How Braided & Coordinated Funding Helps Everyone

Why You Need Coordinated & Complementary Funding Streams

As organizations struggle to identify stable funding to grow, competition to access funding becomes even more difficult to navigate. Once you get funding, it's sometimes unclear how you can leverage multiple layers of dollars to run your social business or nonprofit organization.

I am excited that more nonprofit organizations are looking at ways to make a profit from goods, services, or products so they can add another revenue stream to their venture. I'm also excited that more businesses are dedicating portions of their profits to support a social cause.

These two facts together make it super-duper important for all of us to understand how to leverage a layered funding approach to do social good. When we leave revenue sources untapped or unexplored, we are leaving money on the table for someone else.

Of course, in the social impact space that's not necessarily a bad thing. However, if we're trying to be successful social entrepreneurs, we need to be smart and get in the game.

More importantly, if we are working on building a legacy through a sustainable social impact venture... figuring out our funding situation is the only way to survive long-term.

Braided Funding Helps You Fully Fund Something You Want to Do

When you are trying to fulfill a social impact mission and provide a service or help a cause, you likely have a budget that tells you how much money you need to be successful. That budget will grow over time as you scale your success.

Leveraging a braided funding approach can help you identify multiple funding sources that can be used together in harmony to ensure you have the entirety of your budget covered. You will need to identify these funding sources and know how much of that revenue is coming in and how much has been used for this specific purpose.?

Braiding your funding will help you keep control of your budget, remain solvent, and set high-enough funding targets each year to be successful and thrive.?

Think about it this way if you are a social business with an impact mission:

• You have multiple goods or products that are driving profit to your organization.
• You can use a portion or all of that profit towards your social impact mission.
• You can also leverage funding like grants or seed money to augment the profit from your social business.

In this example, a social business is looking at the impact mission and required budget to identify multiple funding streams that will all support the programs and services being provided.

If you are a leader of a nonprofit organization, you likely have tried or wondered if you could do this before. Braiding funding basically means bringing together multiple streams of funding that is trackable from start to finish but are being used together to complete your mission.

Braided funding can be used to support your entire social impact mission or just one program or service under your mission. It depends on how you have structured your organization's funding strategy.

More Options! Coordinated Funding Can Help Too!

Using a coordinated funding model leverages dedicated funding streams for specific functions. Each function, program, or service, is coordinated with the others to support the overall organization.?

If you are using coordinated funding to manage your overall organization’s fundraising strategy it might look like this:

• Major and individual donors covering your administrative costs
• Grant A covers one service
• Grant B covers another service?

This way, all of your unrestricted funding from direct donations can be used on things that the grants may not cover like rent, HR costs, or legal fees that are not directly related to grant activities.?

Coordinating your funding offers you options to dedicate money towards a specific purpose and track it separately from other funding streams you are leveraging.

One Layer Deeper... Braiding & Coordinating (ohh la la!)

If you're a nerd like me, you'll naturally ask can I use both braided and coordinated funding as a strategy to get all my work done?

The answer is yes. The real answer is always: you better be ready to track all the dollars and cents in a way that won't make your funders mad.

If you're planning to braid funding to accomplish a particular part of your mission that's ok. You might also be coordinating that braided funding with a bunch of other ways that you are getting money to fulfill your mission. Those other ways might be funding some of your other services or overhead.

This example would look like this:

• Grant A & Grant B are being braided to provide Service 1.
• Grant C is wholly funding Service 2.
• Grant indirect costs, major donors, corporate donors, and an annual fundraiser are being used to support all other services and the organization's management and oversight.

Funding a social impact venture as your organization grows can become very complex. I recommend having an expert business official or CFO who can advise you and your board/partners about how to be successful at leveraging these types of strategies to do your work.

Getting Back to the Sustainability Conversation

When the word sustainability is mentioned, most people immediately think of funding. The tricky part is that scale or use of funding aren’t the first topics of conversation.?

Usually, the discussion about sustainability starts with “we need XX dollars to sustain our work”.?

That isn’t the most practical approach given there are so many other factors that will determine success and sustainability. One significant factor that continually gets looked over is financial oversight and management.

You could jeopardize your organization if you don’t have the appropriate financial structures to oversee funding, yet you seek significant amounts of grant dollars to sustain your efforts.

Hence, my recommendation to make sure you have a professional advising you on how you can make an impact, remain solvent, and sustain your legacy in the future.

In a future newsletter, we'll discuss how you can make sure you are investing in the right strategies so you can leverage your dollars to the max.

Key Questions for Sustainable Funding:

• What was successful and how much does it cost to continue at the current scale??
• What funding streams will we continually have access to?
• What funding streams can we access by leveraging partnerships?
• How can we coordinate or braid multiple funding streams??
• What role does business play in supporting our efforts?

Want More Questions to Help You Sustain Your Work? Get this Freebie!

In a time when funding is so competitive, it's going to take all of us working together to collectively make the impact we want to see. That also means we all need to commit to using the precious resources we have wisely. Learning new and smarter ways to work as a social impact organization will help you ensure your legacy will live on.

And that's your lesson on how smarter ways to fund social impact work are going to help us all thrive.

If you're ready to book a call with me to discuss your sustainability strategy, you can book here:

This newsletter article is an excerpt. You can sign up for my newsletter and read the?full blog post on WendieVeloz.com?You can also subscribe and listen to the podcast episode on?Spotify?and?Apple Podcasts.