Finance is crucial—not only to funding programs, but also as a direct means of giving people autonomy. By leveraging the power of creative financing and positive financial incentives, communities and individuals can solve challenges they face in the ways they see fit.
The stories in this collection examine solutions that use creative financing to drive social change. We see examples of organizations that have had to get creative with revenue streams. Read the Next City article by Oscar Perry Abello to learn about the work of the Illinois Facilities Fund (IFF), a Community Development Financial Institution working to help nonprofits and small businesses access resources through the Paycheck Protection Program.
In many cases, money is best spent by those who are facing the challenges. Whether it is accomplished through direct cash transfers via foreign aid or by government-supplied stipends, we can see that providing individuals and communities with financial autonomy increases the greater good. Issie Lapowsky writes about the positive effects of a basic income payment made to members of the Cherokee tribe in North Carolina.
Explore further to learn how a different form of payment, by the Nepalese government to mothers, is trying to normalize multiple female births among families living in poverty.
Click here to explore other stories about Using Creative Financing in the Story Tracker!
- Do some research to define the following terms using your own words: nonprofit; b-corp; and social enterprise. Explain the significance of these concepts, especially as they relate to the question of financial sustainability for an organization interested in social good.
- What is crowdfunding? How can organizations leverage crowdfunding in the absence of traditional revenue streams to accomplish a goal?
- Can positive financial incentives encourage behavior change? Explain how using evidence. In the article about payments to Nepalese mothers, only 40 women had received financial support from the program—how can we assess the efficacy of this, or similar programs? Using the Solutions Story Tracker, find 2-4 additional stories about solutions that effectively leverage cash payments as positive financial incentives to enact positive change.
- After reading the story by Issie Lapowsky about basic income payments to members of the Cherokee tribe in North Carolina, find more cases of basic income projects in the Solutions Story Tracker. Choose 2-3 other cases to compare and contrast: what results and evidence do we see? Create a collection to share your results with your group or class.
- Find one or more stories using the Solutions Story Tracker about a nonprofit trying to solve a social or environmental problem important to you, reliant predominately on fundraising to support its work. Share your story. Then, consider how you might start and fund your own nonprofit organization focused on an issue of choice.
- Journalism is a collaborative practice: reporters are writing for their community, but they also depend on community members as sources for information. Indeed, the very purpose of journalism, according to the American Press Institute, is to provide citizens with the information they need to make the best possible decisions about their lives, their communities, their societies, and their governments. With that in mind, SJN wants to help connect news readers and journalists. Beside the name of the journalist on any of our story pages or the results page of the Solutions Story Tracker, you’ll find a Twitter icon that will link you directly to the journalists profile. Tweet at them with questions or compliments about their piece - you might be surprised by how much writers want to engage with their audiences! Don’t forget to tag us too (@soljourno) and use the hashtag #journalistintheclassroom if you are reading as part of an academic assignment.
- There are different models of organizations that work for social benefit. Many are nonprofit organizations, classified as 501(c)(3) and 501(c)(4) for tax purposes, that cannot distribute their earning as profits purely for financial gain. 501(c)(4) organizations are commonly social welfare organizations. Others are Benefit Corporations or b-corps that pursue both profit and a social or environmental purpose. Some b corps are legally incorporated as benefit corporations (now possible in more than 35 states) and others are "Certified B-Corps" which means they adhere to standards established by B Corp, a nonprofit organization that provides third-party verification and certification. Any organization that combines a financial, market-oriented approach with a mission of social good is referred to as a social enterprise. Ask your students what they think of the concept of “business with social goals.”
- Crowdfunding refers to grassroots fundraising—turning to the general public via apps, websites, or other campaigns to raise money for a variety of solutions (explore an entire collection about crowdfunding here). Appealing directly to the public reduces red tape and the need to rely on grants or federally subsidized money. Compare and contrast these approaches with your students, using the stories in this collection as examples. Oscar Perry Abello’s article provides an example of an organization helping other organizations access more “traditionally” but hard to get funding streams. We also saw the importance of securing multiple sources of funding in the collection on Expanding Access, when we examined how the LA Unified School District funded its meal program. Ask students to consider how the article in the Detroit Free Press about crowdfunding bail connects creative financing to social and racial justice efforts in the US.
- Using financial incentives involves rewarding results/paying for success as a way to encourage positive change. This behavior change strategy is discussed in other solutions journalism stories, including this story on using payments to encourage better health outcomes. Use this or another example from the Solutions Story Tracker to examine the efficacy of cash as an incentive for positive change. Similarly, Marc Gunther introduces us to GiveDirectly and their approach of direct cash payments to poor people as foreign aid. In July 2020, the US Agency for International Development delivered $9.9 million to the Government of Uganda through GiveDirectly.
- Answers will vary. In recent years, experiments in basic income have been put into place in other US states like California, and as well as in Finland.
- Answers will vary. For more on creating collections, click here. For more on Success Factors, click here. Once your students create and share their stories about a nonprofit of their choice, ask them to consider what might be more creative ways of financing these nonprofits? Follow this link to an activity built around this premise in the Making a Difference course module.