Reconsidering Your Organization’s Income Mix
Hello Tangelo Tree Community,
This week we wanted to share our thoughts on reconsidering your organization’s income mix in 2025. As part of our 2025 Financial Strategy series, we hope you find some useful insight into how we are seeing financial strategy in today’s uncertain environment.
Four questions to shape your organization’s financial strategy
In our earlier newsletter, we introduced our approach to financial strategy as a process of making decisions about how to bring in and use resources to advance your organization’s strategic priorities. Today, we’re resuming our series on organizational strategy, financial strategy, and multi-year financial projections.
Organizational Strategy
Mission and Vision
Values
Differentiating Strengths
Strategic Priorities
Financial Strategy
What is our optimal income mix?
What is our most effective use of resources?
Multi-Year Financial Projections
Identify income and expense drivers
Connect with different strategic pathways
When thinking about these questions, you may also find this tool that Tangelo Tree developed useful!
Organizational strategy sets the overall direction for your organization and gives you bearings. Financial strategy further propels your organization in the direction set by your organizational strategy by framing revenue generation and expenses as a set of strategic choices. This newsletter offers a practical way to analyze and make decisions to optimize your organization’s income mix because—as Clara Miller and Jon Pratt have each incisively observed of nonprofit finance—a dollar is never just a dollar.
Reconsidering Your Organization’s Income Mix
Focusing your revenue generation efforts in the areas that best suit your organizational strategy and your ideal levels of autonomy, reliability, administrative capacity, and opportunity will keep your organization’s financial strategy sails in good trim and keep you from getting blown off course in the mighty winds of 2025. While organizations have been battling the harsh winds, having a financial strategy to work in tandem with your organizational strategy during these times of uncertainty will help you correct course each time your organization is dealt an unexpected blow. Reconsidering your organization’s income mix to meet this moment will be vital. By using the following questions, you may be able to identify the optimal reconsidering of your income mix, especially if you are facing a loss of funding under the current administration.
Consider these four questions—as they may support your revenue generation in this time that many funds are being cut:
Autonomy: How much freedom will the organization have in deciding how to use the funds?
Reliability: What is the likelihood of securing the funds? What about on a recurring basis?
Administrative Burden: What will it cost to obtain and manage the funds?
Opportunity: How transformative could this level of funds be in sustaining and/or growing the organization’s work?
Navigating your organization’s financial waters is not meant to be a solo journey, and we can guarantee that no matter what you may be facing, other organizations are almost certainly facing something similar. While we spend our days supporting organizations through this moment, we want you to know that you are not alone, as we are seeing – on a daily basis – that many organizations are facing troubling waters around funding. Our team at Tangelo Tree Consulting has seen, time and again, that good decisions are rooted in engaged decision making processes. This, in turn, sets the stage for more effective implementation and ability to manage organizational change.
These questions can unlock crucial conversations about the merits of different revenue streams, setting priorities, and aligning organizational capacities and infrastructure (staffing, systems, etc.) to specific financial strategies. It may even lead to deprioritizing some revenue sources altogether. You are likely faced with the potential loss of federal funding, and you may need to find more revenue in an ever shrinking pool of funds, furthering the argument to find your optimal income mix. In the past, we have used these questions to generally find an optimal income mix; however, in 2025, we urge organizations to use these questions to reconsider their income mix in the face of potentially losing federal dollars.
One executive leader told us that using these questions with their board helped the board get to consensus on prioritizing one revenue source and actively dropping another. This was done while understanding exactly why they were doing so, making it not just about gaining buy-in but seeing an actual transformation in thinking to support this meaningful change.
Making Financial Strategy Part of Every Strategy Conversation
We have seen organizations successfully use these four questions with small groups in various contexts, from a finance working group of half a dozen people, to a strategy retreat with board and staff, to starting with the board finance committee and then bringing it to the full staff and board leadership team.
Even if you do the first heavy lift with your finance team, open it up to others to acculturate these conversations more broadly across the organization. The big payoff is when these four questions become part of the organizational culture and find their way into all of your strategic conversations, making your decision making that much richer.
In our next newsletter, we’ll dig into how multi-year financial projections put your strategy into practice. Don’t miss it!
With Care,
Tangelo Tree Consulting
Check out an upcoming event that the Minnesota Council of Nonprofits and Tangelo Tree Consulting will be presenting:
Designing for Strategy: Financial Modeling as Scenario Planning
April 17, 2025
Event Description:
Learn to shrink your organization’s response lag between potential challenge and necessary action through multi-scenario financial modeling. Join Tangelo Tree Consulting to cover the top design considerations when creating a financial plan rooted in strategy. Leave the session with a planning template on how to continue collaboratively enacting these principles in your work.
Learning Objectives
Understand financial modeling as a strategic response to potential risk
Describe key design elements of muti-scenario plans & aspects every model needs
Describe how to begin adapting data presentation to meet different audiences needs (ex. boards)
Feel capable and prepared to initiate a collaborative financial scenario planning process
Audience
Ideal for mid-sized nonprofit staff with a portion of their job designated to supporting financial operations.
Event Details
This virtual event will take place on the Zoom platform. Your access link will be emailed to you the day before the event after 12 p.m. This session will be recorded. The recording will be made available to registrants after the live event. Captioning is provided automatically through Zoom. For information on requesting CART, ASL, or another accommodation, please visit MCN’s Registration Policies page.