Category Archives: philanthropy

10 Funding Models for Non-profit Organizations

Sustainability is the one issue that comes up time and again in operating a non-profit organization or ministry organization. While it is not easy to discuss funding and finances especially in faith-based endeavors, they are very much a real world necessity.

The Stanford Social Innovation Review (Spring 2009) published this very valuable article, Ten Nonprofit Funding Models, by William Foster, Peter Kim, Barbara Christiansen. Thanks to The Bridgespan Group for linking to it as a blog post. The original article is also available in PDF format. Here’s an excerpt that introduces the complexity of non-profits when compared to a for-profit business:

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. …

… The nonprofit world rarely engages in equally clear and succinct conversations about an organization’s long- term funding strategy. That is because the different types of funding that fuel nonprofits have never been clearly defined. More than a poverty of language, this represents—and results in—a poverty of understanding and clear thinking.

Through our research, we have identified 10 nonprofit models that are commonly used by the largest nonprofits in the United States. Our intent is not to prescribe a single approach for a given nonprofit to pursue. Instead, we hope to help nonprofit leaders articulate more clearly the models that they believe could support the growth of their organizations, and use that insight to examine the potential and constraints associated with those models.

… One reason why the nonprofit sector has not developed its own lexicon of funding models is that running a nonprofit is generally more complicated than running a comparable size for-profit business. When a for-profit business finds a way to create value for a customer, it has generally found its source of revenue; the customer pays for the value. With rare exceptions, that is not true in the nonprofit sector. When a nonprofit finds a way to create value for a beneficiary… it has not identified its economic engine. That is a separate step.

… As a result of this distinction between beneficiary and funder, the critical aspects (and accompanying vocabulary) of nonprofit funding models need to be understood separately from those of the for-profit world. It is also why we use the term funding model rather than business model to describe the framework. … A funding model, however, focuses only on the funding, not on the programs and services offered to the beneficiary.

Read the entire article for the 10 funding models.

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seminary scholarship funds

For those seeking funding help for theological graduate school and seminary education, here is a list of seminary scholarship funds that I have found (each may have specific qualifications):

Also see this Seminary Bound blog — for info from the experiences of individuals with various seminaries.

Please add a comment with other seminary scholarship information.

Philanthropy in the US vs. China

In this Wall Street Journal article, Understanding American Philanthropy, a compare and contrast is made between American philanthropy and the potential for philanthropy in China::

Recent statistics about the growth of Chinese wealth caught mainstream-media attention in the U.S., with both The Wall Street Journal and the New York Times gasping at the number of Chinese billionaires (106, second only to the U.S.) and the number of Chinese households with investible assets of at least $1 million (310,000, fifth after the U.S., Japan, U.K. and Germany).

… over the past 40 years Americans have donated, on average, about 1.8% of their annual gross domestic product.

This couldn’t be further from the traditional Chinese belief that “fertile water should be kept to your own soil” — wealth should be passed down through families. Confucian belief also holds that charitable donations should be done quietly, and a man of virtue should shy from fame.

Read the full article >>

Also, read the Chinese version of this article.

Donors Increasingly Make Their Big Gifts Anonymously

Mirrored from Philanthropy Today::

Last October, the University of Cincinnati and Ohio State University announced $20-million gifts on the same day. Both gifts supported space research and both set up endowed chairs in space exploration — named for, of all people, President Thomas Jefferson. It stands to reason that the same individual, someone with an interest in Ohio, early U.S. democracy, and galaxies far, far away made both gifts.

But no one knows for sure, because a “Deep Throat”-like secrecy surrounded the donations. They were announced as anonymous, and no one at the university foundations, which handled the gifts, knows the name of the donor, either. He or she worked only through a lawyer and never hinted at any motivation. And neither university knew of the other’s gift until just before it planned to announce its own, when they received joint instructions from the lawyer on how to promote the gifts.

Not all anonymous gifts are such clandestine operations, but more and more nonprofit organizations find themselves in the same position as the Ohio universities. Anonymous charity hasn’t had a year like 2007 in recent memory, which left many nonprofit groups with big checks but little they could say about them.

… According to The Chronicle’s compilation of gifts of $1-million or more announced in 2007, unnamed donors pledged or gave at least 87 donations of $1-million, including 23 gifts of more than $10-million and four gifts of $100-million or more. The donations totaled just under $1.1-billion, greater than all but the single largest gift of 2007. Their sum far exceeds the Chronicle’s total of large anonymous gifts in 2006 ($672-million) and 2005 ($196-million).

>> Read the full article titled Donors Increasingly Make Their Big Gifts Anonymously

Charities in China Face Government Limits

Mirrored from Philanthropy Today::

As a growing number of charities are sprouting in China, the country’s government has been grappling with how much independence to give such organizations, The Wall Street Journal reports [in its article, “In China, Grass-Roots Groups Stretch Limits on Activism“].

Chinese leaders worry “that too much civil society could stir up conflict, challenge its grip, and put at risk stability that has underpinned 25 years of fast economic growth,” the newspaper says.

To illustrate the challenges facing charities, the newspaper looks at the efforts of one woman to create a working farm for autistic children. Ma Chen, who has an autistic daughter, would like to set up a charity to accept tax-free donations, but China does not have a charities law. She and other nonprofit leaders hope that such a law will be discussed at the Chinese parliament’s annual session in March.

To learn more about the growth of nonprofit organizations in China, read The Chronicle’s special report. (A paid subscription or short-term pass is required to view the Chronicle article.)

Major Donors Become Growing Force in China

This blog post from the Philanthropy Today reports of a newer development in China’s philanthropy:

Major Donors Become Growing Force in China

Li Ka-shing, Asia’s wealthiest man, is giving a big chunk of his fortune to charity and leading a major change in how philanthropy is conducted in China, reports The Wall Street Journal.

While the Communist party has traditionally clamped down on privately financed institutions as a threat to its own power, and family values tend to dictate that money be given away quietly or kept within the family unit, the recent efforts of Mr. Li and other Chinese philanthropists may signal that times are changing.

Last year Mr. Li announced that he would give roughly $10-billion to his Li Ka Shing Foundation, an amount that rivals many of the wealthiest American foundations.

His announcement seems to have spurred other wealthy people to undertake philanthropic endeavors as part of a growing recognition in Asia of the gap between rich and poor.

Also see the Chronicles of Philanthropy’s article, Building a Spirit of Generosity: China’s biggest donor has many admirers — and critics; and, the Wall Street Journal article, The Revolution of Chairman Li: China’s Richest Man Leads Others to Give, Bucking Nation’s Taboos.

Asian American Philanthropy lagging its population growth

There is a growing need for funding to serve Asian Americans and Pacific Islanders, not only by the largest U.S. foundations, but also by Asian Americans themselves. (With Asian Americans on the whole having the highest graduation rates in education and highest median household income, this suggests that Asian Americans do have a lot to contribute.)

New Report Shows Key Gaps in Funding for Asian Americans and Pacific Islanders::

The giving trends of the top U.S. foundations to Asian American and Pacific Islander (AAPI) communities has not kept pace with the growth of these communities or of foundation assets, according to a new report released on June 21, 2007 by Asian Americans/Pacific Islanders in Philanthropy (AAPIP). The report, Growing Opportunities, looks at the country’s top 20 national foundations’ grantmaking between 1990 and 2002 and finds significant funding disparities to AAPI communities in several areas. The report concludes with a call to action to the philanthropy field to reduce these gaps.

Read the full report, Growing Opportunities: Will Funding Follow the Rise in Foundation Assets and Growth of AAPI Populations? [ht: ISAAC community bulletin board]

cf. The Chronicle of Philanthropy mentioned about this report in their article Foundation Support Stagnates for Asian-American Causes