Earned income is growing in importance as a source of funding in the social sector: Today, more than half of the average social sector income is generated through market activities, such as membership dues, fees for service and product sales – most organizations offer products and services to diversify their income streams, despite some public skepticism about any funding beyond grants and sponsorship.
With greater competition from private players and a growing need for planning reliability, organizations in the social sector are required to adapt to best practices of the private sector. Likewise, it is increasingly important to demonstrate social returns on investment to and be accountable towards funders, such as foundations, governments, and major donors. As this process of professionalization continues, the need for expert knowledge to bridge the gap between the social and private sectors only increases.
Applying its 30 years of experience in the development of revenue and optimization strategies, Simon-Kucher provides innovative solutions tailored to the specific requirements of the social sector. Our focus is on combining best practices of the private sector with the social objectives of our clients. We successfully balance market principles with sector-specific challenges, such as resource scarcity, legal obligations, and institutional culture, to generate value in multiple areas including:
- Portfolio design and optimization: "Which services can support both our mission and our financial needs?"
- Earned income and sustainability: "How can we become more financially independent without sacrificing our mission?"
- Pay for performance: "How can we ensure we are adequately remunerated for the added value we provide?" "How can we differentiate between willingness-to-pay and ability-to-pay?"
- Value communication: "How can we strengthen our income without reducing our credibility?"
- Sustainable metrics: "How can performance and ROI be enhanced with social KPIs (e.g. SROI)?"
Simon-Kucher supports social sector organizations, nonprofits, and membership associations on these and other topics to ensure sustainable earned income in line with their charitable mission.