Posted on 28 April 2008 by jakilevy
New Models for Not-for-Profits
Adam Huttler (from Fractured Atlas) and Ruby Lerner (from Creative Capital) had a conversation focusing on new financial and business models for not for profits. This fits right into the conversation of social entrepreneurship…
Read the article on Community Arts Network
A teaser – or the nugget of the interview – is located right here:
We need a multiplicity of models. There’s not one right model. The way Creative Capital is structured wouldn’t necessarily work for anyone else. You have to understand what your money formula is. If you’re a theater company that does musical revivals, you’re obviously going to be supported almost entirely by earned revenue. But that formula doesn’t make any sense for The Wooster Group. We need to understand that, and then the next step is to start developing typologies around different money formulas that can bring clarity to the field.
I will say that the nonprofit capitalization model is absolutely screwed up. When I look back on the success that we’ve had and try to understand it, I realize that the fact that we were adequately capitalized from day one was hugely important. We were founded with a venture-capital model. First you raise the money, then you start looking for projects to invest in. You don’t identify your investments and then scramble to raise the money you need to invest in them. In the nonprofit sector we really need a radically new approach to capitalization.
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