Updated: Feb 4, 2022
In the last blog post, we focused on "Make an Impact without Grant Funding" #Funding Goals. Next, we'll dive deeper into funding models and how they create financial clarity in social impact organizations.
Strategy and financial clarity are imperative for operating a successful business. Yes, nonprofits are a business aimed to solve social issues community. Unfortunately, nonprofits get stuck in a rut of running programs and asking for funding. They think core funding such as government grants or foundation funding will provide them with the financial stability and movement of new programs and services they need to be impactful.
Foundations and government rarely FUND new programs and services without evidence that the current programs"already in place are working" and proof that they will be sustainable for new ones.
The caveat to that is Impact is one of the most poorly defined and most misunderstood terms in the nonprofit world. So how can you put a value on IMPACT? Nonprofit leaders are focused on doing the work and don’t know what and how to measure IMPACT in a way that informs and inspires their community. But where going to help you with that tuhday!
Quick Recap, a funding model, is a strategic and standardized approach to building a reliable revenue base to support an organization’s core programs and services. In other words, how you can grow an organization without being overly dependent on government funding.
We hope we get government funding, donations." Operating on "hope" and not a funding strategy usually results in:
Programs cut, delayed, or never started.
Funds do not flow to other essential areas such as staff development, salaries.
CEO and Staff burnout that means high turnover
A chaotic scramble in all efforts, especially in fundraising attempts
Inability to present proficient grants proposals that win funding
Every nonprofit needs a fundraising strategy to ensure funds are available each year to meet programs expenses AND it should not be 97.8% funded by the founder.
Before we go into different funding models, we first need to review the expenses and determine a budget to fulfill the organization's mission. This needs to be resolved first because it gives the framework for fundraising. Therefore, we created an excel template,” Get Your $ Together to assist in maintaining the nonprofit’s annual budget.
Example: Our mission is to provide a healthy breakfast for children BEFORE school, aiming to improve children's health and grades because a healthy diet increases focus.
What are the Impact goals for the year? For the sake of math, let’s say our data states 1,000 children in the area do not have access to healthy breakfast before school, and it affects their grades.
What do we need to accomplish the goal and feed 1,000 children healthy meals?