One of the biggest things we see behind the scenes, in both small businesses and nonprofits, is organizations generating revenue or donations but still struggling with financial sustainability. And many times, pricing or program cost structure is a major reason why.

A Few Common Pricing Mistakes We See

• Not pricing based on your value and results. For businesses, if your work saves clients time, stress, or money, your pricing should reflect that. For nonprofits, if your programs are delivering measurable impact, your grant proposals, fee-for-service rates, and event pricing should reflect your true costs.
• Pricing based only on what others charge instead of your actual costs. Just because a competitor or a similar nonprofit charges a certain amount does not mean it works for your organization financially.
• Treating every client or program the same without tiered options. Different clients and funders often need different levels of engagement. Offering service tiers or program fee structures can improve sustainability and create better experiences.
• Routinely discounting to close a sale or secure a commitment. Discounting too often can train clients and donors to expect lower rates and can quickly hurt your margins or reserves.

Practical Action Steps to Review This Month

• Review your actual costs and profit margins or program cost allocations
• Look at which services, products, or programs are most financially sustainable
• Review how much staff time is being spent per client, project, or program
• Consider creating service tiers, package options, or program fee structures
• Review whether your current pricing or funding model still aligns with your organizational goals

Financial sustainability is not just about bringing in more revenue or more donations. It is about making sure your pricing and cost structure actually supports the organization you are trying to build.

If your revenue is growing but your financial position is not improving, it may be time to review your numbers more closely.

Need help organizing your finances and making sure your numbers are accurate for big decisions like pricing or program budgeting? We would love to connect.

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