The spring, 2009, issue of Stanford Social Innovation Review has a good article on non-profit funding models, titled “Ten Nonprofit Funding Models.” The authors, William Foster, Peter Kim, and Barbara Christiansen, note that while for-profit businesses have well-established short-hand terms to name various business models (e.g., “low-cost provider,” or “the razor and the razor blade”), nonprofits tend to be less explicit about where their money comes from. But the authors believe we should be explicit about where our money comes from, so they define ten different non-profit funding models.

For those of us who work with churches, only one of these funding models applies — we use the “Member Motivator” model:

“There are some nonprofits, such as Saddleback Church, that rely on individual donations and use a funding model we call Member Motivator. These individuals (who are members of the nonprofit) donate money because the issue is integral to their everyday life and is something from which they draw a collective benefit. Nonprofits using the Member Motivator funding model do not create the rationale for group activity, but instead connect with members (and donors) by offering or supporting activities that they already seek. These organizations are often involved in religion, the environment, or arts, culture, and the humanities….”

In other words, churches use pretty much the same funding model as National Public Radio and the National Wild Turkey Foundation.

The authors go on to note that the Member Motivator funding model has the richest mixture of tactical tools available to it of any nonprofit funding model. Tactical tools include: membership, fees, special events, and major gifts. Another advantage of the Member Motivator model is that you are tapping into an inherent and already-existing collective community for fundraising — much easier than writing grants.

Certainly an interesting article, and worth reading if you can get your hands on a copy of the magazine. Update 24 April: In the comments, Eclectic Cleric points out you can access an abridged version of the article at the SSIR Web site. If you can’t get the full version, the abridged version is definitely worth reading.