Revenue : A Important Topic For Nonprofit Organizations

756 WordsJul 14, 20164 Pages
Revenue diversification is a very important topic for nonprofit organizations. Nonprofits gain revenue from many sources individual contributions, corporate giving and government grants and tax breaks are a few examples of revenue points for nonprofits. According to Dennis Young, Nonprofits are dependent on several different sources for their income and several different combinations of these sources (2007). Having many points of revenue can be helpful in helping nonprofit firms stay balanced and on mission. Revenue diversification is the act of gaining revenue from many different sources in order to reduce exposure or risk of losing a large part of revenue if one source changes. The fact that so many revenue sources exist for nonprofit organizations is a positive trend that can help nonprofit organizations remain balanced. Financial balance, helps by ensuring that nonprofits do not become too dependent on any one source of revenue. One thing that is consistent with today’s economic environment is the fact that things are subject to quickly change, and this can impact revenue given to nonprofits. If an organization is planning to give a certain amount to a nonprofit partner, but economic trends change budget cuts could cause the nonprofit to gift to be lowered or cut altogether. This is where revenue diversification comes into play. By gaining revenue from differing sources nonprofit firms seek to not be dependent on environmental conditions such as economic trends, donor
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