Funding alternatives are needed

By: Mark Randall – originally posted April 27, 2015 on LinkedIn.

Change is hard. Organizational change can be extremely hard. Philosophical change is near impossible. However, for the sake of survival, many nonprofits need to embrace for-profit ways of funding.

Not-for-profit funding typically relies on generous donors. Donations come from individuals, corporations, golf events, banquets, walkathons, endowments, passing the plate, text messages, stocks, silent auctions, cars, foundations, and so on. The goal is to get enough donations to cover their annual budget using any reasonable means by which they can compel someone to donate.

Every Donation is special, and Nonprofit organizations should continue to work hard to expand their support base. Yet, as awesome as the ideal of personal sponsorship is, there just never seems to be enough money to go around, and to open a can of worms, an honest evaluation of nonprofits’ success with employing ethnic minorities quickly reveals they have a funding problem!

It’s like a one legged stool. The nonprofit balances its future on one leg called donations. It’s tough and tiresome to balance on one leg. I believe, to survive for very long in today’s fast paced, secular society, nonprofits need more legs to stand on; an organizational and philosophical shift in expanded funding is needed.

“What could possibly constitute additional legs of funding for nonprofits,” you ask?

One way could be for philanthropic minded businessmen to apply their talents and create for-profit businesses with the primary purpose of creating additional funding legs for their favorite nonprofit, as opposed to seeking only personal gain.

Here’s one for-profit idea: what if a wealthy individual bought or built a 20 unit apartment building in an inner city setting. Then an employee of a nearby neighborhood nonprofit lives in and manages the building for the wealthy individual. The wealthy individual expands their net worth with real estate. The nonprofit employee gets free housing and a decent income (10% of gross rents) for a part-time, very flexible, property manager job. The rest of their time, the nonprofit employee can devote to the cause they passionately signed up for in the first place. In this scenario, funding needs for the nonprofit have been dramatically reduced by the for-profit business.

One thing is clear: Fund development efforts for nonprofits have to expand beyond donations in order to survive in the future!