How your NGO can sell products to earn income

Introduction

Your NGO feels stuck in the rat race- always chasing grant funding to guarantee that you can work on achieving your mission. Indeed, this is a trend that affects NGOs around the world- the never-ending cycle of sourcing for, applying for and competing with thousands of NGOs for scarce donor funding.

There are two problems with this model.

• First, your work might end up being entirely project-based instead of long-term programs that are most useful for your beneficiaries. Donor project funding is typically short-term- lasting 1-3 years, and highly restricted with specific goals and objectives. Besides, you can never guarantee a phase 2 of the donor-funded project irrespective of how well you perform on the first phase.
• Second, donor project funding rarely covers your full overheads- costs that ensure your organization can survive into the future. The Overhead myth is alive and well with donors expecting you to perform miracles by keeping your overheads to the barest minimum while spending all of the funding on program expenses.

You need to urgently begin exploring how to diversify your NGO’s income to ensure that you can continue to show up powerfully for your beneficiaries. One good means of diversification that I have designed for nonprofits is developing and selling products that align with their mission and generate consistent revenue for their work.

Why your NGO should sell products to diversify your income

Before you vigorously shake your head and argue that you are not for profit, take a moment to really question your assumptions. ?A non-profit does not mean that your NGO cannot generate revenue. It simply means that you cannot distribute profits for the board or shareholders the way a for-profit business would. ?

Did you know that earned income including selling of products is a crucial means of sustenance for NGOs just as yours? A 2024 Bridgespan study of the largest NGOs with more than $50m annual operating budgets revealed that earned income was the second highest source of revenue for these NGOs- even ranking higher than funding from foundations! ?Without earning income, you are losing out on a key income stream and compromising on your ability to be there for the long-term.

The good thing about selling products is they create a steady stream of income for your NGO. Moreover, the income that comes in is unrestricted unlike what most donors will give you. This means you can use the income to cover your much needed overheads such as paying decent salaries, communication and administrative costs.

Product Ideas for your NGOs

1. E-books: You can create short e-books that capture various aspects of your NGO’s expertise and sell them to your target market online. These e-books could be on your methodologies, insights generated from your work, and subject matter expertise. You can sell these e-books on mainstream stores such as Amazon or Selar.
2. Courses: Design and deliver engaging courses that provide value to your target audience. These courses could be delivered either online or in-person. They can center on your subject matter expertise, field experience, overview of your sector or key trends and developments. Several platforms exist for hosting your courses including Maven, Selar, e.t.c.
3. Merchandise: Create physical products and market them to the public and your target audience. The merchandise will create more affinity between you and the buyers who support your mission. The goods can be anything from branded wears, stationeries amongst others.
4. Mobile applications: Design mobile applications to deliver an exciting experience for people that buy into your mission. You can include in-app purchases such as subscriptions, donations, and opportunities to purchase merchandise.

How to sell products successfully

It is one thing for your NGO to put your products out there- it is another thing for them to be sold successfully. You also need to ensure that the sales come in consistently so it can grow to become a reliable income stream for your nonprofit. Here are the key things to bear in mind to successfully sell your NGO products:

1. Invest in marketing the products. You don’t want the products sitting on your NGO shelves. Carry out robust marketing campaigns using social media, emails, in-person exhibitions and using your networks.
2. Price effectively. Capture both the direct and indirect costs of producing the goods. Your product should be able to pay for the cost of creating it and generate substantial revenue afterwards.
3. Use human-centered design. Design the product with the end user in mind. What benefits can they get out of your product? How can you make it easy to use? How should they perceive and support your work after using the product?
4. Ensure smooth logistics. Ensure that the customer gets good value for me. Package the product well and determine how you will ship or get the product over to the consumer. Clearly communicate when the customer can expect the package and deliver it on time.

?Conclusion

Your NGO has enough expertise to design and deliver at least one kind of product successfully. To break your dependency on external grant funding which is not guaranteed, you need to leverage selling products to create an earned income stream for your nonprofit. This will help you generate consistent income that contributes to your nonprofit’s financial sustainability.

Get in touch to diversify your fundraising

The team at Travaille Ensemble and I are working to shift power to Global South NGOs for financial sustainability. Get in touch with us to diversify your funding streams, write your winning grants, train your NGO's team in fundraising, develop 2-3 year fundraising strategies and deliver donor prospect research. Book a FREE fundraising discovery call with us today.