Weighing Options, Confronting Obstacles

Have you effectively tapped your development opportunities? Is your list of potential funders continuously growing, or has the funding well run dry for your organization? Organizations that have only touched the tip of the iceberg when it comes to development opportunities may not need to consider business ventures. [...] What are the opportunity costs? In other words, are there other ways the money might be spent more productively? For example, if a nonprofit invested in a small business activity when is could have used that money to hire a fundraiser who could bring in more money than the business activity, the opportunity cost is the money invested in the business that is lost because hiring a fundraiser would h. [...] What are the risks? The board and staff must assess the potential risks before deciding whether the organization is ready to try a new business venture. [...] If staff and board members can see that the earned-income strategy does indeed relate to the organization’s mission and could possibly make the nonprofit more effective, they will be more likely to be supportive. [...] Few nonprofits have the resources to spend the vast majority of their time on a new business, so they may have to spend a year or more planning and saving for a venture.