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There's more pressure than ever before to find new ways for nonprofits to make money.
It’s been a couple of years since Managing Your Nonprofit for Resilience was published in late 2022, and the landscape for nonprofit revenue models continues to evolve. Let’s assess how the context has shifted through 2025.
As has been covered in gory detail on this blog (see here and in this series), 2025 has been a policy Armageddon for the nonprofit sector. The Trump Administration has slashed funding, vilified nonprofits, and attempted to restrict nonprofits to his ideological preferences. The pressure to find other sources of funding have therefore increased across the board. (One might say that only nonprofits receiving federal funds or acting in ways Trump doesn't like are put at risk. That is profoundly mistaken. When one source of a nonprofit's funding dries up, it turns to the same well from which other nonprofits draw sustenance.)
The narrative in philanthropy has continued to tilt toward “sustainability” and business-like approaches. Many funders increasingly ask, “What’s your plan to sustain this program without our money?” There’s an implicit push for nonprofits to act more like startups. Some nonprofits report feeling that earned income models are now viewed as the gold standard by funders. This can create a dangerous incentive: nonprofits might shift focus from social impact to looking more “viable” as enterprises, just to reassure funders.
On the positive side, there’s growing awareness about not pushing every charity down this path. Voices in the sector (including this blog series) have been candid that earned revenue is not a panacea for everyone. But the broader philanthropic mindset in 2025 still celebrates innovation and entrepreneurial spirit. Social entrepreneurship conferences, impact investing funds, and venture philanthropy networks have only grown. Many foundations have launched capacity-building grants to help nonprofits develop revenue-generating skills. In sum, the pressure to be “entrepreneurial” hasn’t gone away; it’s arguably more normalized now, for better or worse.
Since 2022, more nonprofits have indeed experimented with earned income ventures. This ranges from small human service agencies starting thrift stores or cafes, to larger nonprofits spinning off social enterprises related to their mission. Globally, the scale of social enterprise is enormous. An estimated 10 million social enterprises worldwide now generate around $2 trillion in revenue annually and 200 million jobs.
In the U.S., earned income (primarily fees for services) was always a big piece of the nonprofit sector’s pie. Approximately half of all nonprofit revenue originates from fees for services, totaling over $1 trillion annually, but it must be noted that this revenue is primarily concentrated in sectors like healthcare and education. What’s new is that smaller and mid-sized nonprofits outside those fields are feeling compelled to get in on the action. Post-pandemic, organizations that once relied heavily on special events or a handful of grants have been piloting things like consulting services, product sales, or training programs to create new income. Some have found success, especially when the revenue activity is highly embedded in their mission (for example, a workforce development nonprofit launching a business that trains and employs its clients can advance mission and earn income). Others have learned the hard way that the market can be unforgiving.
From our analysis, the pressure to diversify revenue has only intensified, making the challenge in many ways more acute now. Traditional funding streams have not rebounded; if anything, economic and political trends have made them more uncertain. That means more nonprofit leaders feel even more pinch and the accompanying temptation to try something new.
On the ground, we see more awareness of the pitfalls, which is an improvement in knowledge, but also more organizations are feeling forced into action, which can lead to hasty decisions. Financial pressures in 2025 are very real; just ask any nonprofit CFO struggling with rising rents, salaries, and insurance costs while trying to avoid program cuts. If anything, the urgency to find new funding sources is higher, which can lead to more risk-taking. The stakes are higher, too. When you have slim margins, a failed revenue experiment can hurt your finances badly. Conversely, ignoring diversification might leave you vulnerable to funding cuts.
In short, the challenge has evolved but not diminished. It has worsened in the sense that the external funding climate is tougher and pushing more nonprofits to the edge. It has improved only in that we have more case studies to learn from, and a growing toolkit of best practices to manage the risks. That’s exactly why a resilience-focused approach is critical, so you can thoughtfully navigate the situation of needing new revenue and avoiding mission failure.
Risk Alternatives enhances the resilience and sustainability of nonprofits through comprehensive tools, training, and support. For inquiries about conducting a risk inventory or other matters, please contact Risk Alternatives at info@tedbilich.com.