<Financial Funding Models #9-10>

Hello, STEEMIT Community!

Today, we will introduce the last two nonprofit financial funding models and wrap up this series!

If you are interested in learning about the other models, please see our previous posts for reference.

#9

The ninth type is called Market Maker. These organizations attempt to connect altruistic donors and a market. The nonprofit organization generates revenue from fees or donations associated with their activities. When there is enough money available to pay for a particular service, but it is unlawful for a for-profit organization to do so, this type is appropriate. Many of this type operate in the healthcare industry or environmental protection.

For example, organ donation is this Market Maker type. There is always a constant demand for human organs, but it is illegal to sell them. The American Kidney Fund (AKF), established in 1971, has been working to provide financial aid for low-income patients with kidney failure requiring dialysis. In the United States, prior to 1996, healthcare providers could pay insurance premiums (20 percent of total costs) for needy dialysis patients. However, fearing that a patient can be trapped into receiving dialysis from a particular provider, the federal government passed new legislation in 1996 to make that illegal. Due to this new legislation, thousands of kidney patients were left unable to afford kidney treatment. Since then, AKF has been working to pay these premiums, allowing patients to continue their treatment. According to statistics from AKF (2016), nearly half a million Americans depend on dialysis to survive. Out of those, one of every five patients, nearly 100,000 have asked AKF for assistance. AKF is financially funded mainly by donations from healthcare providers and other corporations.

#10

The tenth and final funding model is called Local Nationalizer. These organizations are national networks of locally based operations. These organizations focus on specific issues the local communities care about, such as low income schools or children lacking mentor figures, but the government cannot solve alone. Most of the income is raised locally, from individuals or corporate donations. Very little financial support is received from the government. The local operations are small in size, but the national sum is quite large.

Teach for America (TFA) is a good example of this type. TFA recruits, trains, and places recent college graduates into teaching positions in schools across the country. Founded in 1989, TFA recorded an annual revenue of $90 million in 2007. More than 75 percent of this comes from its regional offices. TFA’s mission of improving the quality of K-12 education is important to local communities. Since their funding model is dependent upon local engagement, TFA focuses heavily on attracting regional funding growth.

What Nonprofits should think about

It is very easy for nonprofit organizations to take money from wherever they can find it. However, this is a mistake because it will steer the nonprofit off course. Among all the funding models we have discussed, the nonprofit leaders should examine and determine their funding strategy and be disciplined about the way their funds are raised. Also, being clear and transparent about their funding strategy will be beneficial for the nonprofit. On the other side of the table, philanthropists are looking for increasingly disciplined nonprofits for their investments. Since having a clear set funding model will improve the long-term growth potential, it is vital for anyone interested to understand all the financial funding model types.

Wrapping Up!

We have introduced all ten of the financial funding models for nonprofit organizations! Thanks for reading this series and we hope that it was informational for you! It was definitely helpful for us. At Raise Uganda Now, we are striving to achieve the maximum clarity and transparency when it comes to supporting our 45 children at our orphanage. If you would like to learn more, please get in contact with us!

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