Alumni Consulting Team (ACT)

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Typical questions to be answered during an earned income project:

• How can the nonprofit best position itself to generate earned-income while still holding true to its values and mission?
• What strategies would the nonprofit adopt in order to do so?
• What is the size and scope of the marketplace? What is the potential revenue the nonprofit could generate, and over what period of time?
• What staffing and other organizational capacity considerations would the nonprofit need to consider in order to be a viable contender?

In some cases it may be appropriate to define an ongoing framework and process for the nonprofit's use in identifying and evaluating future earned-income opportunities after the ACT project is complete. As part of such a process, the two-by-two matrix below is an example of an approach for categorizing earned income opportunities.

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1. Meet with the board of directors and the executive director to kick off the project.
2. Hold a brainstorming session with staff members to identify potential earned-income opportunities and any concerns, including potential conflicts with the nonprofit's mission.
   (This may not be necessary if the client already has identified one or more potential earned income opportunities that he or she wants the project to focus on. However, a staff brainstorming session is a very effective way to generate staff involvement and buy-in, and surface staff concerns that must be addressed during the project.)
3. Prepare a first draft of the possible types of earned income that the nonprofit could generate, with initial assumptions about each type, priorities if appropriate, and policy recommendations for addressing any conflicts with the mission.
4. Investigate potential earned-income programs. This should include a search for nonprofit organizations similar to the nonprofits that have implemented (or attempted to implement) earned-income programs, possibly including organizations outside of the Bay Area; a study of the potential markets; and a survey of the competitive environment (including both potential partners and competitors).
5. Identify the nonprofit's competitive strengths and weaknesses, organizational resources, capacity for generating earned income, and potential impact on the organization's nonprofit mission-driven projects.
6. Prepare a first draft of a plan for the nonprofit to enter the earned-income marketplace, supported by a rough staffing plan and financial model covering the first few years, and make a preliminary go/no-go recommendation. Alternatively, identify a couple of different earned-income options, with less detail (e.g., no staffing plan or financial model), but with pros and cons. Then, in a second phase, provide more detail as well as a go/no-go recommendation.
7. Conduct a midcourse review with the client. The initial study may have revealed that there is no attractive and appropriate opportunity for an earned-income program, in which case the project should be terminated. The review may also serve to redirect or focus the team's efforts.
8. Refine and add details to the most promising earned-income program, including a financial model for the first years. Review this in detail with the nonprofit's management, board, and key stakeholders, incorporating feedback into a final plan.

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