Part 2: Earned Revenue – From Idea to Action

In the first post in this series, we explored the opportunity for nonprofits to rethink the role of grants, introducing revenue generation as a way to diversify funding, increase unrestricted revenue, and build greater financial resilience. For many organizations, the idea of earned revenue can feel unfamiliar or uncomfortable, raising important questions about how to maintain mission focus, protect impact, and ensure accessibility. Addressing these questions often requires a broader cultural shift that creates space for new ideas while staying grounded in core values. When organizations begin to see earned revenue as a tool for impact rather than a departure from mission, new possibilities start to emerge.

Once your organization can imagine what is possible, a practical question follows: How do you move toward integrating earned revenue, while mitigating risks and staying true to mission? This post focuses on how nonprofits can test earned revenue ideas thoughtfully and responsibly, before investing significant time, money, or organizational capacity.

1. Start with feasibility and “product-market fit”

At the heart of any earned revenue idea is the concept of product-market fit, which asks whether you are offering something people want and need, and are willing to pay for, at a price that generates more revenue than it costs to deliver. For nonprofits especially, product-market fit goes beyond revenue alone.

It includes asking:

• Who is this for?
• What problem does it solve?
• Why would someone choose this over other options?
• Does this align with our mission, values, and accessibility commitments?

Feasibility work helps answer these questions early. It is important to research market demand, pricing, competition, internal capacity, and mission alignment. Just as importantly, feasibility assessments can help organizations decide when not to move forward, which can be a success in and of itself.

2. Pilot before you scale

One of the most common pitfalls in earned revenue is trying to build a full program or enterprise before testing whether it works. Piloting allows organizations to start small, learn quickly, and adapt based on real feedback.

Rather than launching a fully developed service, a pilot might involve:

• Offering a limited number of paid sessions
• Testing a simplified version of a product
• Partnering with a small group of early adopters
• Running a time-bound trial with clear learning goals

Pilots help surface critical insights. You learn what resonates, what does not, what it costs to deliver, and what kind of demand actually exists. This information is invaluable before making decisions about growth or investment.

3. Use simple tools to guide learning and iteration

Starting small and using structured tools can make experimentation more manageable and less overwhelming. Two commonly used approaches are lean experimentation and the Business Model Canvas.

Lean experimentation focuses on learning through small, intentional tests. Rather than assuming an idea will work, organizations design experiments to answer specific questions, gather feedback from customers or partners, and adapt based on what they learn. This reflects a reality many nonprofit leaders know well: that almost nothing goes according to plan!

A Business Model Canvas can also be helpful at this stage. It offers a simple way to map out who your customers are, what value you offer, how revenue flows, what costs are involved, and what resources are required. Seeing these elements together helps teams understand the full picture and identify gaps or risks early.

There are many business model and experimentation templates available online that can help organizations think through earned revenue ideas. Thriving Non-Profits has also developed a range of practical tools and worksheets to support nonprofits in this work. Organizations taking their first steps can access our free introductory course and resource library, which includes templates, guides, and planning tools available with a free sign-up.

4. Grants can fund this work, too

Developing earned revenue strategies can challenge longstanding beliefs about what it means to be a nonprofit, and it often asks leaders to stretch beyond their traditional areas of expertise. This is where grants can once again play a powerful role. In part one of this series, we looked at how program grants can support piloting new initiatives with an earned revenue component. Capacity-building grants, on the other hand, can resource leadership and governance training, feasibility studies, business planning and financial modelling - to help assess viability, mitigate risk, and turn ideas into clear, actionable plans. 

Using grant research tools like Grant Connect can make it easier to identify grants that align with this kind of work, to build capacity within your organization, or tap into expertise you may not have internally. When used strategically, grants can fund the groundwork needed to build earned revenue in a way that is thoughtful and stays true to your organization's mission.

5. Fee-for-service or social enterprise – what’s the difference? 

Fee-for-service and social enterprise are two common approaches to earned revenue, and the tools described above can support both. While they are often discussed together, they function differently in practice. For example, a food security organization might charge a fee for gardening workshops as part of its core programming, or it might launch an edible landscaping business as a separate social enterprise.

Fee-for-service strategies typically involve programs or services that directly deliver on an organization’s mission and are managed within the nonprofit itself. This might include adding a fee to an existing program, offering a service to a different audience that can afford to pay, or adapting a successful grant-funded program into a paid offering.

A social enterprise, by contrast, is often a separate business activity. Social enterprises usually have distinct accounting and staffing, and generate revenue to support an organization’s mission without needing to directly deliver programs. They are designed to achieve environmental, social, or cultural impact alongside financial performance, and while profit is not the sole purpose, it remains foundational to long-term success. Common examples include thrift stores, cafés, or service-based businesses operated by charities.

Because these approaches involve different legal, financial, and governance considerations, it is important to understand the implications early on. When you are ready to move forward, it is also important to speak with a lawyer or accountant who has experience working with nonprofits and social enterprises.

6. Social enterprise acquisition: Start earning revenue right away!

One option worth mentioning is the opportunity to purchase an existing business and transition it into a social enterprise. There is a growing opportunity in this area, sometimes referred to as the “silver tsunami,” as many small business owners approach retirement without clear succession plans. Acquiring an existing business can offer:

• An established revenue model
• Existing customers and cash flow
• Proven operations and systems
• A faster path to impact than starting from scratch

Of course, acquisition comes with its own risks and complexities, including financing, governance, and change management. This is where feasibility analysis, financial modelling, and strong governance structures become especially important. 

Looking ahead

Whether launching a new earned revenue stream, piloting a fee-for-service program, or exploring the acquisition of a social enterprise, it is critical to remember one thing: These initiatives require time, expertise, and often capital. They cannot be managed off the side of the Executive Director’s desk. 

In the final post in this series, we will explore what it means to be investment ready, and how nonprofits can access capital to support earned revenue, growth, or acquisition. Stay tuned as we demystify investment readiness and explore how capital, when aligned with mission, can help nonprofits increase their impact and shift systems for the long term.

Curious to learn more? Visit thrivingnonprofits.ca to access courses, resources, and expert support to build your non-profit’s financial resilience.