Propeller: A Force for Social Innovation is a New Orleans-based nonprofit whose mission is to tackle the city’s toughest challenges by supporting the creative solutions of its community members. Guest blogger Julia Stewart talks about community-focused ways to finance your nonprofit or social venture when you’re just starting out.
Here at Propeller we emphasize a double bottom-line—that is, social impact and financial sustainability. Whether you are a for-profit or nonprofit, you must ask yourself: What is my business model? What is the market demand for my product or service and how will I generate revenue?
Selling your services to your community and beyond
Almost all of the nonprofits in Propeller’s Social Venture Accelerator have means of generating revenue. Here are a few examples:
- Smiles2Geaux, a mobile dental clinic, earns revenue through Medicaid reimbursements whereby a percentage of the cost of each dental service (cavities, fillings, etc.) is paid back to the provider.
- VEGGI Farmers Cooperative earns revenue by selling produce to New Orleans’ restaurants.
- Youth Rebuilding New Orleans (YRNO) restores blighted houses and sells them at a profit.
- The New Orleans Master Crafts Guild sells membership in their Guild.
How could you leverage your services to raise money?
Show your progress and ask for people to invest in you
“Fundraise, fundraise, fundraise,” is often the go-to mantra for nonprofits. Yes, donations and grants are important, but how can you engage your community to secure funding?
If you aren’t sure how to raise revenue through your services, but want to work closely with your community to support your idea, consider these small-scale (under $10,000) opportunities.
- Crowdfunding platforms such as Kickstarter, Indiegogo, and Crowdfunder. Propeller alum Tippy Tippens raised almost $6,000 on Kickstarter to launch the BirdProject, for example, giving her supporters everything from mac-n-cheese to a soap and ceramic keepsake. Keep in mind there’s usually a charge of 4%-9% of total funds raised.
- Microfinance platforms like Accion and Kiva. These are perfect if you are considered low-income or don’t have access to typical banking services. Kiva New Orleans, for example, has 226 members who have loaned $27,025 across 930 projects since 2009. Keep in mind interest rates can still average 36% or higher.
Of course, if you’re seeking more money, there’s a whole other world of program-related investments and venture capitalists and angel investors to consider. But if you look to your community first, you might be surprised at the support.
Keep up to date with happenings at Propeller by following them on Twitter and Facebook. Feel free to also reach out to Julia if you have more questions about both small and large financing options: firstname.lastname@example.org.