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Ten Nonprofit Funding Models

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Kapo Kalenderian

on 6 April 2014

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Transcript of Ten Nonprofit Funding Models

Ten Nonprofit Funding Models
Money: common topic of conversation among non-profit leaders

Nonprofit leaders are better at creating programs than they are about funding their organization

Mismatch between nonprofit & funding source --> money does Not flow to the best options

Heartfelt Connector
Resonance with the existing concerns of a large number of people at all income levels

Tries to build ex[plicit connections between volunteers through special fundraising events.

Member Motivator
Rely on individual donations

Issues integral to everyday life, something from which people draw collective benefit.

Offering and supporting activities that they already seek

Religion, The environment, arts, Culture, and humanities…
Public Provider
Work with government agencies to provide essential social services, for which the government has previously defined and allocated funding.

Specific requirements for nonprofits to receive funding , (RFP)

With growth, other funding sources might be considered.

With growth, other funding sources might be considered.

TMC (formerly the Texas Migrant Council)
Beneficiary Broker
Providing government-funded or backed services to beneficiaries.

The beneficiaries are free to choose the nonprofit from which they will get the service.

The Metropolitan Boston Housing Partnership (MBHP)
Market Maker
Providing a service that straddles an altruistic donor and a payor motivated by market forces

Even though there is money available to pay for the service, it would be unseemly or unlawful for a for-profit to do so.
There is demand for human organs, but it is illegal to sell them
Most in Health and disease, some in environmental protection area (land conservation

- The American kidney fund
Local Nationalizer
Creating a national network for locally based operations.

issues important to local communities where government alone can't solve the problem

focus on issues such as poor schools, need for adult role models for children in local communities

Kapriel Kalenderian
Farah Matar

For profit org --> create value for a Customer, who pays for this value
Nonprofit --> create value for a beneficiary

Business model encompasses both relations

Funding Model that we will discuss focuses ONLY on funding, not on the programs and services offered to beneficiary

Types of funding models for non-profits never
been clearly defined
--> Authors of this article identified 10 nonprofit models
commonly used by largest nonprofits in US

Aim: Help nonprofit leaders better articulate the models, which help grow their organizations

Benefits of 10 funding models:
- Not too generic & not too specific: can be used by all nonprofits
- Improve fund raising and management, especially as nonprofits
grow in size
Sample Characteristics:
- 144 large nonprofit organizations
- Grown to $50 million in a year or more
in size
-each had a well developed funding

Funded by Many Individual Donations
Beneficiary Builder
Nonprofits try to build long term relationship with people
who have benefited from the service

Used by hospitals & universities

Donations are small relative to fees (5% of hospital fees, 30% of private universities), major gifts

Donors are motivated to give money bcos they believe that the benefit they received changed their life

Example: Princeton University, alumni donations
33,000 undergraduate alumni donated $43.6 million to alma mater

AUB raised $20.5 million in new gifts and pledges for financial
aid between December 2009 and September 2012, through the support
of AUB alumni and friends
Funded largely by a single person
Funded by Governments
Funded by Corporates
Mix of Funders
Big Bettor
Rely on few donors, or a primary donor
for funding

Primary donor, often founder, personal issue

Launch with strong financial ground, due to primary donor

Used in medical research & environmental issues

Example: Kunhadi Lebanon

Policy Innovator
Rely on government money

Address social issues that are NOT clearly compatible with existing government funding programs

Convince government funders to support these methods, more effective, less expensive

Resource Recycler
Rely on in- kind donations from corporations
and individuals

Distribute goods to needy recipients

Businesses contribute rather than products going to waste ( food with expiration date)

Addresses agriculture, medical, nutrition programs, international focus

Thank You
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