Product diversification and commercial ventures

One of the key characteristics of nonprofit organizations is how many different products and services are typically offered by even relatively small nonprofits. While for-profit organizations typically diversify their offerings only after achieving some scale and experience in the core business, nonprofits typically diversify early and often. This chapter explores the factors which drive this diversification, comparing product extensions for mission reasons and those principally to support the budget. We consider some of the challenges of managing a nonprofit with a wide range of product services and goods, including issues of focus and cost accounting. Finally, we look at the special case of the earned-income venture, started explicitly to raise funds to support the core mission of nonprofits. What form do these ventures take and what challenges can arise in their management?