This featured topic is one of the most critical in contributing to your ability to not only successfully launch but also sustain your venture.
Big Ideas Summary
Avenues for Financing. Here are some possible avenues to explore when seeking financing for your social venture.
o Government grants and financing range from loans to tax credits to access to equity investors. (These will be jurisdiction-specific so do a bit of research on your local and national government offerings.)
o Investors come in two types: venture capitalists and angel investors. They take risks on start-ups by investing money into your for-profit venture with the expectation of ROI (principal plus profit).
o Crowdfunding is a new avenue to generate lots of small amounts of money from individual donors. Check out StartSomeGood for more info.
o Private Foundations are an excellent option for not-for-profit ventures. Check out Funds for NGOs. Corporate sponsorships can be great cash injections for both types of ventures.
o Loans, if eligible, can offer some initial seed money to for-profit social ventures. Various financial institutions offer them including credit unions and banks. Organizations such as Kiva also support traditional entrepreneurs through loans.
o Fellowships are less common and can offer anything from seed grants to on-going stipends. Find out more about fellowships through Ashoka.
Ten Non-Profit Funding Models. Companies rely on business models. Non-profits require a framework for funding also. Here are ten models outlined by authors William Landes Foster, Peter Kim, & Barbara Christiansen.
Income Statement. Essentially a budget of projected revenue and projected expenditures expected during a specific timeframe. Check out this Income Statement Basics: What’s Behind the Bottom Line webinar by Non-profit Assistance Funds.
Balance Sheet. This is a “snap shot’ of the financial state of your social venture at a given point in time. It shows what the venture owns (assets), what is owed (liabilities) and what is left over (equity). Check out this Balance Sheet Basics webinar developed by Non-profit Assistance Funds.
Cash Flow. A table of the flow of cash (and cash equivalents) into and out of your organization during a specific period. It includes details on when (month or quarter), and where, the money will come from and what it will be spent on. Use this helpful template created by Non-profit Assistance Funds.
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