Exploring the Differences Between Earned Revenue and Fundraising

Understanding the difference between earned revenue and fundraising can be one of the determining factors for organizational sustainability. This resource guide will explore the difference between earned revenue and fundraising, and provide a breakdown of the pros and cons for each source of income.

Earned revenue is defined as the income an organization generates through the sale of goods or services. Examples:

• Sales of merchandise or products
• Fees charged for services, such as consulting or training
• Membership fees for access to exclusive benefits or courses
• Revenue generated from a website or publication

Pros and Cons:

Pros:

• Earned revenue is predictable and may provide a stable source of income.
• It allows organizations to maintain control over their financial operations.
• It can be used to offset the costs of providing goods or services.

Cons:

• The overhead costs of providing goods and/or services can be expensive.
• It may be challenging to scale earned revenue, which may limit the potential for growth.

Fundraising is defined as the process of soliciting donations or contributions from individuals, corporations, or foundations to support an organization’s mission. Examples:

• Annual giving campaigns
• Major gifts from donors
• Grants from foundations or government agencies
• Corporate sponsorships or partnerships
• Crowdfunding campaigns

Pros and Cons:

Pros:

• Fundraising may provide a significant source of income for non-profit organizations.
• It can support initiatives that may not be feasible with earned revenue alone.
• It can be used to build relationships with donors and supporters.

Cons:

• Fundraising can be unpredictable, with donations varying from year to year.
• Fundraising can be subject to economic and market conditions, which can impact giving.