Wednesday, April 18, 2007

Relationships Behind Big Growth for Nonprofits

Since 1970, more than 200,000 non-profit groups have been established in the United States. Of those, only 144 of them have reached $50 million in annual revenue.

In a recent study and discussion conducted by Stanford University's School of Business, non-profit leaders discussed the challenges they face and their effective methods for growing a non-profit organization. All leaders agreed that funding organizational growth is a difficult task, and those over $50 million mark noted a different approach to raising funds.

Larger non-profits succeed based on relationships. They focus on creating one long-term relationship with one funding source, like a corporation or the government. And, they didn't put all their eggs in one basket -- they still pursued diversification and risk management strategies.

Of 101 organizations that have a dominant funding source, over 20% had a secondary source that accounted for more than 10% or more of their revenue. What does it all mean? Focus on building relationships and go big if you can, but don't turn your back on everyone else.
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