What is Earned Income and Why is it so Important for Non Profit Organizations?

It’s been a busy few months since I started at The Food Trust back in June.  Since then, I’ve had the opportunity to meet with several organizations partnered with The Food Trust as part of the Get HYPE Philly!    Their work engaging youth to drive healthy change in their communities has been very inspiring.  Here are some pictures from when Dorothy, my fellow GSK’er also on PULSE at The Food Trust, with one of our partners, The Village of Arts and Humanities.  This is such a cool organization right here in my back yard.  http://villagearts.org/

My role is to help Get HYPE Philly! Collective partners identify opportunities to grow what’s called “earned income.”  I had no idea what this meant when I first started but quickly learned about how non-profit organizations like The Food Trust are funded.  As you might imagine, grants and donations play a significant role.  Grants and donations are funds given without receiving any goods or services in return and make up about 75% of many non-profit organizations’ budgets.  Unfortunately, since grants can be highly dependent on the economy and other factors, many non-profits have been looking to diversify their budgets by growing their earned income funds, while maintaining their non-profit status and keeping true to the organizational mission.

Unlike grants, earned income is what organizations receive from the sale of good or services.  Examples of this include ticket sales for an event or something we’re very familiar with here in the US – Girl Scout cookies.  Growing earned income allows non-profit organizations to be less subject to the funding fluctuations associated with grants and donations.  Essentially, it gives non-profit organizations a bit of breathing room for increasingly tight budgets.

I’m in the process of meeting with each of the Get HYPE Philly! Collective partners to learn more about each organization, who they serve, how they work and brainstorm with their teams about ways we can grow their earned income.  Stay tuned for more because I’ll likely be reaching back out for feedback about some of the ideas we generate!

9 comments

  1. Hi Linda,
    I’m working on a similar project. My NGO like many others is looking to be self sustaining with some of their projects. I am in the process of developing a self sustaining business model for those projects. I would be very interested in learning about your experiences and share some of the ideas I have. The best with your assignment.

      1. You can call or Skype me. I’m back home in the US now. The rest of my PULSE assignment is local. I’ll be making my presentation and wrapping up in Baltimore, MD. My cell phone # is 443-538-5640

  2. It seems like many of us have a focus on fundraising in our projects with the NGO – as this is essential to their existence. I wonder if we can have a call about fundraising with volunteers working on it to share our ideas. I always believe in the power of a group brainstorming session!

  3. Great post Linda! Was great to see you and Dorothy this week, and I will definitely be at some of the upcoming Food Trust events!

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