When it comes to the stock market, the status quo is to diversify your interests in order to reduce risk. The same is true when it comes to fundraising. As a nonprofit, you need to have multiple fundraising streams. However, make sure you’re not fixating on so many that you spread yourself thin.

If you can find a way to receive money from grants, corporate sponsorships, individual donations, peer-to-peer fundraising, product sales, loans, foundations, bequests, informal events, AND tabled events, then by all means do it.

However, acquiring each and every one of these takes a lot of money and manpower. And in many cases, nonprofits have neither to spare. You need to utilize your resources efficiently.

It is important to start by creating a chart to see what sources are currently bringing in the most money.

For example, what if you realize you have committed multiple staff members and significant funds toward making your magazine, but it is bringing in only 2% of your revenue. Is this really the most efficient use of your efforts?

What if you only have two corporate sponsors, but these sponsorships are bringing in a quarter of your total revenue. Doesn’t it make sense to pay greater attention toward finding more sponsors, since it has been a very efficient revenue stream?

If you diversify your limited resources across 10 sources, you will have 10 underperforming fundraising streams. I’m not suggesting cutting off nine of those sources and only concentrating on one, but what if you shifted more focus toward your annual fundraising party? The party’s revenue would shoot up and your event would also be more memorable to guest, giving you one very successful fundraising stream.

Your budget is tight, so do not throw capital at every possible opportunity. Use your assets wisely and focus on a developing a handful of high quality sources.

Diversification is not a bad idea, but before you spread yourself thin, consider what strategy works best for your organization.