There is a glaring knowledge gap in our sector: we have limited understanding of which funding models truly succeed in helping us scale effectively.
So we dove deep into the facts to find answers to two very important questions:
1. Who is funding non-profits to scale their solutions?
2. What can we do to secure this funding?
After investigating how 28 non-profits, operating in over 70 countries, and across 10 issue areas used different funding strategies to achieve scale, we found that philanthropy remains a lifeline for most non-profits. Read more here.
Philanthropic funding makes up 68% of the funding of the 28 non-profits that we spoke to.
However, philanthropic funds are notoriously difficult to secure—many times coming with restrictions—and other partners who could contribute, like governments, often require ongoing support that they are unable to pay for.
But there are solutions!
With the first question answered–if we know where funding comes from and are aware of the restrictions of those funding sources, how can we access this funding and use it strategically to support our scaling?
Here are the hard-won lessons, grounded in the real-world successes of the 28 organisations.
1. Pursue cost-effectiveness relentlessly
Learn what price point payers are willing to pay. Demonstrate that your solution can be delivered affordably within that price point, which often requires achieving a low cost per outcome.
2. Build evidence of impact
Convince payers that your solution offers the best return on investment for their contribution. Build evidence to show that your solution is more effective than others, often through randomised control trials (RCTs).
3. Influence other doers to absorb costs directly
Design your solutions to be embedded within and delivered by other doers – including existing government systems. Influence the wider ecosystem to incentivise others to adopt your solution.
4. Test, learn, and adapt
There is no silver bullet funding model; all funding sources can be volatile and involve trade-offs. Take an agile approach, constantly testing, learning, and adapting.
5. Diversify across different funding sources
Most non-profits have learnt the hard way that any single payer type can be unreliable. Over-reliance on any one funding stream is risky, so diversification is key.
