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What is Your Fundraising Model? Featured

What is Your Fundraising Model? Kamil Kalkan

Developing a funding strategy for a nonprofit is a challenge that is sometimes hard to surmount. For a nonprofit to be successful, it must have a proper funding model that ensures it is liquid and can fund its operations, mission and vision. These models do not have to be general to be useful. A funding model is a methodological and standardized method of building a reliable revenue base to support an organization's core programs and services. Although many nonprofits seek funding from various sources, research has shown that 90 percent of the largest embraced funding models built around a single revenue source. Here are a few funding models you can consider for your nonprofit.

  1. Heartfelt connector

Most nonprofits grow big by focusing mainly on causes that resonate with the current concerns of most people at all income levels. These organizations grow big by creating a structured way for people from all income levels and developing a structured approach. An example of such a nonprofits is Make-a-Wish Foundation. These nonprofits use the Heartfelt Connector funding model, which tries to build connections between the volunteers through fundraising events. Some of the causes that use this model are environmental, medical research and international causes. Questions asked when developing a heartfelt connector model include:

  • Can the areas that are compelling about your company be communicated in a simple and concise manner?
  • Have many people already shown that they will fund your cause in this domain?
  • Does a natural avenue to attract and involve large numbers of volunteers exist?
  1. Beneficiary builder

Some nonprofit organizations, like the Cleveland Clinic, get reimbursements for the services they provide to certain people. However, they rely on people that have benefited in the past from the nonprofit's services for more donations. Examples of Beneficiary Builders are universities and hospitals. Most funding for these nonprofits comes from fees paid by beneficiaries for the services offered by the nonprofits. Nonprofits will therefore try to build long-term relationships with people that have benefitted from the service to provide supplemental support; this brings about the name beneficiary builder.

  1. Big bettor

This model is used by a few nonprofits, such as Stanley Medical Research Institute. Nonprofits using this model rely on major grants from a few people or foundations to fund their causes or operations. With this model, the primary donor is also a founder who wants to tackle a problem that they are deeply concerned with. Although these models launch with significant financial backing already secured, allowing fast growth, there are instances where an existing organization gets funding from one major donor who wants to fund a new way of funding a problem.

  1. Public Provider

This fundraising model entails working with government agencies to offer essential social media services like human services, housing and education, which government usually defines and allocates funding. Nonprofits using the public provider fundraising model outsource service delivery functions in such instances but simultaneously establish requirements to receive funding. Those thinking of this model try to consider if their organizations are a natural match with more or large preexisting government programs if they can demonstrate that their organizations will do better and if they are willing to take better time to secure renewal of contracts regularly.

  1. Policy innovator

Some nonprofits rely more on government money. They use this model to address social issues incompatible with the government's prevailing funding programs. The organizations convince the government funders to support alternative methods by presenting their solutions as more effective and cheaper than the existing fundraising methods.

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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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