Identify and Optimize Nonprofit Earned Income: A Conversation with Alexandra Black-Paulick of Nonprofits for the Future : Successful Nonprofits

Episode 81

Identify and Optimize Nonprofit Earned Income: A Conversation with Alexandra Black-Paulick of Nonprofits for the Future

Listen on  iTunes    Android     Stitcher    Libsyn

Episode 81

Identify and Optimize Nonprofit Earned Income: A Conversation with Alexandra Black-Paulick of Nonprofits for the Future

Listen on  iTunes    Android     Stitcher    Libsyn

by goldenburggroup

Pursuing earned income strategies is like starting a mini business.

Serial entrepreneur Alexandra Black-Paulick talks with Dolph about earned income strategies for nonprofits. Identifying and maximizing earned income opportunities can increase revenue, deepen impact, and sharpen your nonprofit’s competitive edge.

*****Timestamped Highlights*****

(2:35) What is earned income?
(4:25) Alexandra distinguishes related and unrelated income
(6:00) Assess your assets and gaps
(7:19) What we can learn from Focus Points and Comal Heritage Food Incubator
(12:00) Common mistakes
(14:10) Tips for maintaining earned income strategies
(15:00) Keeping your donors’ support while pursuing earned income opportunities

Maximize earned income strategies by creating revenue while deepening impact.

(24:15) Remember to consider unintended consequences…
(28:41) Boosting earned income strategies by renting out space
(29:50) Free is not always better!
(35:50) Alex and Dolph discuss the best luggage for international travel

Links:

Nonprofits for the Future: www.nonprofitsforthefuture.com
Positive Impact-Media: http://positiveimpact-media.com/
Focus Point: https://www.focuspoints.org/
Friends for Youth: https://www.friendsforyouth.org/
Bikes Together: http://bikestogether.org/
Alexandra’s Positive Impact Media Twitter: https://twitter.com/impact_podcast?lang=en
Alexandra’s Facebook: https://www.facebook.com/alexandra.black.146
Alexandra’s LinkedIn: https://www.linkedin.com/in/alexandrablack88/


Read the Transcript for Episode 81 Below or Click Here!

Tips to maximize earned income strategies:
-Explore unintended consequences
-Rent out space
-Know that free is not always better

Dolph Goldenburg: Welcome to the Successful Nonprofits™ Podcast. I’m your host Dolph Goldenburg, and if I’m doing my math right, this will be episode 80, 81 or 82 of the Successful Nonprofits Podcast, and I love having energetic, exciting guests. At episode 82, I still do not tire of doing this, and today, we are going to be chatting about earned income strategies with serial entrepreneur Alexandra Black-Paulick. Alexandra’s career spans both the nonprofit and for-profit sectors, but one thing holds true throughout her entire career. She is an extraordinary marketer, brand developer and businessperson. Today, Alex is the strategist behind Positive Impact Media and has also just launched a brand-new website www.nonprofitsforthefuture.com. What we’re going to be talking with Alex about today is earned-income strategies. Over the last 82 episodes, we’ve only had one other show under earned-income strategies, so we need to be doing some ketchup and we’ve got a great person to share this information with us today. If your organization could use some more money that does not come with foundation or government restrictions – and I think that’s probably every organization that’s listening – make a cup of tea and get ready for this conversation with Alexandra Black-Paulick about earned income strategies.

Hey, welcome to the podcast, Alex.

Alexandra Black-Paulick: I am so excited to be here. This is going to be a fun conversation.

Dolph Goldenburg: Well, thank you. I’m looking forward to it, and we started this call about 17 minutes ago, and we’re just now getting on it because I felt like you and I were just grooving so much, and finally, I thought we have to hit record. We’ve got to have other people hear what we’re talking about.

Alexandra Black-Paulick: Right? Because we just hit it off so easily, and that was just phenomenal. But you’re right. I’m glad we’re recording and actually sharing this information now.

Dolph Goldenburg: Exactly. If we can start with a really basic step, I would be willing to bet that the vast majority of our audience is familiar with the concept of earned-income strategies, but can you give the 45-second primer before we launch into the main conversation?

Alexandra Black-Paulick: A lot of nonprofits come with restrictions, and there’s a lot of stigmas and should do’s. One of those big ones is around this idea of “Can a nonprofit actually make money?” Yes, they can. Nonprofit is actually a tax status; it’s not your business plan. That said, the IRS and the government has outlined certain restrictions around how you create income, which is your related or unrelated income. What we’re going to talk about today is all 100 percent around that idea of related income, where it is income that is tied directly to your mission and deepening impact, which the IRS gives their stamp of approval on. Granted, you should talk to an accountant or tax professional to kind of clear up any of the vague things that the IRS has. We want to create opportunities that nonprofits are creating revenue while deepening impact.

Dolph Goldenburg: You and I are so on the same page. I was about to say neither you nor I are accountants. We’re not providing accounting, tax or legal advice. I always have the disclaimer at the end, but whenever we start talking about things like that, you know, I’m always really clear that if you think you need to counsel on this, you need to go find a qualified accountant or CPA to help you out with it.

Alexandra Black-Paulick: And they’re always worth their weight in gold. I have an accountant who is a lifesaver.

Dolph Goldenburg: My business was audited for 2015, and they questioned every, literally every single expense I ended the audit was zero changes. I was like, okay, I got the best accountant in the world. I think my accountant is better than Donald Trump’s account!

Let’s talk about the difference between related and unrelated income.

Alexandra Black-Paulick: That’s a really great differential because a lot of times nonprofits are exploring different types of revenue. They’re like selling books or having fundraisers. Granted, your fundraisers that are a little bit different category, but these are just kind of your money generators. Again, it’s not hitting that mission; it’s not aligned with your overall goal. If you were to look at that and say you’re selling books, and you’re an organization that helps with youth, is selling books helping youth? At its face value, not so much, but this is where things get a little wishy-washy. If you’re having youth sell books to learn leadership skills, then it kind of is a little bit more mission aligned. That said, it’s a murky area. What I want to really focus on is where that relation between mission income is super obvious, and there are so many amazing organizations out there, some of which who are actually achieving their mission better through some of their earned income opportunities or the way that they’ve structured this than some of the programs that they had before. That’s the sweet spot because you’re hitting that unrestricted funds that go back into your mission.

Dolph Goldenburg: If an organization is interested in finding a way to earn some of their income, what are good ways for them to identify the right earned-income opportunity for them?

Alexandra Black-Paulick: Well, so at Nonprofits for the Future, what my partner and I have kind of created as a curriculum that walks you through this. The easiest and best place to start is with current assets. You have so many organizations are building curriculum, developing programs, developing software or apps, and they are directly aligned with their mission because they were supporting the mission initially, right? Organizations across the US have built so many things that they’ve built on over time to execute their mission. Those are the best places to start because a) you already habit, so your startup costs are going to be a lot less because you’ve already built it. You’ve to some extent tried it, and now it’s just identifying other individuals who would find value in that service. That’s the best place to start. Another really good place to start is looking at gaps either in your organization, which is a very humbling process, or where you guys offer services, and another organization offers services, and it’s just there’s not a bridge in between those two areas. Those are the easiest places to start

Dolph Goldenburg: Can you give some specific examples? If you are a homeless service organization, and you’re helping people who are homeless get jobs, if you were to start a temporary staffing agency, then that would be mission-aligned, but do you have some other examples?

Alexandra Black-Paulick: There is an organization in Denver, Colorado called Focus Points, and they’re a very large nonprofit. They sort of have that umbrella mission where they’re working within a community, and they’re helping foster better communities. They have a great mission to work with because like what doesn’t fall under. There’s an amazing woman named Slatvia. She ran the development, so workforce division or workforce and development, and her mission was to help people get better employment opportunities and better sustain their families and have all of this great economic freedom. She wasn’t accomplishing that the way she wanted to in her organization. Her programs just weren’t moving the needle.

You talk about standing in between the for-profit and the nonprofit world like she’s right there. She decided that she was going to start the Komal Heritage Food Incubator, which at its core is a restaurant, but this isn’t just any restaurant. It’s also a training program that they work with the families that they serve and its predominantly women. They also have men who go through the program and I believe it’s a six to nine-month program where you’re actually working in the restaurant, but you’re learning all of the food prep, all of the culinary skills. You’re learning your customer service, and then they take you behind the scenes to teach you about books and managing the business and the leadership. What’s really amazing about program is not only are you training and learning all these skills, you’re also getting paid because the restaurant’s actually profitable, so she takes these individuals.

They go into this program. They’re able to devote a lot of time to their training because they have a paycheck that they can still feed their families with; once they leave their program, they either get hired immediately – because Denver has a really low unemployment rate in the restaurant industry – or several individuals have actually gone on to start their own business. If you look back at what her original goals were as the developmental director, that is accomplishing it far better than programs because not only is she giving people a really strong foundation to start a business, she’s also giving them paid training if they want to go into the restaurant industry.

Dolph Goldenburg: I’ve always kind of been of the mindset that any organization that wants to develop an earned-income strategy has some ability to do that. Do you agree? Disagree?

Related income is income tied directly to your mission.

Alexandra Black-Paulick: You know that we had a lot of debates when we’re starting this program on. If there were examples that we just didn’t want to touch, or we didn’t feel comfortable with. By and large, I think more organizations can. That being said, there’s actually one organization that I volunteer with here in Denver that personally I wouldn’t want to touch. It’s a mentorship program with at-risk youth, and the idea is that my goal as a mentor is just to be a strong adult present in somebody’s life. It’s similar to Big Brothers, Big Sisters. It’s called Friends for Youth, and so I was paired with a 13-year-old girl and we just had fun. We just went to the museum. We played in my garden. I mean I’m getting all these like Kudos for volunteer points, and I’m just having fun every day. It’s amazing program. The other program that I’m volunteering with them is we’re going and providing mentorship in some of the women’s attentional facilities.

I will say I’ve spent a lot of time thinking about that one, and that one I just don’t know if I could really tap into. 90 percent of the other programs, it’s like, yes, there’s a lot of really great pass. Sometimes you need that out of the box thinking. I will say that if you’re working with small children some of your family services things, a couple of your medical stuff, that space a little bit makes me nervous.

Dolph Goldenburg: Tell me more.

Alexandra Black-Paulick: Yeah, well, I mean some of the medical space that’s highly-regulated industry granted, a lot of medical nonprofits actually have really great revenue streams in health clinics, things like that. They have sliding scales, but you know, the medical space just because it’s so regulated in some of the services they offer, I see that one being a little tricky. Then again, just organizations that maybe work with at-risk kids or are very safety focused or mentorship. Those ones are a little bit more challenge. I’ve spent sometimes particularly thinking about friends for youth and decided that I will just financially support them and be a mentor instead.

Dolph Goldenburg: So, when an organization decides to pursue an earned-income strategy, what are some of the big mistakes that they make?

Alexandra Black-Paulick: You know, I honestly think one of the biggest mistakes in the industry is that we’re just not having that conversation and we’re just not having that mindset or looking at it through that lens. Like I said in the beginning, there’s a lot of stigma or negative around that. The other one I would say is, you know, probably biting off a little more than you could chew it. Starting a business is hard because this is what we’re doing. In some respects, you’re creating a little mini-business under the nonprofit. There’s gonna be some ways that a nonprofit is better positioned to do this, and it’s going to take a little bit of a different approach that they’re going to have to do. That’ll be a little bit different. Biting off a lot and not necessarily realizing the full resources that need to be addressed to that… I am a huge advocate of really doing a lot of initial planning, you know, figuring out your assets, identifying the needs, really, really, really pinpointing who your ideal customer is. That is something that all entrepreneurs struggle with and so nonprofits fall in the same thing is really pinpointing who it is, why they want that service, and making sure that if you put the effort into it, you’ll actually make money on top of it.

Dolph Goldenburg: I think one of the big mistakes that I see organizations make when they decide to start a business is they turn to a current staff member who has never started a business, doesn’t really understand the way the business side of the nonprofit sector or the for-profit sector work, and they say, “Okay, can you do x, Y, z?”

Alexandra Black-Paulick: That is so true. I feel like the same as with social media too, but yeah, you know, nonprofits. I get it’s short staffed, you know, everyone wears multiple hats. That person probably could use some mentorship and guidance. If you have business board members, that might be a great opportunity to have them come in and mentor, and a lot of people are so in that business space, they would love a project like that and really latch on and help mentor him. Mentorship I think is just something that’s underutilized in general but could be a really exciting space to help with that.

Dolph Goldenburg: What are some of the things that organizations do right when they start to think about earned income strategies?

Alexandra Black-Paulick: I have to say the dedication to serving others is huge. You guys have such an edge here because this is what you were designed to do that when it comes to serving your customer and really focusing kind of on that valuable experience in relationship, it’s phenomenal, and it’s baked into the nonprofit cake. That attitude, that approach.

Dolph Goldenburg: Well, speaking of edges, one of the other edges that I think nonprofits really have in this space is that they have the opportunity to raise capital without having to repay it. Let’s say you and I go out and start a staffing agency really targeted toward homeless people; we’re doing it as a for profit. We have to go find investors, we have to make our business case they’re going to invest, but we’re going to have to pay them back. Whereas, you know, if we’re doing it as a nonprofit, we still have to find investors. We still have to make our business case, but for the most part, not always, sometimes you take out loans, but for the most part, those investors are foundations and major donors who while you’re accountable to them, you are not ultimately having to write them a check in four years.

Alexandra Black-Paulick: That is so true. I’m actually really glad you brought up this point because one of the questions I’ve actually gotten going through this process is like, “Are my donors not going to be supportive of this?” Or maybe my base will be, “Oh, nonprofits aren’t supposed to make income. Why would I donate to you?” Another great Denver company, the nonprofit Denver Food Rescue, actually went to their donors and told them about a social enterprise that they were building, which is technically a separate entity; it’s an LLC that’s owned by the nonprofit. Anyways, they went to their donors and said, look at what we’re doing. Your dollar can go farther, and they were so excited, and they were able to get a lot of the technology donated in different things like that. It’s a really great conversation and a topic that I’m really happy you brought up because you’re right, there is that edge. I want my impact to go farther, and if we can showcase ways that if I donate or invest into this enterprise that you guys are building, that you’re going to have a deeper impact, that’s totally up my alley.

Dolph Goldenburg: I also think it’s important to take a close look and determine which donors you want to ask to support. You know, it’s much like if you’re doing a capital campaign, you know, so not every donor is going to want to contribute to your building. Some donors are going to want to contribute to your service; some donors are going to want to contribute to your building; some will do both. You look at your donor list, and you look at the foundation support you and you say, “Okay, these are the ones that are really going to be interested in our food bank having a new building/ our food bank having a reach over and do the next-door county.”

Alexandra Black-Paulick: So true. And going through and vetting that list, it also really highlights how important it is to have those relationships with your donors. All aspects of nonprofit health. It’s really good for you. I also want to say talking about foundations, I was talking with a foundation that’s back east recently, and they were so excited about this idea because they really saw it as a way for their dollars to go farther. Even if it was just teaching other organizations some of these ideas and different things, they were like, it would be great to help other organizations figure out how to earn income if we can’t write them grants. Maybe we do a startup grant for that idea, and then they can take it further. There’s that longevity and sustainability in it that’s really appealing because people who are invested in your mission want you to succeed.

Dolph Goldenburg: Hey, Alex, we’re going to take a short break and when we come back, we’re going to talk about opportunities for earned-income.

Successful Nonprofits™ podcast is produced by the Goldenburg Group as part of our mission to provide board development, strategic planning, and interim leadership to help nonprofits thrive in a competitive environment.

Over the past few months, several listeners have reached out to me with seemingly intractable questions that they’re struggling with. Things like, “My board chairs, just a complete and total schmuck and I don’t know what to do” or “I’ve got our organization’s first event coming up in a few months, and it seems completely stalled, and I’m scared.” I love to get these [questions], not just so that I know I’m not alone and having problems in this world, but also so that I can maybe shoot you a 15-minute email and give you some free thoughts about what I think you might want to do. Let me say that I might use some of these questions as fodder for upcoming blog posts or bonus breaks or something like that. Don’t worry, I won’t use your name. [inaudible]

Hey, Alex. welcome back to the podcast. I promised that we would talk about opportunities for earned income strategies after I gave away Jill’s big secret that our board chair as a Schmuck; share a little bit with us about her opportunities for earned strategies.

Alexandra Black-Paulick: I will, although I bet you everyone listening in is curious how you responded to Jill’s email with having to deal with a Schmuck everything single day, but to keep on theme. One of the great spots of starting with this earned income idea is not only exploring the assets in your organizations, but also seeing how other organizations are doing it because there’s this little dirty secret in the business world called Best Practices. It’s basically looking at everyone else, seeing how they’re doing it, and figuring out how to apply it in your organization,

Dolph Goldenburg: Steal from best practices! Hey, I get it. We all do that!

Consider “best practices” so that you don’t recreate a broken wheel.

Alexandra Black-Paulick: We all do that. We all figured out what’s working right? Because I don’t want to recreate a broken wheel. Nobody wants to do that. A couple of the different things that some organizations out there doing, one is licensing technology. If you guys have software or an APP or a program that is super vital to either one of your programs or your organization and it solves a specific pain point, it’s likely that other organizations need a similar service. There’s a great organization out of southern California called the Virtual Counselor Network, and they built this like a behemoth of a software. It’s able to connect counselors to individuals looking for help. They also are able to have a call screener connected to, but it’s not just those three people. It’s a whole list of clients calling in with one phone screener in the middle and then a whole list of available counselors. Depending on what your problem is, they’re able to kind of do the almost old phones which wire individuals, but they’re able to connect you directly either via phone or video conferencing and they also have all these other capabilities.

When this organization was really rolling out their software and having other organizations use it, organizations actually came back to them and said, “Hey, we love what you got going on. Can we use this for our organization, too?” They created a licensing fee where organizations, nonprofits pay a very small fee, whereas for-profits pay a little bit bigger fee… got to love the sliding scale. They also have the opportunity where organizations can white label it, which means that even though the organization created it, the other organization who’s paying to use it gets to put their label on it and gets to kind of touted as their own. That’s kind of a fun one for technology or software.

Another great place to start is if you guys have a curriculum or if individuals from your organization are always being asked like, “Oh, can you come train us on this? / We love how you guys are doing it, or you know, we’re struggling with that. Would you guys mind coming and showing us how to do it?” Perfect opportunity for either consulting or facilitating trainings. So many organizations get asked to host trainings all the time. It’s also a good time to realize that if you’re getting asked for this training is enough. It’s probably time to sit down and actually create the training. I know a couple of organizations, including one who went through our program recently and said “Man, we’re asked to do this training all the time and not going to lie. We wing it every time.” It’s like, “Okay, step one.” You couldn’t have put together a couple of PowerPoints, some curriculum. It’s going to make your life easier because you’re getting asked all the time, and then you can start exploring different consulting fees, facilitate trainings. If you get asked enough times, it means there’s other people who are interested in. Some of the most common ones are selling products. That one’s, you know, often your low hanging fruit. A lot of organizations go there. I know a lot of the Facebook groups that I’m in right now, the Go-to is a thrift store. I don’t know if you talked to a lot of people about their stores as well.

Dolph Goldenburg: When I was the development director of the same name, St. Vincent De Paul Society, the Department oversaw our chain [inaudible]. I know way more about it, and it is kind of a cutthroat business of a thrift store; whenever an organization says to me, I’m thinking about starting at a thrift store, I often say unless you have a very good niche for your thrift store or a really good niche for your customers who will be coming to that thrift store, it’s tough to make it work as a one-store operation.

Alexandra Black-Paulick: I love that it’s cut through, well not love, but find it wildly entertaining.

Dolph Goldenburg: This is also fodder for a different show, but I did not know if you’re aware of this, but because of the recycling programs and thrift stores, that industry in the United States, these stabilizes textile industries in developing countries, which I only realized after starting a recycling program, and then I left the organization. And then one day I saw this article and because we’re selling our used clothes overseas at pennies on the dollar entire textile, sectors of economies just disappear in developing countries. On that depressing note, okay, let’s talk about some other stuff.

Alexandra Black-Paulick: Well, you bring up a good point. One of the things I want organizations to do in the vetting process is explore unintended consequences. When you’re building out these different programs, it’s good to have a devil’s advocate in the room that is also like “What could go wrong?” or “Why should we not start this?” or “What are we going to screw up in the process?” Have those questions and kind of take that journey all the way out. If we start here, offered this service, are we really going to be achieving what we want or we making something more difficult? Slightly depressing way to remind us of a good point of unintended consequences. Another one is offering services. Because I’m in Denver and I’m hyper Denver-biased, I’m going to drop another Denver Organization.

I swear I know of other organizations, but I’m here. I love Denver. This is what we’re doing. There is an amazing organization called Bikes Together. They sell refurbished bikes. Their entire program is built around getting more people on bikes. They want to increase bike accessibility and their program for kids, I think it’s ages three through 13. They have a giveaway program for kids where you come, your parents come. You’re going to have a bike Rodeo. You’re going to get a helmet, a bike lock and learn how to ride a bike and how to be safe on a bike because it’s all about fostering that community. Obviously, giving away thousands of bikes is really expensive. They’re really good at refurbishing old bikes. They actually sell bikes. My husband and I were bike shopping for me, and we went to go see Bikes Together, and he walked out with a really gorgeous carbon fiber road bike. It was very expensive and more than we were planning on spending my bike; he still has to explain that one to me and how that worked,

Dolph Goldenburg: It was good for the organization! That’s how he justified a ride. He’s like, oh, it has poor kids get bikes, I can do that.

Alexandra Black-Paulick: They refurbish and sell bikes and granted his bike was on the higher end of what they do, but they also do lower end price points that hits a variety of. I don’t know if you’ve been bike shopping recently, but those suckers ain’t cheap.

Dolph Goldenburg: My husband is a triathlete, and he once left his wheels in a parking lot. I know how much those wheels costs. He left one. You still have to replace them both. He went back and could not find it, but you know, he buys his own wheels. I can’t be that upset about it. It’s his money. Yeah. I do know how expensive bikes are.

Alexandra Black-Paulick: Yeah, and if you’re a triathlete, we’re talking about some serious time on a bike anyways. They create multiple opportunities for people to engage with and buy bikes, which is one of the things. I love them also, they have a bike workshop, so we had paid a membership because when we did end up finding my bike, it needed a lot of work because I was going to be particular about what bike frame I wanted. We paid for the membership so we could go and work on Sunday because you have to be a member to work on Sundays. We threw it up on the stand. They had all these really obscure parts that I needed to fix. They also, and this is actually back to the point of offering services; they offer to nap services because it’s not just that you own a bike. How many people have a bike sitting in the garage that has been sitting there for the better half of their life that looks a little rusty, doesn’t run as well?

This is a great opportunity for you to take a bike you already have affordable price point and go and actually get a bike tuned up. They not only sell products, but they offer services, and they have a membership option, which like I said, we signed up for that day. They are a nonprofit, so I’m going to feel good about this purchase. Then all of the profits that they make then go back into funding either their giveaway programs. They also have an opportunity. If you can’t afford a bike, you can volunteer for x number of hours, and then you’ll walk away with a bike that you put together. They hit a lot of the different ones. Another great one is renting out space. A lot of organizations have really big spaces and as I promised, I do have other examples.

When I was in San Diego working at a nonprofit, we had a fairly large office space. I have no idea why we had this large office space because San Diego land’s not cheap. We ended up renting out some of the office space to a different organization that aligned with us. As part of the deal, she also gave some mentorship to the executive director, who was a very small organization. It was basically the two of us as working staff. It was a really great for her to have the opportunity. She got a reduced rate on rent. They also ended up renting out a different office to another organization that ended up working with us on some of our programs. It was really great for us. That one can be a little stretch on is directly related to your mission, but for that organization that worked out really well.

I’ve seen co-working spaces that are actually nonprofits because they serve nonprofits. That’s it’s all about renting space, but the whole model actually makes money.

Dolph Goldenburg: I also think one of the things that organizations often do not look at is the service that they are already providing and just charging for it. If you are a community counseling center and you know, maybe you are doing it on a sliding scale, but the top of the scale is really $65 because you’re primarily want to serve low-income people. In your community, you know, private pay counseling goes for $150 or $200 per session to say, “Okay, we now have a sliding scale that’s $200 to $0.” Someone who comes in with an income of six figures and says that we’re going to start marketing to those folks as well. And then they’re going to be paying the $200.

Alexandra Black-Paulick: That’s a great example, and actually somebody who just went through the course who is in Illinois was exactly what they were looking at. They were a counseling provider, and right now they’re doing a lot of free counseling. We had conversations, and you can still serve the community that you’re serving, but let’s look at a sliding scale option. There are organizations that are doing that. Some of the things that they were looking at is, you know, some of the overhead that they might need to accept insurance, stuff like that. But you know, even when I’ve had insurance, if I know what a flat rate is, it’s simple. It’s easy to get into. I’ve taken those options before because I like things that are simple.

”Nonprofit” describes your tax status not your business plan. Your nonprofit can make money.

Dolph Goldenburg: When we use that counseling example, I often think that the objections the organization might raise can actually be easily turned around. And so, as an example, “Oh, we’d have to invest in the infrastructure to accept insurance.” Well, that’s a good thing because it now means you’ll be able to take Medicaid, and so if you can take Medicaid, you can now serve low-income kids, you can serve low-income disabled adults. Guess what? You’ve just helped your mom, you know?

Alexandra Black-Paulick: Are you now paying for the staff that had that and then building a return on top of that?

Dolph Goldenburg: The other thing that I think you will often hear, and I’ll use the counseling example again, if you say, okay, we want to start taking full private paid clients as well. At 150 to $200 per session, you know, people will say, “Oh well, you know, our waiting room is not nice enough for that in our offices are not nice enough for that. No one’s going to pay us 200 bucks.” That means you need to pitch this to your foundation I (your investors, foundations and major donors) and say, “In order for us to be able to get people to pay $200, in addition to being able to do this for free for people, we need a nicer waiting room, windy, nicer offices. You now also just paid for a nicer waiting room and offices for people who up to this point you thought, “You know what, nasty is good enough for them.”

Alexandra Black-Paulick: I love that you bring that up because it’s so true. I mean this idea that it has to look like the budget that it is. I remember going to a dentist office, and it was super affordable, and it was great. It was a flat rate because I didn’t have dental insurance at that time. I kind of felt really great going in and oftentimes that kind of impacts areas of the mission. You’re looking at mental health, what is the mental health if you’re going to get mental health services in a dump. It’s a really great conversation. Another aspect that I really want to touch on is the idea that free is better. A lot of times because in the nonprofit world, we always have to offer our services for free.

Sometimes, there are options, or people that you’re working with legitimately can’t pay, but the question of whether or not that’s always the case is kind of a question. What they often find in pricing is that people actually value services more when they pay for them.

Dolph Goldenburg: Amen.

Alexandra Black-Paulick: You’re going to value it so much more when you pay for it as far as coaching or consulting, things like that. You’re actually because you psychologically invested in it, you’ve got skin in the game, and it can be a sliding-scale skin in the game, but you have put some money down in if you’re invested into it. The likelihood that you’re going to use that program to the extent is so much higher than if it’s free and you can skip a couple of classes.

That’s going back to kind of one of the steps that we might need to address or what organizations might need to look at. That one is so important because free is not always better. I have friends come to me for advice so often, you know, business advice or things like this and I lay out a plan, a plan that, you know, I would charge my clients, they would pay a lot for it and then they would actually do it and I come back a month later and it’s like, “Hey friend, how, how did that go?” “Oh well you know, I didn’t do anything with it, and I think I’m going to look at a different option.” When you have that accountability for it, you’re going to go through the program, and you’re going to see those results, and that is such an important piece to remember when you’re pricing out some of these services

Dolph Goldenburg: I could not agree with you more. Unless someone truly does not even have a dollar in their pocket, free is always the wrong price.

Alexandra Black-Paulick: There’s a cafe again in Denver that I love that provides meals, and they are super healthy, organic, delicious meals and they’re a pay-what-you-can restaurant, but even if you can’t pay you have to volunteer hours.

Dolph Goldenburg: That’s very cool, and that is a lot like Pearl Buck’s book, God’s Men. Again, not something people read in college. When I read that in college it’s like 1963, and I was not in college until 1990, so clearly, you know, I should not have read it, but anyway, that model is actually outlined in that book.

Hey Alex, we are running out of time, but I’ve got a great Off-the-Map question for you. I had a sense that you have probably traveled a good little bit, and I think that’s something that you, and I also had kind of a strong sense that you are probably not a wheeled luggage kind of a person. Tell me about how you slept your stuff from place to place when you travel.

Alexandra Black-Paulick: Well, when my husband and I went off the grid for 10 months and went to travel Asia, we were [inaudible] backpack all the way. We strap those suckers up and carried probably too much junk around the globe. One hundred percent backpack. When I travel in the US, because so many airlines are going to where you have to pay for the carry on – just the above the bin, I am that minimalist travel that I’m going to fit all of my stuff into a little backpack underneath the seat because I’m not paying for extra space overhead. Plus, that’s just more crap I have to haul everywhere.

Dolph Goldenburg: I’m that way as well. I have one backpack that I’ve owned. I currently own six different backpacks, different backpacks for different uses. My big backpack I’ve owned for 20-plus years. It’s been on six continents with me, and it was a cheap backpack; it’s lasted, and I will probably never get rid of it because, you know, it’s been my constant companion on six different continents. I travel a lot for work. I will leave my home for eight days with, and this was for work with a backpack on my back that has eight days of closing it and that fits in the overhead bin because I refuse to get on the New York subway or the train in Chicago with this thing rolling behind me as I’m trying to like walk it up and down steps; it’s on my back and I walk. I had a sense. You’re a backpacker.

Alexandra Black-Paulick:  When I was in Italy, I did a study abroad in college, and I packed not only one big backpack. I also carried the front pack and just rocked that to no end. One of the other girls on the Italy trip brought a roller suitcases and was going through pebbled cobblestone streets. I think it was a miracle. It didn’t break. She ended up shipping half or stuff home and I think the suitcase was in it because most impractical way to travel ever.

Dolph Goldenburg: Yeah, when you’re traveling in places like Asia, Italy not so much, although, you know, I do remember going to a launderette and literally like, like going in a corner and stripping down to everything but like, you know, just a pair of boxers so I could watch everything. In Asia, it is so cheap to do your laundry. You can literally leave home and go to Asia with four changes of clothes and always have clean clothes.

Alexandra Black-Paulick: Exactly. And on that note, like elevators, not a guarantee man and Italy included.

Dolph Goldenburg: Well, you know, the funny thing is there might be elevators, but they also might not work

Alexandra Black-Paulick: I think we were in Vietnam and again we had our backpacks and we’re on the fifth or sixth floor and we would have hauled them up. There wouldn’t have been the first time, but they like strapped up to this hook that was in the middle of this stairway. Then like it kind of jumped up and was rolling up. The backpack was swinging everywhere. I’ve got a video somewhere, but it was impressive, and we’re like “Alright, that’s like room service and delivery to be like go fish it up at the top of the stairs. How does this work?”

Dolph Goldenburg: So, I love Vietnam, and I spent about two months there. What were your two most memorable things in Vietnam?

Alexandra Black-Paulick: Two most memorable things will the driving? I don’t know if I’d put that in the positive column, but I very first night in Saigon we did this culinary food tour because I’m all about the food, and if you’re new to traveling food bloggers, food bloggers, like I praise you. You guys are glorious.

Dolph Goldenburg: Did you eat coconut tree warm in Vietnam?

Alexandra Black-Paulick: No, I never even heard of that one song. I don’t know. I don’t know what meets we ate.

Dolph Goldenburg: I like to find obscure things, but locals have to eat them, so that’s why I’m like [inaudible]

Alexandra Black-Paulick: I was going to say I actually don’t know half of what I ate in Vietnam. I didn’t know the science, but we did this food tour. Students come and they take you around the city and then they tell you what to buy for food because I knew nothing about Vietnamese food except for PHO, and I knew my husband was not going to endure another month of only noodle soup because we’d just finished two months in Thailand. It wasn’t going to happen. We hopped on the motorbikes with them, and so I was on one. He was on the other with these kids, and they’re having these in-depth conversations with us about like politics and culture and all of this weaving in and out of the trap like crazy. I just remember like, “Shouldn’t you be focusing on anything on the motorcycles?” He’s like, “Oh, it’s just like a sixth sense.” I’m like, “We’re going to make it through.” [inaudible] And then the rice paper pizza… that was a big one.

Dolph Goldenburg: Alex, thank you so much for joining us today and I do have to say this Off-the-Map question really work because I feel like folks really got to know you. Thank you so much for joining us. It has been a pleasure having you on the podcast today, and I want to always share ways that our listeners can learn more about your work. The first thing I’m going to do is I’m going to direct our listeners to www.nonprofitsforthefuture.com, and it’s an organization, obviously we’ve talked about it already today that helps nonprofits explore income that aligns with their mission and deepens their impact. At this website, you can learn about their virtual workshops. I also want to encourage our listeners to check out www.positiveimpact-media.com, where listeners can learn about your workshops as well as your marketing solutions. Of course, we’ll link all of your social media and our show notes so folks will be able to find you that way as well. Hey Alex, this was a great conversation, and I hope we can have you back on the podcast again.

Alexandra Black-Paulick: I had so much fun and am looking forward to that future conversation.

Dolph Goldenburg: You always know that Alex has contact information and social media links will be posted on our website, so even if you are struggling with wheeled luggage over cobbled streets or while boarding a plane and unable to write down those two website URLs, just visit www.successfulnonprofits.com, and you can get the show notes. Also, by the way, I’d suggest you get a backpack, and I think Alex would probably agree. Now, if you’re listening to these last few sections of the podcast, it means that you are a die-hard fan, or your hands are really fully occupied with that carry-on luggage and you’re not able to get to your phone and turn this off. If you’re listening right now, really come on, you owe it to us, take a minute to rate and review the podcast on iTunes, Stitcher, or your streaming app of choice, and if your hands are full of the luggage when you get your hands free, please do that. That’s our show for this week. I hope you have gained some insight to help your nonprofit thrive in a competitive environment.

(Disclaimer) I’m not an accountant or attorney, and neither I nor the Successful Nonprofits™ provide tax, legal or accounting advice. This material has been providing for informational purposes only and is not intended or should not be relied on for tax, legal, or accounting advice. Always consult a qualified licensed professional about such matters

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