Non-profits, It’s time to stop hoarding your equity - embrace strategic investment and joint ventures to fuel your mission

Introduction

Across Australia, many small and medium-sized non-profits are sitting in my view sizable reserves, sometimes reaching $1 million to $3 million or more—funds built up over decades from admin charges on government grants and donations. These reserves sit largely untouched, held as a crisis fund or financial safety net. But this hoarding mentality, while seemingly prudent, is holding organisations back from fully achieving their mission.

Non-profits exist to make a difference, not just to play it safe.

Yet fear of risk; and a lack of clarity around what constitutes risk versus recklessness—leads many organisations to let their resources stagnate rather than invest in growth. Imagine if these funds, instead of sitting idle, were invested in joint ventures, revenue-generating services, and mission-aligned initiatives that could expand impact and build financial resilience.

Sector advocates and thought leaders increasingly call for non-profits to embrace commercialisation without fear, urging them to leverage profit to amplify, not dilute, their mission. But to truly enable this transformation, non-profits must be strategic, with the right legal frameworks to protect their identity, role, and revenue. Here’s how non-profits can turn untapped reserves into mission-driven investments while ensuring independence and sustainability.

The problem - hoarding resources is limiting growth and mission fulfillment

1. Missed opportunities for growth and innovation

   With funds parked in term deposits or savings accounts, non-profits are missing out on opportunities to innovate and expand their services. Rather than investing in partnerships or programs with commercial potential, they’re choosing “safety” over progress, keeping their impact smaller than it could be.

   
   

2. Stagnation in the face of growing needs

   Community needs are growing, and non-profits have an obligation to adapt. But by hoarding reserves, organisations are failing to meet these needs fully, undermining their mission. Financial reserves are helpful—but putting resources to work is what drives change.

   
   

3. Lost revenue by not commercialising valuable programs

   Non-profits often deliver services—such as job training, mental health programs, and educational workshops—that have inherent commercial value. Yet, instead of marketing these services to broader, paying audiences, non-profits hesitate, fearing profit might compromise mission. In reality, revenue-generating programs create sustainability and expand access to those who need it most.

Distinguishing risk from recklessness

Non-profits often conflate risk-taking with recklessness. But there’s a clear difference. Risk-taking involves calculated decisions based on thorough planning, potential revenue, and measurable impact. Recklessness, on the other hand, is diving in without a plan. Non-profits can avoid recklessness by pursuing carefully structured joint ventures and using reserves as an investment tool to amplify mission-driven activities.

In a sector that exists to make a difference, true leadership requires smart risk-taking. That means putting resources to work, seizing opportunities to generate revenue, and enabling growth in ways that support the mission long-term.

A solution - embracing joint ventures and revenue-generating services with legal protection

Joint ventures and commercial initiatives with other NFPs offer a structured way for non-profits to turn reserves into revenue-generating assets without compromising mission. But too often, non-profits rely on Memorandums of Understanding (MOUs)—non-binding agreements that outline shared intentions but lack enforceable terms. While MOUs may suffice for basic collaborations, they fall short when revenue and independence are at stake. Here’s how non-profits can create legally robust partnerships that protect their interests:

1. Revenue-sharing agreements for mission-aligned services

   Through a legally binding joint venture, non-profits can combine resources to reach a broader, paying audience while staying true to their missions. For instance, a workforce mental health non-profit partnering with a skills non-profit could offer a Corporate Resilience Program to address burnout and productivity in businesses. Revenue supports each non-profit’s core programs, while retained profits cover operational costs, build reserves, and fund growth. A clear agreement ensures transparency, fairness, and mission alignment.

   
   

2. Defining roles and independence in joint ventures

   Unlike typical NFP collaboration agreements, a robust joint venture contract specifies the roles, contributions, and boundaries of each organisation. This level of detail ensures that each non-profit maintains its brand, autonomy, and mission identity. When roles and rights are clearly defined in legally enforceable terms, non-profits can protect their mission while expanding their reach.

   
   

3. Protection against mission drift and loss of control

   Legally binding agreements allow non-profits to secure “mission protection clauses” that ensure core values and objectives aren’t compromised. Unlike MOUs, which don’t provide this level of enforceability, formal contracts allow non-profits to outline branding, service delivery, and revenue allocation requirements, minimising risk of mission drift and loss of control.

By establishing strong legal frameworks, non-profits can embrace revenue-generating partnerships with confidence, knowing they’re protected and that profits will advance their mission rather than threaten it.

The sector is calling for change - advocates support mission-driven revenue and collaboration

The movement to commercialise non-profit services and invest in joint ventures is supported by a growing number of sector advocates:

For example, David Crosbie, CEO of the Community Council for Australia, urges non-profits to prioritise financial sustainability through diversified revenue streams, arguing that “financial sustainability is key to the ongoing effectiveness of the sector.” He recognises that non-profits must move beyond dependency on grants and donations to achieve true mission fulfillment.

The Paul Ramsay Foundation is encouraging non-profits to pursue income-generating models that create resilience, enabling organisations to make a bigger impact even as funding dynamics shift. The Foundation’s focus on financial independence underscores the idea that mission-driven profit strengthens, not weakens, non-profit capacity.

Dan Pallotta, author of Uncharitable, advocates for ending the “anti-profit” stigma in the non-profit sector, arguing that “profit becomes a problem only when it is the purpose, rather than the means to a purpose.” Pallotta’s perspective reframes profit as a valuable tool, one that empowers non-profits to reach more people and generate sustained impact.

These advocates stress that profit, when pursued with purpose, does not dilute a non-profit’s mission. Instead, it amplifies it, providing long-term financial security and adaptability.

Empowering boards to take action from hoarding to growth-oriented investment

For many non-profits, the reluctance to invest reserves lies in the boardroom. Volunteer-led boards, while passionate about protecting the organisation, often lack commercial experience and can be overly cautious. But a board’s role is not just to guard resources—it’s to enable impact. Here’s how boards can lead this change:

1. Investing in board training on commercial ventures

   Boards need training in commercial strategies, risk assessment, and joint venture management. By understanding the frameworks that support revenue-generating partnerships, boards can make informed, strategic decisions that align with mission and expand reach.

   
   

2. Setting clear guidelines for reserve allocation

   Boards should establish policies that designate a percentage of reserves for mission-aligned investments, balancing the need for financial safety with growth-oriented initiatives. This policy framework provides clarity, empowering boards to invest confidently in opportunities that drive mission fulfillment.

   
   

3. Shifting the mindset from protection to progress

   Board members should see revenue as a tool to fulfil their organisation’s purpose, not a threat. By recognising the difference between risk and recklessness, boards can embrace calculated investment and innovative partnerships as means of growth and mission security.

Final remarks - Moving beyond inertia to realise full mission potential

The non-profit sector cannot afford to remain stagnant. By hoarding resources, non-profits are missing out on opportunities to grow, innovate, and make a lasting impact. Joint ventures and revenue-generating services, protected by robust legal agreements, allow non-profits to use their reserves strategically, secure their mission, and reach broader audiences.

Profit, when pursued with purpose, strengthens a non-profit’s mission. For those organisation's ready to lead, the path forward is clear: stop hoarding, start investing, and turn untapped resources into meaningful change. With the support of sector advocates, the right legal protections, and a proactive board, non-profits can embrace risk as a necessary ingredient for progress and move from inertia to action.

Because ultimately, our resources should be moving us forward, not holding us back.

About Nathan Burbridge GAICD

Nathan Burbridge is a non-profit strategist with a strong focus on helping organisations achieve sustainable impact through innovative funding models, strategic partnerships, and operational excellence. With extensive experience across the sector, Nathan empowers nonprofits to expand their reach without compromising their mission. Known for combining strategic insight with practical solutions, Nathan is passionate about fostering a sector where financial resilience and mission alignment go hand in hand. Through this blog, Nathan shares insights and best practices to guide nonprofits in navigating challenges, building financial sustainability, and unlocking their full potential.