As association and not-for-profit leaders know, non-dues revenues provide more than just a financial boost to an organization. They are essential to driving value, resilience, innovation, and long-term viability. By investing time and effort into building diverse revenue streams, organizations can do so much more than just survive. They can thrive and focus on what truly matters—advancing their mission and serving their communities.  So, before your organization can further diversify your non-dues revenues, taking a step back to assess your current financial situation is valuable. Knowing where your revenue comes from and identifying potential gaps is a crucial starting point for building a more robust revenue model. This process not only helps you understand where you are excelling but also highlights areas of promise and potential. 

The first step in this assessment is to conduct a thorough review of existing revenue streams. Start by listing out every revenue stream your organization currently relies on. This could include membership dues, sponsorships, fundraising events, product sales, grants, and partnerships. Be sure to consider both recurring and one-time sources of income.

Next, evaluate the performance of each revenue stream. How much does each contribute to your overall budget? Is it stable and predictable, or does it fluctuate year to year? For example, if a fundraising event brings in a significant amount of revenue but requires substantial effort and has inconsistent returns, it may not be as reliable as a recurring sponsorship deal or product sales.

Once you have an overview of your revenue streams, compare the performance of each stream against industry standards or internal goals. If you already have financial benchmarks, evaluate how well you are meeting them. Are you on track, underperforming, or over-relying on certain streams?

For organizations without benchmarks, it is useful to set some at this stage. These could be based on historical data, growth projections, or a combination of both. Establishing what "success" looks like for each revenue stream will help in the next phase of the gap analysis.

With your revenue streams mapped out and performance benchmarks established, the gap analysis can begin. The goal of this process is to determine where there are gaps between your organization’s current financial status and where you need or want to be.

Start by identifying areas of underperformance. Are certain revenue streams falling short of expectations? For instance, if your merchandise sales are generating far less income than expected, this may indicate a need to revisit your sales strategy, product offerings, or marketing efforts. Perhaps you’re too reliant on one-time fundraising events, which creates unpredictability and financial instability.

Beyond identifying underperforming streams, a gap analysis also involves spotting missing opportunities. Are there potential revenue streams you’ve yet to explore? For example, if your organization has never pursued corporate partnerships or explored digital fundraising campaigns, these may represent gaps in your current strategy that could be filled to enhance overall financial performance.

Once you’ve identified the gaps, it is helpful to categorize them for clarity. Some gaps may reflect internal issues, such as ineffective marketing of a particular event or program, while others may be external factors like market saturation or economic downturns.

For internal gaps, consider whether adjustments in staff, resources, or strategy could close the gap. For external gaps, think about whether it is worth continuing to invest in that particular stream or whether your efforts could be better spent developing new, more promising opportunities.

Finally, create a plan for addressing the gaps you’ve identified. This plan should include concrete steps for improving underperforming revenue streams and exploring new opportunities. For example:

• If event sponsorship revenue is underperforming, you might explore expanding your sponsorship packages, reaching out to new potential sponsors, or enhancing the event's value proposition.
• If you haven’t yet tapped into digital fundraising, you might consider develoing a plan for launching an online campaign.

The key is to take a focused approach, prioritizing high-potential areas for improvement or expansion.

Conducting a gap analysis is a powerful tool that helps you make informed decisions about your revenue streams. By thoroughly reviewing current performance, setting benchmarks, identifying gaps, and developing a plan to address them, you are setting the stage for your organization’s financial success.  Once this groundwork is laid, you can begin setting specific, measurable goals for enhancing your non-dues revenues.