Connecting Schools With Great Fundraising Ideas.

I know you’ve all been there before. Hours spent in front of an Excel spread sheet, thinking that maybe, just maybe, if you stare at it long enough, your bottom line will somehow transform from a negative to a positive number. It’s OK; we’ve all had those thoughts.

You’ve done your best to be conservative with your income projections and liberal with your expenses. You’ve looked at the marketing budget and thought, “Heck, I can design a website! Who needs to pay a professional designer?” You’ve done that with as many projects as you can. But, after a while, you really can’t cut anymore- not without completely sacrificing your mission.

Of course, you fundraise. You fundraise like crazy. You’ve got an annual golf outing, a silent auction, a cookie dough sale, and then there’s the yearly direct mail piece. You don’t think that your community can take yet another fundraising event. You don’t think YOU can take another fundraising event.

So, what are you to do?

I’ve been in this exact situation before. More than once. So I know what you are going through.

In two of these instances, we have decided to solve our problem by becoming very bold. Instead of cutting and cutting, we started to add completely new sources of income.

When I worked at a summer camp, we added mother/daughter and father/son weekends, which we hadn’t offered before. We also created a week-long adventure camp that mixed hiking, camping, canoeing, and a challenge ropes course. Then we opened our camp up to outside rental groups in the spring and the fall of each year, since we were not using it. This was a few years ago, but if I remember correctly, that first year, we added over $30,000 of brand new income, and that was after expenses. That extra money really came in handy at the end of the fiscal year!

I also worked as a principal of a private elementary school. We were in desperate need to raise money and had cut in every conceivable place. We didn’t think we could realistically increase enrollment anymore, so we looked to new sources of revenue. An opportunity presented itself, and we were able to rent out our gym/cafeteria to a local church that needed a meeting place. They paid $500 per month which came out to $6,000 for the year. I know $6,000 doesn’t sound like a lot, but we had no additional expenses, so it really was useful. (I probably could have charged more, but they were a church, so I gave ‘em a deal.)

We also had two portable classroom buildings that were not being used. We started to negotiate with a group who wanted to rent them for a Montessori school they were starting. Unfortunately, this never came to pass, as the group had some internal leadership problems, so they never got it off the ground. However, they were going to accept a rental fee of $1,000 per month, which would have brought us in an extra $12,000 per year. Expenses were minimal on our end for this, so it would have been very profitable.

It is important to note that the Internal Revenue Service might have something to say about this kind of “unrelated business income”. If they (the IRS) decide that too much of your total income is being derived from sources not tied to your tax exempt mission, they could impose a tax or you could even lose your 501(c)(3) status.  For instance, if you run a school, and you decide to open up a bookstore or an internet cafe, you might be crossing the line a little. 

Fortunately, I was never faced with this kind of review from the IRS, and even though I’m not an expert, it does seem like in both cases, we stayed pretty close to our original mission of being a camp and a school. However, if you have any desire to branch out into new sources of income, you might want to check with an accountant who specializes in non-profit tax law.

The key to adding this additional revenue is to make it as easy as possible. If you have to spend too much time or money launching the program and then running it, perhaps it’s not worth the hassle. When you are brainstorming ideas for this new income, try to make it a smooth fit, a natural flow, so you don’t get personally distracted from your true mission.

Maybe it’s just me, but after years of fundraising, it really felt good knowing that I was helping out our budget the “old fashioned way- we earned it!”

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