An Economic Stimulus Package for Community-Based Organizations

The Resource Lab is a leap beyond socially responsible investing and philanthropic grantmaking. It provides an important next step in helping to consolidate and expand an organizing sector that is crucial to the creation of a new progressive majority in the United States.

Funding the work of community-based organizations (CBOs) is a challenge in a market-based economy. Progressive organizations whose missions are to address social and economic justice issues through advocacy and organizing often find their access to traditional philanthropic resources limited. Nonprofit organizations’ dependence on foundation and government grants puts them at risk of unexpected (and inevitable) revenue disruptions. Yet it is estimated that 80% of CBO budgets are funded through these sources. CBOs must be as creative in their financial resource development strategies as they are in executing their organizational missions and, in fact, recognize that developing this sort of financial independence is another way to build power.

By testing different fundraising methods and spearheading national initiatives to raise funds by alternative means, New World Foundation hopes to help community groups across America become more sustainable.

Some of the ideas we have been exploring are:

• Profit-sharing arrangements with online retailers, that could help generate new sources of revenue over the internet.
• Collaborations with credit unions, credit card providers, mobile phone operators, and remittances systems as untapped sources of income for the sector.
• Using foundation assets to secure mortgages that can help stabilize overhead costs and in some cases create rental income to further offset organizational budget demands.
• Building partnerships with local anchor institutions, particularly higher education and medical institutions (“eds and meds”), to improve communities and help solve significant urban problems.
• Increasing the visibility of community organizations in local and national media, so it will be easier for them to fundraise from individual donors and foundations.
• Advancing membership and small donor-base development.

NWF completed the first phase of this funding program in 2011, to expand community-based membership for local organizations and increase their small donor-base through an RFP process in partnership with Open Society Foundations and the Stoneman Family Foundation at Mott Philanthropic. The Resource Lab’s second phase of work is currently in development.