Is Your Nonprofit Giving Away Things It Should Charge For?
Many nonprofits, especially new ones, don’t like to charge for things. They get uneasy asking for money unless it’s in the form of a donation. They may even think they can’t legally charge for things because they’re a nonprofit.
Nonprofits need to get comfortable charging fees, however, because not only is doing so perfectly legal, but such fees can be an important source of additional revenue, allowing for growth and ultimately serving the mission
Here are ideas on what your nonprofit could be charging for:
Membership dues. Many nonprofits offer memberships for a fee. Of course, people don’t (in most situations) have to be members to take part in the activities or to donate, but those who do become members are often given access to many perks, such as a newsletter or magazine, discounted rates on tickets to an event, or member-only events. An art museum is a great example of how this can work. People don’t have to be members of a museum to visit, but members may get invitations to members-only events, perhaps featuring meetings with artists or curators, plus member preview nights for special exhibits. Many people are willing to pay a membership fee in order to enjoy such perks.
Fees for services. If your nonprofit serves clients, patients, or anyone in need, you may feel hesitant about charging for your services. Multiple studies have shown, however, that people attach greater value to services that they pay for—and are, as a result, less likely to skip appointments and so forth. Even if you charge a nominal fee compared to full market rate, you may find that doing so has multiple benefits.
Publications. Magazines and newsletters produced by nonprofits are not only great marketing tools, they’re also a great way to bring in extra money. While you may include these as a perk for members, you can offer them to non-members for a fee. The publication can include information about your nonprofit, how to donate and how donations are used, events you have scheduled, and updates about past events.
Speaking engagements. Having your experts or leaders speak at a conference can get your nonprofit noticed and help build its name in the community. If your nonprofit is in the medical field, for instance, one of its experts may be asked to participate in a panel discussion at a women’s health conference, or even to be the keynote speaker. Once you have a few presentations under your belt, or if you’re being asked to speak at a state, regional, or nationwide conference, consider asking for a fee for your time. The speakers who will be joining you at the conference will be charging a fee, so why shouldn’t you?
Consultations. Maybe your nonprofit has developed a program that can benefit sectors of the community outside its immediate client base. If so, then other organizations might want to consult with you, either to work with your nonprofit or to start their own program. If looking to start their own program, they likely want you to tell them what your nonprofit does and how it does it. They basically want your business model so as to copy it. If you’re okay with that, then by all means, consult away. But you could be charging for your time and effort, as well as for sharing your secrets.
Classes. If your nonprofit offers any type of class to the general public, it should do so for a fee. For example, if your nonprofit is an environmental group, it could offer classes on composting, conservation, and gardening. While there may be times your nonprofit would want to offer these classes for free, there might be other times, depending on the nature of the class, that a fee would be appropriate.
Space rental. If your nonprofit has useful that others might wish to use during off hours—for example, a garden area that could be used for weddings, or a classroom that another organization might utilize for a seminar—there’s little reason not to charge market rate.
Merchandise. If your nonprofit is involved in an event, it could sell branded merchandise, such as T-shirts, hats, or coffee mugs. This not only allows your nonprofit to earn money, it’s also a powerful marketing tool. If your nonprofit sells a T-shirt to someone at an event, that person will be marketing for your nonprofit every time he or she wears it. Almost every cancer organization does a 5k, and while participants receive a T-shirt when they register, there are many people who show up just to watch and who would be happy to buy a T-shirt to support the cause.
Don’t be afraid to charge for things just because you’re running a nonprofit. Charging fees can help offset your operating expenses. While there are legal limitations on what a nonprofit can charge for, as long as it’s related to your nonprofit’s purpose, you should be okay. (Learn more about tax concerns when your nonprofit earns money.) When in doubt, consult with an attorney or tax adviser. Your nonprofit relies on money in order to complete its mission, and people are willing to pay these fees if they know they’re going to a cause they believe in.