Does The New ‘IPO’ Help Or Hurt Nonprofit Organizations?

By Shirmel Hayden

Seems as though the letters ‘IPO’ have hit the nonprofit sector. Although, it does not have its roots in the stock market, an IPO in the nonprofit sector stands for ‘Immediate Public Opportunity.’ This new innovative fundraising strategy conceived by Andy Posner, Executive Director of Capital Good Fund has created a model that speaks to upgrading the traditional fundraising and offers a new and exciting way to finance a nonprofit organization without having to worry about the stressors of grant writing and donor-outreach games.

I agree and understand. Being in the nonprofit sector as a grant writer for many years has been a difficult process on a scale that not everyone gets. I believe any innovative strategies that can improve and help build better organizations, communities and people are worth trying.

According to Posner and West, “the goal of the IPO is to raise unrestricted funds by using a unique model. For every $25 donated, the donor receives one social innovation share. Each share entitles shareholders to vote at the annual meeting on a board of directors seat. Shareholders also have exclusive access to the organization’s quarterly financial impact reports, as well as shareholder-only conference calls.” There are definitely benefits to IPO’s such as community ownership, accountability, and innovative investment strategies to help eliminate the harsh realities of competing with over 1.5 million nonprofit organizations that exist in the United States.

Hayden 8.12I wonder what would happen if more nonprofit organizations use the ‘IPO’ model for the sake of making communities better, improving organizational accountability and holding a space for community members to have a stake in what is said to benefit them. What would happen if community members get to vote at Board of Director or Advisory Counsel meetings? What would happen if the community’s voice were responsible for a percentage of the decision making for nonprofit organizations? Would nonprofit organizations be willing to give community’s members a voice and a vote? Would nonprofit organizations be willing to share budgets, program implementation strategies, process and grant applications for the community to see?

My nonprofit experience has been a roller coaster and I would very much love to see new strategies and methods of improvement. I would like to believe that nonprofit organization could use this method as a new fundraising strategy. However, I do not think that most nonprofit organizations are progressive enough to implement such as strategy. In Posner’s approach, he admits that, “there are still challenges.” I do not know if this solution works in economically diverse communities, or even if community members are ready to take more responsibility for social services geared toward improving their communities. However, what I do believe is that there is a space to improve the nonprofit sector. Changing the way we think about grant writing and fundraising is well worth to investment.

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