1. Social Entrepreneurship Challenge
Good Morning!!
The Aaron L. Levitt
Social Entrepreneurship Challenge
“Be a Changemaker”
Workshop 3:
Funding and Financing your Social Venture
March 9, 2019

2. Welcome to Today’s Session
Funding and Financing Workshop March 2013
5/25/2019
Welcome to Today’s Session
Agenda:
Upcoming Levitt Program Activities
Reporting Out: Each person/team is to present a succinct explanation of their social venture and logic model (maximum of five minutes per venture!!)
Brief Introduction to Capital Structure and the Core Elements of a Useful Business Plan
Funding, Financing, and New Enterprise Development
Revenues, Revenue Models, and Funding
Questions and Discussion
Dave
Levitt Social Entrepreneurship Challenge: Midwest Center for Nonprofit Leadership

3. The May Levitt Challenge
Funding and Financing Workshop March 2013
5/25/2019
The May Levitt Challenge
March 30: Workshop #4 Preparing Dynamic Business Plans
April 11: Business Plan Drafts Due – CANNOT BE LATE
April 22: Business Plan Drafts returned
May 3: Final Business Plan Due – again CANNOT BE LATE
May 4: Workshop #5 Creating Presentations with Impact and Sizzle
May 13, 2019: The Midwest Symposium on Social Entrepreneurship, including
Aaron L. Levitt Social Entrepreneurship Challenge program on Monday, May
Dave
Levitt Social Entrepreneurship Challenge: Midwest Center for Nonprofit Leadership

4. Funding and Financing Workshop March 2013
5/25/2019
Let’s Hear From You!
Each project has a maximum of five minutes to present a succinct explanation of the social venture and the key elements of its underlying logic model.
Dave
Levitt Social Entrepreneurship Challenge: Midwest Center for Nonprofit Leadership

5. Funding, Financing, and New Enterprise Development
Funding and Financing Workshop March 2013
5/25/2019
Funding, Financing, and New Enterprise Development
Scott
Levitt Social Entrepreneurship Challenge: Midwest Center for Nonprofit Leadership

6. Dual Bottom Line Matrix
Mission Impact
High Mission
Low Sustainability
High Sustainability
Low Mission
Financial Sustainability
Midwest Center for Nonprofit Leadership / UMKC

7. Nonprofit Resource Considerations
Funding and Financing Workshop March 2013
5/25/2019
Nonprofit Resource Considerations
Consistent with Strategy
Program Stability
Capital Structure
Restriction
Transaction Cost
Scott
Levitt Social Entrepreneurship Challenge: Midwest Center for Nonprofit Leadership

8. Understanding Financial Resources
Funding and Financing Workshop March 2013
5/25/2019
Understanding Financial Resources
Revenue: Monies from contracted services, fees for service, commercial activity
Medicare
Tuition
Capital: All other monies donated to support mission delivery activities
Individual donations
Grants
Scott
Levitt Social Entrepreneurship Challenge: Midwest Center for Nonprofit Leadership

9. 2015 Contributions: $373.2 billion by source of contributions (Giving USA)
Giving by individuals comprised 72 percent of total giving in
Giving by foundations—which includes grants made by independent, community, and operating foundations—amounted to 15 percent of all gifts made in
Giving by bequest accounted for 8 percent of all gifts made in 2013.
Giving by individuals, bequest, and family foundations amounted to an estimated 87 percent of total giving in
Giving by corporations comprised 5 percent of total giving in 2013.

10. Individual Giving
Giving USA

11. Foundation Giving
Midwest Center for Nonprofit Leadership

12. 2015 Contributions: $373.2 billion by type of recipient organization (Giving USA)
Religious organizations received the largest share of charitable dollars in 2013, at 31 percent of the total.4
The education subsector received the second-largest share of charitable dollars in 2013, at 16 percent of the total.
Human services organizations received 12 percent of total charitable dollars in 2013, ranking third in total gifts received.
Gifts to independent, community, and operating grantmaking foundations amounted to the fourth-largest share of charitable dollars in 2013, with 11 percent of the total.
The health subsector received the fifth-largest share of charitable dollars in 2013, at 10 percent of the total.
Public-society benefit organizations received 7 percent of total charitable dollars in 2013, ranking sixth in total gifts received.
The arts, culture, and humanities subsector received the seventh-largest proportion of charitable dollars in 2013, at 5 percent of the total.
Gifts to the international affairs subsector amounted to the eighth-largest share of charitable dollars in 2013, with 4 percent of the total.
Environment/animals organizations received 3 percent of total charitable dollars in 2013, ranking ninth in total gifts received.
Gifts made directly to individuals amounted to one percent of total charitable dollars in 2013.

13. Sources of Revenue (for public charities in US, 2014: NCCS)
PA5553: Legal & Financial Management of Nonprofits: Legal Framework
Sources of Revenue (for public charities in US, 2014: NCCS)
Fees for goods & services: 72.0%
Fees from private sources: 47.5%
Fees from government sources: 24.5%
“Public support”: 21.3%
Private contributions: 13.3%
Government grants: 8.0%
Investment income: 4.8%
Other income: 1.9%
Midwest Center for Nonprofit Leadership
(c) 2016 David Renz: Midwest Center for Nonprofit Leadership at UMKC

14. A Different Perspective
Funding and Financing Workshop March 2013
5/25/2019
A Different Perspective
Revenue Type
Beneficiary
Restriction
Fee-for-service income
Individual
Tied to service
Foundation /Philanthropy dollars
Collective to groups
Temp Restricted/Unrestricted
Government/Philanthropy dollars
Society wide
Corporation dollars
Corporations and nonprofits
Unrestricted
From Dennis Young, Financing Nonprofits.
Scott
Levitt Social Entrepreneurship Challenge: Midwest Center for Nonprofit Leadership

15. Funding and Financing Workshop March 2013
5/25/2019
Capital
Facilities
Working
Permanent
Social ???
Scott
Levitt Social Entrepreneurship Challenge: Midwest Center for Nonprofit Leadership

16. Funding and Financing Workshop March 2013
5/25/2019
Sources of Capital
Grants
Gifts and Donations
Debt
Loans
Bonds
Scott
Levitt Social Entrepreneurship Challenge: Midwest Center for Nonprofit Leadership

17. Nonprofit Revenue Models and Funding Dynamics
University of Missouri – Kansas City
Understanding Revenues
and Revenue Models
Midwest Center for Nonprofit Leadership at UMKC
David Renz: PA 5529 CSR and Social Entrepreneurship

18. Revenue Model (or Funding Model)
Nonprofit Revenue Models and Funding Dynamics
Revenue Model (or Funding Model)
The Work of the Organization
Revenue Type A
Revenue Type B
Revenue Type C
Midwest Center for Nonprofit Leadership at UMKC
David Renz: PA 5529 CSR and Social Entrepreneurship

19. Key Elements of Revenue Model
Nonprofit Revenue Models and Funding Dynamics
Key Elements of Revenue Model
The Specific Type(s) of Revenues(s)
The Adequacy of the Total Revenue
The Characteristics of the Revenue(s)
The Mix of Revenue Types
Balance
Diversity
Midwest Center for Nonprofit Leadership at UMKC
David Renz: PA 5529 CSR and Social Entrepreneurship

20. Key Revenue Model Considerations
Nonprofit Revenue Models and Funding Dynamics
5/25/2019
Key Revenue Model Considerations
Degree of Financial Independence (especially, associated with source)
Capital Structure
Nature of Assets
Funding Dynamics
How Resources Come In (Flow, Timing, etc.)
Midwest Center for Nonprofit Leadership at UMKC
David Renz: PA 5529 CSR and Social Entrepreneurship

21. Capital Structure The nature of the venture’s financial Assets
Liabilities
Net assets
Need to understand in terms of:
Adequacy and alignment of assets you have and what you will need
Diversity and Liquidity (esp. restriction and fixedness)
Risk that is inherent in the capital structure you design
Trends and changes that may alter the above
Midwest Center for Nonprofit Leadership at UMKC

22. Donated Special-Use Facility
Nature of Assets
Fixity of Asset Type
Level of
Restriction
Low
Medium
High
Unrestricted
Cash
Building
Temporary Restricted
Permanently
Restricted
Endowment
Donated Special-Use Facility
Midwest Center for Nonprofit Leadership at UMKC

23. Funding Dynamics
Reliability: Extent to which revenue source is consistent and predictable year to year.
Range from Low to Medium to High
Autonomy: Degree of restriction and/or enforceable conditions on the use of funds
Midwest Center for Nonprofit Leadership at UMKC

24. Reliability and Autonomy
Level of Autonomy
Level of Reliability
Low
Medium
High
One-year government project grant
Unrestricted Bequest
Restricted endowment
Small regular contributions
Midwest Center for Nonprofit Leadership at UMKC

25. Potential Revenue Types
A Few of the Options…
Ad Hoc Donations
Gifts of Cash
Gifts of Property
Grants: Foundation
Grants: Governmental Department
Grants: Governmental Earmarks
Endowment Income
Dedicated Governmental Revenues: Taxes & Levies
Earned Income: Fees for Service
Earned Income: Contracts for Services
Earned Income: Trade/Sales
Debt: Commercial
Debt: Bonds
Midwest Center for Nonprofit Leadership at UMKC

26. Characteristics
For Each Type of Revenue, Need to Understand the Implications of:
Source(s)
How the Revenue Flows In
Revenue Reliability
Revenue Autonomy
Drivers of Revenue from the Source
Associated Risks
Midwest Center for Nonprofit Leadership at UMKC

27. Funding and Financing Workshop March 2013
5/25/2019
Just Asking…
What do you envision will be the source(s) of financial support for your venture?
Scott
Levitt Social Entrepreneurship Challenge: Midwest Center for Nonprofit Leadership