The reality game show Survivor may have just wrapped up for another season, but for most nonprofit organizations, survival is a reality they face everyday. This is particularly true within the social services sector, where government cutbacks and restructured funding practices are creating additional challenges. That’s why some innovative organizations are taking a second look at what they are good at and finding new ways to generate revenue.

Take St. Christopher House, an agency that provides services to youth, families, disabled people and seniors in west-Central Toronto. In 2003, the board was facing the reality of closing or reducing programming to meet their budget. Instead of going that route, “the board asked us to look for other sources of funding,” recalls Odete Nascimento, director of the older adult centre. “We were good at home support. So, was there a for-profit parallel?” Knowledgeable volunteers and a group of University of Toronto students from the Rotman School of Business explored the feasibility of creating a cleaning business targeted at the growing number of condos and apartments in the King St. West area.

Around that time, Social Capital Partners provided startup funding – support that Nascimento said made the whole project possible. “There are initial expenses that were impossible for us without digging into program money and we were clear that whatever we did we would not use any of the existing program budgets to advance this project.” The startup funding allowed St. Christopher House to hire a business manager and invest in marketing for All Through the House, which officially opened just over a year ago.

Creative fundraising for creative programming

While All Through the House is a new venture, the founders of Ghost River Rediscovery knew right from the get-go, back in 1994, that they were going to need to sell services to support their cultural outdoor programming initiatives. Says Julian Norris, co-founder and coordinator of training and specialized services, “if you are going to do creative programming, you’ve got to be prepared to do creative fundraising. Most funders fund what’s already been done, they fund the status quo.” Adds co-founder and executive director Mike Lickers, “We pretty much knew from day one that we would have to be creative and innovative and look at different ways to generate income for scholarships and to maintain our organization.”

And that is exactly what they have done. With a current budget of $1.2 million, they generate between $80,000 and $150,000 per year providing aboriginal awareness training to corporations, the City of Calgary, and other agencies. Additional income comes from wilderness guide training, standard and wilderness first aid training, and canoe instructor courses.

Reassessing membership perks

Susan Thorning and Sue Davidson are also involved in the training game, though not the wilderness variety. They were both heavily involved in the founding of Capacity Builders, the training, consulting, and publication arm of the Ontario Community Support Association (OCSA). Thorning and Davidson discovered that in the United States there is a whole sector of organizations, primarily nonprofit, whose sole purpose is to support other nonprofits. The goal of Capacity Builders was much the same, except it needed to be entirely self-sufficient and generate revenue for OCSA.

“About eight years ago, our board took a look at all our sources of revenue and everything we did. We discovered that different parts of our membership used different parts of our services,” recalls Thorning. “The board decided there should be user fees for all services used voluntarily by members. For instance, advocacy is part of membership so membership fees should cover that, but membership fees should not be used to cover those things that agencies decide whether or not they will use – such as training.”

The reality check

Like any new business, the revenue comes slowly for nonprofit agencies that decide to charge for their services. Capacity Builders is now five years old and, at this point, it does not supply a tremendous amount of revenue, but it is entirely self-sufficient. All Through the House is slightly above target right now, however, they are still a long way from their final target. “But there is momentum and we’re growing,” Nascimento points out.

Although hiring a business manager was a big cost, Nascimento firmly believes that it is the right way to go. “In our sector, it is very difficult for us to think ‘for-profit’. We need to have someone from a business background who can think business. Plus, putting the responsibility for the business onto existing staff would be very difficult.”

Lickers feels that pull. One of the challenges he faces is that when he’s training, he’s away from the office and away from doing the programming he loves to do. But, as he notes, travelling also allows him to connect with potential new funding sources and a greater audience that’s interested in the work his organization does.

Selling services as a way to survive

So, is selling services the new reality for social service agencies that want to survive? Ruth Ramsden-Wood, president of the United Way of Calgary and Area, thinks it is. “Agencies rely on many sources of revenue to provide important front-line programs and services. These sources include individual donors, funders such as United Way, and corporate donations. Some agencies also use their expertise to generate additional revenue for their programs. As our communities continue to grow, the needs continue to increase. This is one more way an agency can provide vital services to people in need.”

Nascimento agrees, but points out that “we still have to be very careful that we don’t sell our soul. In our case, the target group is totally different than the client group we are serving in our nonprofit programs. They are young professionals and our expertise up to this point has been home support to seniors and people with disabilities. This is about responding to an opportunity.”

Since there are no immunity necklaces being handed out in the nonprofit sector, entrepreneurial social service agencies are beginning to market what they do well. In return, they are generating revenue to support their very important nonprofit programs and discovering new ways to ensure their survival.

Louise Chatterton Luchuk is a freelance writer and consultant who combines her love of writing with experience at the local, provincial and national levels of volunteer-involving organizations. For more information, visit www.luchuk.com.