The current issue of the Stanford Social Innovation Review includes a great article, "Ten Nonprofit Funding Models." While the article focuses on larger nonprofits, funding models are valuable to organizations of any size.

Choosing the right funding model can help you prioritize your resource development efforts. As we all know, there are always enough things to be done to fill our work days. What's critical to our success is that we do the right things each day. And when it comes to resource development, focusing on the right things is even more important in this tough economic environment.

Take a couple of examples. One model, such as the one used by the Make-A-Wish Foundation, requires an organization to motivate a large number of donors. Actually capturing those donations requires specific activities and skills on a large scale.

Another model relies more upon finding a narrow range of supporters who have the ability, and the desire, to make a big bet on your organization and its mission.

In addition to helping an organization focus its resource development, a funding model can help make your case for funding. When a funder looks are a request from a new organization or an organization that wants to grow, it usually asks two questions. First, the funder wants to know what its support will help you do in the short-term. Are you going to hire more staff to deliver service or build housing? 

But there is also a second question about the long-term impact: What does our support do in the long term? Usually a funder wants to know what you are building toward. Organizations don't grow fully into their funding models overnight. It takes time, and effort. And some funders who will help you start may not be a part of your long-term funding model.  A clear funding model helps you show those donors how their support contributes to your organization's growth.