It’s true that earned income is usually ticket sales or course enrollment income, or some other program generated revenue.
Not much you can do about that – put ads in the weeklies, paper the local coffee
shops. But as a development guru, you’ll start thinking of all the combinations that can make earned income build on itself.
One of the classic manipulations of earned income is sometimes called the razor and blades strategy (a customer buys a razor at a higher one-time price and then continues to purchase the blade attachments over time at a lower price, hoping to amortize some of that larger initial investment).
In arts organizations, this is often how memberships work: you pay, for instance, a $60 annual membership fee, you receive a discount or free entry to all that year’s events.
Other classic strategies include, two-for-one discounts, pricing partnerships with complementary organizations or businesses, and timed pricing (such as matinees or free Tuesdays).
Think how your organization can benefit from different pricing strategies. How can you attract a broader audience with pricing? How can you develop a more loyal following? How can you inspire audience members who enjoy one of your organization’s activities to try a different one?
Earned Income and Social Entrepreneurship
If you hang around nonprofit gurus long enough you will start to hear about “Social Entrepreneurship” (SE). Your organization may one day seek to develop a business model that goes a step beyond simple earned income. Roughly, SE is the process of creating an income generating entity that, through innovative practices, is self-sustaining and supports your core mission.
Resources -- or more on SE and Earned Income: