and significant fundraising challenges to overcome. With no support and limited ability to do outreach, they become just a name on a ballot…voters are left without a real choice,” Zucker said. “We are changing that.”

ISTM’s revenue generation experiment results were impressive. With a $15,000 PM grant, the organization expects to bring in more than $81,000 in subscriber donations over the next three years. “We’ve figured out how to harness full cycle recurring donations to fund candidates. While some incumbents are able to do this, no challenger can. Most candidates (even incumbents) enter a state race 6-12 months out and there isn’t much time for recurring donations to pile up,” Zucker stated. “The way we approach electoral funding is we engage donors who contribute for the full cycle: for example a donor we recruited in December 2017 is here for 2020, and they’ll still be with us in Jan 2021.”

The benefits of this revenue generation model go far beyond the direct funding of candidates and building the subscriber base in Missouri. Hornish believes, “It’s a lot easier to recruit great candidates when we can tell them we’ll have cash for them when they are the nominee, especially in red states like Missouri… In scarlet red areas where they’ve had no Democrat running for so long, conservatives have become radicalized—and Democrats demonized. With more Democrats running in these districts, the candidates can challenge what their neighbors thought they knew about Democrats. They’re also able to rebuild infrastructure in places where cash-strapped state parties can’t invest. They can hire young people for campaigns, they can train volunteers (and give them pizza), they can help habitualize voting for people who didn’t see a need to—all while building their own experience and spreading a Democratic message. This is the long game and it builds the bench.” 

The group’s goals for 2022 are to expand its crowdfunding for state legislatures to several states facing competitive statewide (Governors and Senators) elections. At the same time, it plans to activate the It Starts Today national network of donors to start recurring donations that will fund key Senate races in 2022 and beyond–coupling their sophisticated understanding of campaign finance with an understanding of low dollar asks that lets them get money where it can actually transform democracy every cycle. 

“We have found a way to harness this amazing grassroots community that has come forward since 2016. People are looking for a way to stay involved,” Hornish said. “They may not be able to dedicate time, but they can donate $10 a month. It’s strategic, it’s simple, and makes people feel like they are part of an important community.”

PushBlack

PushBlack is the nation’s largest non-profit media organization for Black Americans, currently serving 9 million people monthly across all its platforms.  Subscribers are activated, through the power of narrative, to build their agency and create lasting economic and political impact.  Core to PushBlack’s theory of change is building daily relationships with subscribers by serving groundbreaking Black history and news content.

These strong relationships, built not just during election season when many groups show opportunistic interest in the Black community, position PushBlack to be an authentic voice for their audience when it comes to non-partisan get out the vote (GOTV) campaigns.  Chief Product Officer and Co-Founder Tareq Alani said, “We are on track to reach millions of Black voting age people with important and relevant election news and information this election cycle.”

PushBlack has applied the same testing rigor it applies to its GOTV work to its revenue generation campaigns in partnership with the Progressive Multiplier.  Core to its theory of change is the organization’s commitment to self-determination.  “Our goal has always been to be self-sustainable outside of grants.  (Our work with the Progressive Multiplier) creates a discrete contract and deliverable around financing for us,” said Alani.

Progressive Multiplier (PM) provides growth capital for groups that are ready to scale up. In 2019, PushBlack ran a series of fundraising tests with a test grant from the PM. Among the breakthroughs was adding the “no” button to donation forms. While the button did not decrease total gifts, it prompted people to post a fundraising message on their social media, which resulted in $.65 per person who said no to giving.  PushBlack’s testing efforts turned $25,000 into about $400,000 of expected income, helping the organization pass $1M in earned revenue in 2020 from small dollar subscriber donations.

Based on their success, PushBlack has secured Recoverable Grant financing from PM to invest more heavily in scaling its fundraising program. With an eye toward growing its subscriber community and the Black electorate before 2022, PushBlack will be using its grant to apply its fundraising formula to its new Black Finance content offering.

Thinking about what comes next, Alani said, “After the election, we’ll plan out what we need to do before 2022.  Right now, we’re working on formulating a Black agenda through surveys and focus groups so we can understand the positions our subscribers hold and how they align with ours as an organization.  Whatever we discover, we’ll incorporate into our message and revenue generation testing.”