Money is a constant topic of conversation among nonprofit leaders: How much do we need? Where can we find it? Why isn’t there more of it? In tough economic times, these types of questions become more frequent and pressing. Unfortunately, the answers are not readily available. That’s because nonprofit leaders are much more sophisticated about creating programs than they are about funding their organizations, and philanthropists often struggle to understand the impact (and limitations) of their donations.
There are consequences to this fi nancial fuzziness. When nonprofits and funding sources are not well matched, money doesn’t flow to the areas where it will do the greatest good. Too often, the result is that promising programs are cut, curtailed, or never launched. And when dollars become tight, a chaotic fundraising scramble is all the more likely to ensue.1
In the for-profit world, by contrast, there is a much higher degree of clarity on financial issues. This is particularly true when it comes to understanding how different businesses operate, which can be encapsulated in a set of principles known as business models. Although there is no definitive list of corporate business models,2 there is enough agreement about what they mean that investors and executives alike can engage in sophisticated conversations about any given company’s strategy. When a person says that a company is a “low-cost provider” or a “fast follower,” the main outlines of how that company operates are pretty clear. Similarly, stating that a company is using “the razor and the razor blade” model describes a type of ongoing customer relationship that applies far beyond shaving products.
To read the entire article graciously shared with us by the Stanford Social Innovation Review and Bridgespan Group, go to
On December 2, join Bridgespan Group Partner William Foster, author of the Stanford Social Innovation Review article "Ten Nonprofit Funding Models," for a live webinar during which he will share some guiding principles to help nonprofit organizations develop greater clarity about meeting their longer-term fundraising goals.
Learn more and register at https://video.webcasts.com/events/pmny001/viewer/index.jsp?eventid=32821