Wednesday Buzz: An Experimental Way to Finance Nonprofits

A new approach to funding philanthropic organizations adds a layer of accountability. Also: Should you sell your education offering to corporate members?

There’s a new nonprofit funding game in town.

On Tuesday, NPX, a nonprofit funding company, announced the launch of an experimental financial program that connects donations and investments in philanthropic organizations to performance, reports The New York Times.

“Here is how it works: A group of donors contributes to what is called a ‘donor fund.’ A separate group of investors—who expect to get their money back and more—buy into performance-based bonds,” explains Andrew Ross Sorkin. “The money raised from the bonds is used to finance the nonprofit. If the organization achieves a certain set of goals, the donor funds are then—and only then—used to pay off the bondholders.”

What happens if the nonprofit fails to reach its target? The investors could lose their financial contribution, but the donors can redeploy any remaining funds to other nonprofits.

TED also recently announced a new nonprofit funding program called the Audacious Project. It injects huge amounts of funding into a nonprofit all at once, which helps to alleviate the grind of constant fundraising.

Learning and Sharing

In the hunt to maximize every dollar that you put into your education programs? Perhaps it’s worth considering selling those programs to a corporate member. In a new post on its blog, WBT Systems describes the growing popularity of such programs, and points out that they can help build both revenue and future loyalty among those exposed to your organization’s way of thinking.

“If you keep your corporate customers happy, you’ll enjoy increased recurring revenue in years to come,” the blog post states. “Your educational programs will be exposed to a larger audience—all of whom can spread their satisfaction with your programs through word-of-mouth marketing. When employees switch to new employers, they’ll take their loyalty to your programs with them.”

Other Links of Note

Do good leaders need to be bold and brash? Fast Company discusses the power of “quiet” leadership.

Membership acquisition strategies often cost a lot of money. WebScribble shares five no-cost tactics to try.

Infographic of the Day: Make your content more effective and compelling by following these tips shared by Social Media Today.

(Vitaliy_ph/iStock/Getty Images Plus)

Raegan Johnson

By Raegan Johnson

Raegan Johnson is a contributor to Associations Now. MORE

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