Money from Foundations Without Seeking Grants

When it comes to foundations, every nonprofit leader immediately thinks, “Let’s get a grant.” Modify this thought. What if you also thought of foundations as a venture capital resource to drive earned revenue opportunities?

Here’s an example. I discovered this story while hunting for creative revenue breakthroughs for 7 Nonprofit Income Streams. It’s another example of how nonprofits find ways to solve tricky revenue challenges. *

The Colorado Coalition for the Homeless in Denver creates “lasting solutions to homelessness.” Besides addressing emergency needs, it solves the underlying issues that clients and communities face. One issue their customers face is gaining access to health care. Before the Affordable Care Act, only 15 percent of its customers qualified for Medicaid. Under it, 75 percent qualify.

To offer more services and grow revenue, the coalition needed to increase staff ability to help customers qualify for health care. To train staff, the coalition turned to the Kresge Foundation for a loan—not a grant. Demonstrating confidence in their venture, they negotiated an interest rate that depends on their outcomes. The more people they qualify, the lower the rate.

How might you use this information? Speak to your local foundation’s staff about grants and loans. In terms of assets, Kresge stands among the top twenty United States foundations. While the foundation or foundations you know may not provide loans now, Kresge’s leadership may inspire them. Like the Coalition, you might find a new way to solve a tricky revenue challenge to grow your revenue and your services.

*For another example of an unusual foundation-nonprofit relationships that provides a nonprofit earned income, read page 106 of 7 Nonprofit Income Steams.