In the last few years, nonprofits have faced mounting financial pressure. From federal policy changes to shifting grant-making priorities and changing gift-in-kind (GIK) donation patterns, traditional revenue streams are no longer as reliable. As a result, many organizations are taking a fresh look at the fee-for-service model for nonprofits as a way to build resilience and reduce dependency on unpredictable funding.
At the same time, donor behavior is evolving. Foundations increasingly expect nonprofits to develop self-sustaining revenue models, and many have started to include instructions with their grants to encourage organizations to pursue earned income opportunities. Meanwhile, younger generations are supporting causes they care about in ways other than cash donations directly to nonprofits or attending galas.
It means now is the time to reexamine your organization’s fee-for-service programs—or develop new ones.
Understanding the Fee-for-Service Model for Nonprofits
A fee-for-service model for nonprofits allows an organization to charge fees for the services it provides—either to partner organizations or directly to clients. These programs are often mission-aligned and supplement, rather than replace, traditional philanthropic revenue.
Not only can this strategy create a more sustainable revenue base, but it can also increase your impact by reaching more clients, demonstrating value, and attracting new types of funders. The fee-for-service model for nonprofits is designed to align earned income with mission delivery—making it a powerful strategy in today’s evolving funding landscape.
Common Challenges—and How to Navigate Them
We’ve run and advised on many nonprofit fee-for-service programs. And while each organization is unique, some common concerns come up time and time again:
1. “Our nonprofit partners can’t afford to pay fees.”
This is a common concern—but it’s also a moment to reframe the opportunity.
Fee-for-service doesn’t mean shifting the entire cost burden to your partners. In fact, it can create a joint fundraising opportunity where both organizations bring specific, quantifiable needs to their donors.
Because each organization is covering a portion of the total cost—either through earned revenue or fundraising—donor asks can be smaller and more targeted, making them more achievable and appealing. Your partner gets access to a valuable service at a lower rate than commercial options, and you both reduce reliance on unrestricted funds.
You can also explore cost-sharing models or grant-funded pilots to test the collaboration, build trust, and demonstrate sustainability.
2. “We’ve always offered this service for free.”
Understandable. But in many cases, those “free” services were subsidized by charitable support—support that is now being stretched to cover growing needs. Foundations themselves are navigating gaps left by the retreat of government funding.
This is the perfect moment to bring innovative, cross-nonprofit partnerships to new funders who are looking for collaboration and impact.
3. “We don’t want to charge our clients—many are already under financial strain.”
Absolutely—affordability and access must remain at the heart of your mission. But it’s possible to design sliding scale or tiered pricing models that reflect a client’s ability to pay, while ensuring they contribute a reasonable share.
Even modest client contributions can:
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Increase program commitment
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Provide useful data for funders
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And create opportunities for donors to “sponsor a client” or help make a service more affordable.
4. “Negotiating fees makes us uncomfortable.”
It doesn’t have to be uncomfortable.
Developing clear pricing structures, negotiation guidelines, and talking points equips your staff to handle these conversations with confidence and consistency. Whether you choose to negotiate or not, having a policy-based approach ensures fairness and removes the guesswork.
How We Can Help
At Extra Good, we help nonprofits assess, build, and strengthen their fee-for-service programs. We offer:
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Fee-for-service audits
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Market analysis
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Pricing strategy development
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Staff training and policy templates
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And more.
Our goal is to maximize your organization’s earning potential while staying deeply aligned with your mission.
Positioning Your Nonprofit for the Future
The nonprofit funding landscape has changed—and it’s not going back. Building sustainable earned income streams through a well-designed fee-for-service model for nonprofits isn’t just a nice-to-have; it’s a strategic necessity for long-term success.
Now is the right time to take a closer look.
Want help reviewing your nonprofit’s fee-for-service opportunities?
Let’s talk. Contact us to schedule a free consultation.