Importance of Diversified Revenue Streams for Nonprofit Groups

Any entity that relies on a single revenue source is at risk, and nonprofit groups are no exception. To accomplish your mission, and to continue ongoing operations, you need to find additional revenue streams that are independent of each other. New revenue streams provide the clarity and confidence you need to satisfy your mission regardless of what the future holds.

Let’s take a closer look at revenue diversification, what it means for nonprofit groups, the pros and cons of diversifying, and how doing more business means more recordkeeping.

Benefits of Diversification

Diversification refers to how reliant an organization is on one or more revenue streams. That means that if your revenue stream is diverse, you have other options that will support your organization if one stream fails.


While a single revenue stream can sustain your organization, diversification mitigates risk. If, for example, a grant you rely on becomes unavailable or regulations change and limit donation amounts, having multiple revenue streams buys you time to replace those other sources.


When you have multiple revenue streams, a single resource doesn’t have the leverage to influence how your nonprofit behaves. You won’t be beholden to a single source, meaning your organization can take on a larger mission and accomplish great things for more communities.


Your organization is the product of a community, and your mission is to satisfy something this community needs. The pursuit of resources has a great deal of influence on how the community perceives your group. Organizations that have prominent fundraising campaigns, for example, may be well known in one community but invisible to others.

Nonprofit Revenue Diversification Ideas

Not all diversification paths will work for every group, and differences in time and other resources will impair your ability to diversify. But these ideas take very little investment and are independent of what you do as an organization.

Run workshops or webinars – Your organization has one resource that comes with the work you do: your volunteers. A passionate and dedicated team can help spread your message through programs designed to showcase these skills and experiences.

Sell merchandise – Not only will branded items like t-shirts provide a separate revenue stream, but they also help spread your message and increase awareness about your cause.

Seek out tax-exempt opportunities – Some organizations operate a thrift store to sell donated items, while others rent out unused building space. These are ways to make money from dormant assets.

New Revenue Streams Means More Recordkeeping

Potential donors, especially those that intend to give a large or recurring gift, will look at how your organization receives and uses money and the basis of how nonprofit entities justify spending is through accurate, transparent recordkeeping.

Rubino is an accounting firm that has handled nonprofit accounting and nonprofit bookkeeping for decades. We help your organization analyze current nonprofit revenue sources and make the best decisions to diversify your revenue, whether this is through a side hustle or by developing new ways to raise contribution income. Rubino works with nonprofit groups to maintain tax-exempt status through IRS form 990 and handle nonprofit tax filing.

A trusted accounting partner is an incredible asset, and Rubino can work with your organization to strengthen the present and solidify the future, so your group is always available to fulfill its mission.