The economic downturn that began officially in the Fall of 2007 is slowly coming out of its two-plus year grind in the US.  Among those I’ve had the honor to serve, there are winners and losers during this time. Some clients are stronger and in a better market position and some in weakened positions or gone altogether.

The winners are invariably those with the most diversified revenue streams and a strong commitment to keeping revenues in a balanced proportion.

The best example is Community Anti-Drug Coalitions of America or CADCA .  CADCA was a creation of the George HW Bush administration with funding from the Robert Wood Johnson Foundation and the James S. & John L. Knight Foundations and operated for several years almost exclusively on foundation grants of significant size.  CADCA has grown from a $1.5 million operation in the mid-1990s when I first began working with them to a $9 million national leader in substance abuse prevention and community problem solving.

Led by a team of very capable and experienced senior managers (also a deliberate choice of its Board and Chairman/CEO), CADCA  has seen its reliance on foundation funding drop from 90% of its revenues in 1997 to around 8%. Its unrestricted support is greater than its foundation supports and 80% of its funding comes from training fees, events, state contracts, federal contracts, corporate donations and membership dues.  International programming, new to CADCA at the beginning of the recession in late 2007 is now generating more than 10% of revenues.

Any one of these could diminish and the others are positioned to pick up the slack.  As CADCA re-invests revenues in continually improving its offerings to community leaders, states, federal agencies and supporters, its revenues grow as they sponsor or purchase services.

This financial strength was due to deliberate planning, consistent and focused leadership, experienced and patient senior staff and Board members.  Major General Arthur T. Dean earned much of the credit for his leadership as CEO and Chairman of the last ten years, but it was also the commitment and dedication of several senior managers building their individual units simultaneously that made CADCA’s market leadership possible.

Other organizations can do the same if they commit to an optimal revenue mix and stay true to achieving that mix.  Over-reliance on any one source of revenue in non-profits as in business can lead to very tough times when that one source weakens.

For help in thinking through a plan to achieve optimal revenue mix, please contact Bauler Consulting at 508-405-0308.