R.E.O. (Revenue Enhancement Opportunities)
These are interesting times. Even before all of the virus-ness that we
are dealing with in the Spring/Summer of 2020, "our size" schools were
experiencing the thoughts (maybe even needs) to look at "enterprise
activities" or alternative sources of revenue. We get it. For the past
several years, we've been working with Christian institutions to discern
what their unique potential in this arena might be. It is very fun!
Below is an example that - we hope - will give you an understanding of what we are talking about and how your school can "jump in with both feet."
Marathon Bible College (MBC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are required to file Form 990 annually. MBC’s Controller and Chief Development Officer called us and asked about the program we do with “R.E.O.”
Well, we call it Revenue Enhancement Opportunities and it is an on-site project we do with a prayerfully chosen group from your leadership team. Usually, we like to include 12 to 15 of your school’s leaders for a day and a half of discussion.
“Okay, tell us more about that. How do the two-day sessions work?” asked the CDO.
“In summary, we try to get a group of leaders of the institution in the room (CEO, COO, CFO, accounting team, board members, deans, key employees, development officers, athletic directors…). Many times, they do not believe we are going to have anywhere near as much fun as we do!
We start 15 days ahead of time with daily prayer for the institution, the individuals, and the session. (This year it’s been based on Exodus 23.) Also, the participants have “homework” with questions based upon your school’s “About” section of the website, your Form 990 (if applicable), and the footnotes to your audited financial statements. They personally go through questions/notes about “uniquenesses” that they see therein – with those uniquenesses charted in each participant’s pre-session notes.
Then, on Day 1, we begin with lunch being brought in and move into a time of discussion and brainstorming about “uniquenesses” – and those are indicated on “big yellow stickies.” Then we move into coming up with “enterprise opportunities” (ideas for businesses/activities that fit within your identified “uniquenesses”), write those on “big stickies,” and place them on the walls around the room.
After a break, we pray. Then we begin to narrow down the “enterprise opportunities” with discussion on the pros and cons of each. When we get down those down to ten or fewer, it is generally time to adjourn for the day (usually about 5:30pm but time is flexible throughout the process).
Day 2 begins with prayer and a conversation about the previous day. We spend the morning going very, very deep on all implications of each enterprise opportunity – always aware that, from a tax standpoint, we are better situated if the opportunity we choose to pursue is related to your exempt purpose. We take several breaks to keep everyone fresh – mentally and physically.
Then, late in the morning, we assign a one-word title to each opportunity being considered. At that point, each participant/leader votes for their “top two” using an on-line polling app. This survey creates a word cloud that we put up on the screen using a projector.
At 12:30pm on Day 2, the group hosts a lunch with other invited stakeholders of the institution. We like to call this the “Advisory Team Lunch.” With the word cloud (where the most popular choices are shown larger than others) up on the screen, we introduce to the larger lunch group what we’ve been doing. During the meal, each assigned table spokesperson (from the participant/leader group) talks about the process and allows the new participant/stakeholders to ask questions. Notes are taken with regard to the discussions at each table.
After lunch, we spend time talking through the lunch discussions and where we’ve been – moving toward a prayerful decision on the “One Thing” your institution feels called to do.
Following the 1 ½ day session, we work the calendar – driven by action point dates – to implement your school’s chosen R.E.O. project. It is truly a blast!”
“Wow,” says MBC’s Controller, “what about follow-up? After the session on-site?”
“We are flexible with that. I can continue to be involved with follow-up calls and emails and meetings or you can do it all yourself. The success of the follow-up is always based upon the buy-in of the group, the stakeholders, and – especially – the leadership. It depends heavily on “tone at the top.”
As uncertain times continue in our arena, it would appear wise for your institution to consider “Revenue Enhancement Opportunities.”
There are numerous issues to be considered with regard to choosing which “enterprise opportunity” to pursue currently.
The ultimate “enterprise opportunity” for your school will likely take advantage of your “uniquenesses” – institutionally and individually – S/K/E, timing, planning, and your level of “corporate perseverance.”
We’d LOVE to talk with your school about an R.E.O. project, but if you’d like to try this on your own, we are here to help in any manner we can – we’re just an email away.