05 June 2011

Revenue generation

The primary issue with raising revenue is doing so in a manner that is legal.
The secondary issue is generating that revenue.


Forty three states require a license, or other permission from the state, if an organization wants to solicit funds from the general public. The exceptions tend to be:
  • Religious organizations;
  • Bona fide educational institutions;
  • Solicitations for a specific, named individual or specific, named family;
The Unified Registration Statement is a simplified form of the paperwork that is required to be filled out.

 The IRS wants to collect taxes on the revenue you, or your organization raises.  The exception is if the organization has non-profit status, and does not engage in commercial activity. 

"Commercial activity" tends to be defined on a case by case basis. As a general rule of thumb, revenue raised by a 501(c)3 from sources other than grants, voluntary donations, membership dues, or reimbursement for services rendered is "commercial activity".


Grants can be useful in setting up an organization, and providing "seed money".  Relying on them for long term survival is a fairly good way to ensure that the organization does not survive.

Voluntary contributions is how most non-profits sustain themselves.  The two major downsides of this model are:
  • "Give us money" is the only mantra that outsiders hear;
  • The majority of revenue comes from very few people.  (In the typical church, five people contribute more than 80% of the church budget.)
Membership dues can provide financial stability.  Most non-profits provide several levels of membership, with different benefits and privileges.
Historically, churches assessed annual pew dues. This is a form of membership dues.


Reimbursement for services provided. This is most commonly found in health and educational institutions.  The concept can be extended to other institutions.

Other things:
  • Royalty payments for books, videos, images, or audio content, provided the distribution and sale of that content is done by third parties who operate at "an arm's length";
  • Affiliate sales of items, provided the sales are an incidental part of the operations of the organization. For brick and mortar institutions, the theory is that the sales pay their own way, and are done as a service/convenience for members of the organization.  However, if they generate too much revenue, then it becomes a "commercial activity", and needs to be controlled and conducted by a third party that operates at "an arm's length" from the non-profit;
Unfortunately, I do not have complete financial data for e-Sword-users.org.
However, based on the records I do have:
  • Grants: No revenue was generated this way;
  • Membership dues: No revenue was generated this way;
  • Voluntary contributions:  Roughly one third of the revenue was generated this way;
  • Affiliate sales: Revenue came from three sources:
    • Amazon: A nominal amount of revenue was generated this way;
    • CBD: A nominal amount of revenue was generated this way;
    • Ben's e-Sword Tool: Premium Edition: Roughly two thirds of the revenue was generated this way;
For a self-sustaining foundation, the following appear to be the most viable propositions:
  • Grant: A one time grant to organize as a non-profit organization, and obtain 501(c)(3) status. This grant should be for roughly US$10,000;
  • Voluntary Contributions: This would be a tip jar.
  • Membership Dues: Various levels of membership:
  • Affiliate Sales: On each page that describes a resource, there will be links to Amazon, Christian Book Distributors, and other appropriate vendors, to purchase the resource in another format. Once 501(c)(3) status has been obtained, GoodSearch is another possible affiliate;
  • Web Forum: Various levels of membership:
    • Basic membership: Free.  Can post messages, download resources, and upload content: No voting privileges or rights;
    • Site membership: Can post messages, upload resources, download resources, have their own blog, voting privileges and rights;
    • Honorary membership: Free: Same as site membership except for no voting privileges or rights;
  • Conferences: Hold periodic training seminars, and conventions in different parts of the world. 
    • Conventions:
      • Regional: (These are examples)
        • North Island;
        • Pacific Northwest;
        • Lake Country Region;
        • Western Cape;
        • Gold Coast;
      • National: (These are examples)
        • United States of America;
        • New Zealand;
        • Australia;
        • Singapore;
        • Scotland;
        • Canary Islands;
    • Training Seminars:
      • Software specific:
        • How to use the program;
        • How to create resources for the program;
      • Generic
        • Bible Study Methods applied to Biblical Software;
          • There are at least 250 different ways of studying the Bible;
        • Prayer Warriors using Biblical Software;
        • Bible Translation and Biblical Software;
        • Original language Bible Study;
  •  Resources
    • Create resources for various Bible Study Software programs and eBook formats;
      • Some resources will be sold;
      • Some resources will be given away gratis;
    • Original resources will be created;
    • Content in the public domain will be converted;
    • Some content will be translated;
    • Some content will be used to create derivative works;

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