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FCDE’s Financial Model – Organizational Sustainability
FCDE uses a unique financial approach that leverages grants and donations with a business model that allows our nonprofit to generate income through engagement and support of the interns and volunteers working with our local partner organizations. FCDE sustains its own continued presence within each community through this coordinated approach. Previous work with this model shows that an established site derives about 65% of its budget from fee-for-service work (fees paid by interns and volunteers), 10% corporate funding, 10% FCDE fundraising efforts and 15% from foundation support.
FCDE’s financial model initially begins with external funding for a new site, usually in the form of grants, corporate or public donations. We look for three years of support from this type of funding while the new program site solidifies its fee-for-service structure (these are funds earned through the internship and volunteer program) and develops its capacity to fundraise (to support grants made to our local partners). The FCDE financial model slowly incorporates and increases intern participation and contributed support so that at the end of the initial three years of external funding, the new program site generates sufficient revenue to cover ongoing costs of continuing our programs and our work within the community. This approach of using an initial short-term investment leading to financially sustainable sites makes this model easily replicable and scalable.
Because we are not overly reliant on grants and donations, FCDE is more focused and effective. A common problem among nonprofits is that they often have to adjust what their organization does to attract funding. A financial model that does not rely on this funding approach allows us to focus on community development methods that we feel work best. Additionally, a fee-for-service model introduces market forces to our organization that don’t exist in most traditional nonprofits. These forces help to ensure that we are efficient, continually striving to improve and are held accountable at many levels for our work.