It is true that leaders who manage organizations need to be trained in how to lead, manage the organization, raise funds for operations. They also need to find friends from corporations, since these organizations limited to your close family, we see that the money provided by donors through large corporations do not reach the beneficiaries (communities) these he says Kenneth LuePhang of USAID was addressing representatives of civil society from the two regions Tabora and Shinyanga, so big power is directed to yaliyokaribu organizations and communities in the areas concerned
Great article. I have to agree with what is said here, most organizations start off with great ideas in mind, but then end up falling off because of the lack of funding structure. A strong funding structure is just as important as a good business plan, and may be what enables you to do great things with your NPO. That being said, sometimes lack of knowledge for how to fund and that there is even such a thing as a funding structure may be why so many organizations don’t have one - so I think the key here is to create greater awareness about the different funding structure models, and emphasize the importance of having one.
Very well done—there are scandalously few tools and approaches to effectively help non-profits grow their revenue. Most of the literature on “fund raising” is of marginal utility at best.
That said, I suggest there’s a simpler, more effective, and concise means to hit upon the optimum revenue model.
Write a business plan. The org should define its value prop and why it is uniquely situated as the best player to execute its mission. Then, define strategy, metrics and milestones. Cost out the resources to get there. And then define best-practice means of driving revenue from all 5 funding domains: agency, corp, foundation, individual, and earned income.
Caveat: this requires someone with the skill to write a good plan and an ability to play the whole funding keyboard.
And that’s where the sector is starving for affordable help. IMHO, it’s the only “capacity building” issue we should be talking about.
Bridgespan is a blue-chip business capacity builder—bravo to this obviously stellar shop—but I wonder if their services are in reach of the vast majority of non-profits. Many of our ~1 million small non-profits have excellent program models. But with budgets hovering around $300K, the challenge is not hitting on the right funding model, it’s hiring the talent to help.
Thank you. Very helpful article. We are a small, but fast-growing organization. Our US-based fund-raising operations have been serendipitous (unsolicited gifts, consistent donor organizations, individual donations campaign), as we have only 1 part-time paid “employee” stateside who is supported and assisted by a couple of volunteers. We are at a point of identifying how best to grow our US capacity to better support the DRC operations. This article is very helpful.
Great article! Funding models are required, I believe, for non profits especially if the non-profit organization is growing. And to reiterate the comment made by Mr. Japhet, there are companies that do provide financial aid but they don’t reach the intended beneficiaries. And that’s where organizations that use a funding model come out on top. To give you an example, http://www.buyve.com gives towards education based scholarships and through the funding model that’s in place at most of these places they make sure that the money reaches the intended recipients. This article is an absolute necessity in my opinion to every non profit organization.
These three pieces are some of the most helpful thought leadership out there. Finding an effective funding model, executing and keeping it going has been far harder for us than designing better and new programs. Running a nonprofit would be a hell of a lot easier if it was as simply as finding programatic solutions to challenges. I suspect few outside the sector realize this reality.
Fantastic article! We’ve added it to the seToolbelt, a free open-content resource directory for social entrepreneurs. Don’t miss this other great article (by some of the same authors) on funding models: http://www.setoolbelt.org/resources/315
I’m just stumbling across this article in 2016! I have been using the Stanford article Ten Nonprofit Funding Models in my Nonprofit Organizations course at Arizona State University for the last few years, and I would take issue with the comment in this follow-on article that small organizations don’t need a funding model until they hit the $3 million revenue mark, and here’s why: (1) Thinking through the funding models helps a non-profit identify their most likely partners, whether they are seeking (small) government contracts or holding spring and winter (heartfelt connector) fundraisers; (2) Understanding your best funding partner “fit” helps at any stage, and if you feel you need to grow because the need is much larger than your capacity, keeping the “fit” in mind as you make strategic decisions is like staying aligned with your mission. When the time is ripe, you’re already prepared and on the right track. I appreciate Stanford’s wealth of information. Keep it coming!
COMMENTS
BY Charles Royer, Cooperatus: The Center for the Exploration of Human Cooperation
ON September 15, 2011 11:06 PM
Great article. Very helpful information.
BY Mr. Japhet Aloyce Kalegeya Christian Education
ON September 19, 2011 01:54 AM
It is true that leaders who manage organizations need to be trained in how to lead, manage the organization, raise funds for operations. They also need to find friends from corporations, since these organizations limited to your close family, we see that the money provided by donors through large corporations do not reach the beneficiaries (communities) these he says Kenneth LuePhang of USAID was addressing representatives of civil society from the two regions Tabora and Shinyanga, so big power is directed to yaliyokaribu organizations and communities in the areas concerned
BY Kruti Carsane
ON September 19, 2011 09:14 AM
Great article. I have to agree with what is said here, most organizations start off with great ideas in mind, but then end up falling off because of the lack of funding structure. A strong funding structure is just as important as a good business plan, and may be what enables you to do great things with your NPO. That being said, sometimes lack of knowledge for how to fund and that there is even such a thing as a funding structure may be why so many organizations don’t have one - so I think the key here is to create greater awareness about the different funding structure models, and emphasize the importance of having one.
BY Donald Summers
ON September 19, 2011 04:56 PM
Very well done—there are scandalously few tools and approaches to effectively help non-profits grow their revenue. Most of the literature on “fund raising” is of marginal utility at best.
That said, I suggest there’s a simpler, more effective, and concise means to hit upon the optimum revenue model.
Write a business plan. The org should define its value prop and why it is uniquely situated as the best player to execute its mission. Then, define strategy, metrics and milestones. Cost out the resources to get there. And then define best-practice means of driving revenue from all 5 funding domains: agency, corp, foundation, individual, and earned income.
Caveat: this requires someone with the skill to write a good plan and an ability to play the whole funding keyboard.
And that’s where the sector is starving for affordable help. IMHO, it’s the only “capacity building” issue we should be talking about.
Bridgespan is a blue-chip business capacity builder—bravo to this obviously stellar shop—but I wonder if their services are in reach of the vast majority of non-profits. Many of our ~1 million small non-profits have excellent program models. But with budgets hovering around $300K, the challenge is not hitting on the right funding model, it’s hiring the talent to help.
BY Mary Henton, Congo Initiative
ON September 21, 2011 02:48 PM
Thank you. Very helpful article. We are a small, but fast-growing organization. Our US-based fund-raising operations have been serendipitous (unsolicited gifts, consistent donor organizations, individual donations campaign), as we have only 1 part-time paid “employee” stateside who is supported and assisted by a couple of volunteers. We are at a point of identifying how best to grow our US capacity to better support the DRC operations. This article is very helpful.
BY Judith Tabak
ON September 26, 2011 11:31 AM
Great.
BY Dick
ON September 26, 2011 11:49 AM
Great article! Funding models are required, I believe, for non profits especially if the non-profit organization is growing. And to reiterate the comment made by Mr. Japhet, there are companies that do provide financial aid but they don’t reach the intended beneficiaries. And that’s where organizations that use a funding model come out on top. To give you an example, http://www.buyve.com gives towards education based scholarships and through the funding model that’s in place at most of these places they make sure that the money reaches the intended recipients. This article is an absolute necessity in my opinion to every non profit organization.
BY Philip Adolwa, CARE
ON September 30, 2011 09:52 AM
Good article and excellent, practical framework.
BY Aaron Hurst, Founder of Taproot Foundation
ON October 8, 2011 04:45 PM
These three pieces are some of the most helpful thought leadership out there. Finding an effective funding model, executing and keeping it going has been far harder for us than designing better and new programs. Running a nonprofit would be a hell of a lot easier if it was as simply as finding programatic solutions to challenges. I suspect few outside the sector realize this reality.
BY Lindsay Miller, seToolblet
ON October 17, 2011 11:59 AM
Fantastic article! We’ve added it to the seToolbelt, a free open-content resource directory for social entrepreneurs. Don’t miss this other great article (by some of the same authors) on funding models: http://www.setoolbelt.org/resources/315
BY Sandra Price, JD, Ph.D
ON December 8, 2016 08:17 PM
I’m just stumbling across this article in 2016! I have been using the Stanford article Ten Nonprofit Funding Models in my Nonprofit Organizations course at Arizona State University for the last few years, and I would take issue with the comment in this follow-on article that small organizations don’t need a funding model until they hit the $3 million revenue mark, and here’s why: (1) Thinking through the funding models helps a non-profit identify their most likely partners, whether they are seeking (small) government contracts or holding spring and winter (heartfelt connector) fundraisers; (2) Understanding your best funding partner “fit” helps at any stage, and if you feel you need to grow because the need is much larger than your capacity, keeping the “fit” in mind as you make strategic decisions is like staying aligned with your mission. When the time is ripe, you’re already prepared and on the right track. I appreciate Stanford’s wealth of information. Keep it coming!