Find the Chicken!

Many nonprofits and ministries create donor partnerships and memberships as ways to receive recurring contributions on a monthly basis. These donations help sustain the work of the organization. After reading, Chickens and Pigs by Harold Star, I realized that this is a chicken business model. There are four types of business models which are characterized by their different types of revenue streams:

1. Locusts - small, repeating but non-recurring revenues and large customer pools, e.g. retail businesses.
2. Pigs - characterized by large, non-recurring revenues and sporadic customers, e.g. consulting businesses
3. Black Widows - characterized by large, non-recurring revenues and only one or two customers
4. Chickens - according to Star, this is the best type of model because it is characterized by stable, recurring revenues and slow and steady customer growth, e.g. accounting firms.

 I believe that Star's advice of "find the chicken" is applicable to the gamut of entities from small businesses to nonprofits.Unfortunately, because of the current economic unrest, donors are a little chicken about long-term commitments (pardon the pun).  Many nonprofits should pursue earned income or social venture "chickens". A good  example of this is the sports and fitness programs of the YMCA.

Organizations can have a combination of business models. Which model best characterizes your main revenue stream? Is it time for you to "find the chicken"? To read more of Star's fascinating research, click here.