Ten Nonprofit Funding Models

10. LOCAL NATIONALIZER There are a number of nonprofits, such as Big Brothers Big Sisters of America, that have grown large by creating a national network of locally based operations. These nonprofits use a funding model we call Local Nationalizers. These organizations focus on issues, such as poor schools or children in need of adult role models, that are important to local communities across the country, where government alone can’t solve the problem. Most of the money for programs is raised locally, often from individual or corporate donations and special events. Very little of the money comes from government agencies or fees. Very few local operations exceed $5 million in size, but, in totality they can be quite large. Teach for America (TFA) is an example of a nonprofit that uses a Local Nationalizer funding model. TFA recruits, trains, and places recent college graduates into teaching positions in schools across the country. TFA was founded in 1989, and by 2007 had more than $90 million in annual revenues. The organization relies on its 26 regional TFA offices to raise more than 75 percent of its funding. The reason this works is that TFA’s mission—improving the quality of K-12 education—resonates with local funders. TFA developed a culture in which fundraising is considered a critical aspect of the organization at every level, and it recruited local executive directors who would take ownership of attracting regional funding growth. Nonprofit leaders considering the Local Nationalizer funding model should ask themselves the following questions:
* Does our cause address an issue that local leaders consider a high priority, and is this issue compelling in communities across the country?
* Does expanding our organization into other communities fulfill our mission?
* Can we replicate our model in other communities?
* Are we committed to identifying and empowering high-performing leaders to run local branches of our organization in other communities?