Ten Nonprofit Funding Models

7. BENEFICIARY BROKERSome nonprofits, such as the Iowa Student Loan Liquidity Corporation, compete with one another to provide government-funded or backed services to beneficiaries. Nonprofits that do this use what we call a Beneficiary Broker funding model. Among the areas where Beneficiary Brokers compete are housing, employment services, health care, and student loans. What distinguishes these nonprofits from other government-funded programs is that the beneficiaries are free to choose the nonprofit from which they will get the service. The Metropolitan Boston Housing Partnership (MBHP), a regional nonprofit administering state and federal rental assistance voucher programs in 30 Massachusetts communities, is an example of a nonprofit that uses the Beneficiary Broker funding model. Since launching the organization in 1991, MBHP has developed a reputation as a reliable provider of housing vouchers for families in need. MBHP is the largest provider of housing vouchers in the Boston area, connecting more than 7,500 families to housing at any one time. MBHP also provides related services, such as education and homelessness prevention programs. More than 90 percent of MBHP’s revenue comes from the small administrative fees the state provides as part of the voucher program. The remaining funds come from corporations and foundations. Nonprofit leaders considering the Beneficiary Broker funding model should ask themselves the following questions:
* Can we demonstrate to the government our superior ability to connect benefit or voucher holders with benefits, such as successful placement rates and customer satisfaction feedback?
* Can we develop supplemental services that maximize the value of the benefit?
* Can we master the government regulations and requirements needed to be a provider of these benefits?
* Can we fi nd ways to raise money to supplement the fees we receive from the benefits program?