Can A Not For Profit Charge For Services

Tin a nonprofit charge for its services? During difficult economic times – similar the global COVID-nineteen pandemic – this is a question we get oft. The respond is yes , but as with all fund development planning, this should be undertaken with peachy care. (*Annotation – we ever recommend diversifying your funding streams! Fee for services should only be one piece of your overall funding program. Learn more than about this in our free fundraising toolkit and blog).

Did you know? 80 cents of every dollar of nonprofit revenue in the United States comes from government grants or contracts and fees for service.

A fee-for-service structure means fees are paid in return for services delivered. Nonprofits can utilize fees for service and contracts to supplement their funding. Examples of this include charging for summer camp, child care, therapy, job training, etc. These services may charge an hourly or fixed charge per unit.

Getting paid directly for what your organization is already doing to fulfill its mission also confirms that your work has the outcomes that people value. You get to ready the rate and make the telephone call on what is included or non included, and there'due south potential to have secure funding year after twelvemonth.

However, there are some disadvantages to this funding model. Nonprofits must exist sure to avoid negative tax implications, comply with applicable state and federal regulations, and provide conscientious fiscal direction and accounting of fee for service and contractual activities.

Use Your Information

Consider these steps to determine if a fee for service model is a good fit for your organization:

Review your programs and services to see if they can be monetized.
Complete market research to encounter if other organizations in your industry charge for their services and dissimilar rates/payment structures. Once identified, so determine if that model could work for your organization.
Review your financial statements to run into if you have a good understanding of your costs for services to determine a potential rate or fee structure.
Reflect on your clients to see if offering a fee-for-service option will aid increase your reach or limit appointment.

Pro Tip:Spend time defining and clarifying your organization'southward value proposition or an easy-to-understand reason why someone should pay for your service. Your value proposition should clearly explain how your organisation fills a demand, communicates the specifics of its added benefit, and clearly states the reason why it's better than similar organizations.

Customs Need + Your Unique Value & Expertise = Potential Fee for Service Opportunity

There are many opportunities are out there for to ready fee for service or contract service structures for your nonprofit organisation. Need aid thinking exterior the box? We would love to brainstorm options! Contact usa today for a free consultation. If you're not ready to make a phone call, bank check out our free resources to outset diversifying and growing your funding streams.