Last summer, it seemed that the Groundswell organization based in Washington State had made significant strides in philanthropy as it negotiated on behalf of neighborhoods and local communities regarding declining rates of renewable energy, but its funding gradually faded, and many of the grants and performance contracts crafted by nonprofit organizations that had previously lined up dwindled when grant-making institutions faced their own financial difficulties.

Executive Director Will Barr said: "We were on a growth path, but our financial stability did not grow as we are a nonprofit organization," adding, "We are almost separate entities," and the organization is now seeking to slow its reliance on external investors by exploring earned revenue models, including charging nominal fees for its work. Barr added that the revenue earned so far does not cover the organization’s total expenses, but it is a start.

This marks a deviation from the usual business model in which nonprofits often compete endlessly for a limited pool of funds from individual donors, grant-giving institutions, corporations, and government agencies. While this model removes many burdens associated with generating revenue, it also leaves nonprofits in a perpetual dilemma because their services depend on this elusive choice.

The dilemmas are related to the economic downturn that struck global economies after the 2008 financial crisis, prompting governments to implement expansionary spending investment plans to avoid market recession and prevent internal disturbances that could arise from it, which led to increased budget deficits in those countries.

These shortcomings became sharply focused during that economic recession, with many organizations seeing their donations slowly decline at a time when the demand for their services was rising. Ben stated, "The key takeaway for nonprofits from the recession is diversification." "Diversifying local government support, corporate support, institutional support, and individual support." Ben added that organizations aiming to generate revenue "need to recognize their need for competencies and have a plan in place because to succeed, a social enterprise often needs to overcome the market."

DC Central Kitchen faced that challenge in 1997 when it provided meals to low-income city residents through a catering company run by convicted felons and recovering addicts participating in culinary training programs.

Mike Curtin, CEO of nonprofit organizations, stated, "We can be the greatest people in the world... but if we don’t produce a high-quality product that competes with for-profit competitors, we won’t earn that business, nor should we."

Fresh Start Catering, along with contracts to provide healthy meals for schools and temporary residential facilities, returned $5.5 million to DC Central Kitchen last year, more than half of its annual budget, with external donations making up the remainder.

Curtin said: "To be a high-performing and productive social enterprise, you have to be driven by your mission first," adding, "When we bring in some money to a minimum, we make it better," but "if we move away from the minimum," Curtin warned, "we’ve accomplished another business venture."

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