We covered revenue models for nonprofits earlier in this guide. Before you can write a revenue model statement for your business plan, you must have determined what revenue sources are realistic for you to pursue and rely on in your first year or two of operations.
Your business plan will list the potential revenue sources and project conservatively how much income you expect and when you will receive it.
INN has surveyed its members and studied their revenue sources and found the following:
- While grant funding to journalism is growing overall, dependence on foundation funding is decreasing as a share of most news nonprofits’ budgets because it does not provide long-term sustainability. Think of it as seed funding while you build added revenue streams or to do something new.
- More than two-thirds of the 109 news organizations in our 2020 INN Index survey have three or more revenue streams. For updates and details by publication type, you can find good references in the full INN Index report.
- The successful sites start by putting put at least half of their resources into running the business, reining in editorial costs and working on revenue generators such as events, advertising and sponsorships.
- The most cost-effective revenue generator is simply asking people for money.
To add credibility to your assumptions and projections, and to confirm that you have a marketable plan, ask a sample of your target audience what they are willing to pay for a subscription, membership or sponsorship. Individual donors and particularly major donors are relatively undeveloped revenue sources for news nonprofits, making up one third of total revenue for the organizations in the INN Index. By comparison, individual donors provide more than 70 percent of charitable revenue for all nonprofits across the U.S., according to Giving USA.
You can find reference points on averages for small donor giving in the NewsMatch 2018 Learning Report. But nothing beats sampling your intended audience.