There is NO SUCH THING as a Sustainable Funding Model

Organisations must recognise that achieving sustainability (including funding sustainability) at a point in time does not mean sustainability is assured for good.

Take one of Stanford’s funding models as an example.

The Beneficiary Builder model is used by institutions, like universities, that charge for services at the point of delivery but also receive substantial donations from beneficiaries who have benefited from those services in the past.

All that needs to change for that model to move from sustainable to unsustainable is a drop-off in the emotive response people have about the educational institutions they attended.

This is a shift in values that could potentially occur over a period as short as five or ten years.

Sustainability is not a year-to-year proposition, but by its very nature it is a long-term pursuit with short-term actions.

You need to “think long, act short”.

We deep-dive into this in our white paper “In Search of Sustainability“.

There is a simple and universal truth that gets covered in intellectual complexity – organisations stay relevant by delivering more value than their competitors.

Let’s not be coy either, competition is strong in the social sector.

In order to be sustainable, organisations must focus on what value will be demanded in the future and deliver better value than anyone else.

And note that “better than anyone else” does not mean delivering value alone.

This constantly shifting value demand landscape will call for the collaboration of different skills at different times, which is another shift that will (and indeed, already is) fundamentally changing how the sector operates.

Not-for-profit strategic and funding planning is often based on the premise that “We need what we have to deliver what we do.”

So the question to be answered by the strategy or planning process becomes “How do we fund what we have for longer?”

Unhappily, many organisations respond to this question by trying to bolt on new income streams to existing business models in a bid to plug funding gaps.

Conversely, sustainable logic asks “What mission will make sense tomorrow, what will be needed to meet this mission and where is the best place to get each part of what’s needed?”

And then (and only then), once the approach for meeting demand in the future starts to take shape, “What funding model will support this?”

The challenge is in being able to track current, emerging and future value demands on an ongoing basis and in fundamentally adapting business models to deliver this value better than anyone else can.

Sustainability comes from adopting flexible, adaptive business models, not from preserving and bending existing ones.

Delivering the best value will require the best business model, and it’s the business model that will determine the appropriate funding model.

If you are looking for ways to fill funding gaps, start with an examination of your mission and business model.

Think long, act short.

Learn more about finding the holy grail of sustainability in our whitepaper

In Search of Sustainability“.