Funding Models for Nonprofits

There’s an article in the Huffington Post this Week about the Sequestration and it’s impact on nonprofits and the people they serve.

What I found most interesting was a reference to the results of a 2009 study by Urban Institute. They found that, among the organizations responding, 65% of their income came from government sources (grants and government contracts). I guess it’s not all that surprising as I reflect on organizations I’ve worked with in the past. You can read the whole article here: Sequestration’s Damaging Effects on Nonprofits and Needy Families.

Stanford Social Innovation Review (SSIR) has outlined 10 different funding models for nonprofits. Having that list is all well and good, but many of my clients appreciate assistance in helping to determine what their funding model could – or should – be.

Thanks to SSIR, there’s a good model to follow. Yes, the article is a couple of years old, but it’s still quite relevant to today. And something to think about as your organization moves forward: how reliant do you want to be on a single source of revenue?

Here is a summary of the four steps to Finding Your Funding Model as outline by SSIR:

  1. Who is your organization? Where has funding come from? What were the motivations behind the support? What types of support are you best at raising?
  2. Where are similar organizations getting their support from?
  3. When you look at revenue possibilities can you afford the related costs?
  4. Make the necessary preparations to pursue that funding model.

It’s important to note that the article does say organizations probably won’t be able to completely define a funding model until they hit about a $3 million budget. Regardless, these steps will help as you seek out potential funding sources.

Please let me know what questions you have and what additional information would be helpful to you!

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