Week 7: Where does the money come from & go?
Oct 5 & 7 · M4. Government–nonprofit relations, funding models, and prep for the 990 Lab.
This week’s big question
Who pays for a service, what decisions does that give them, and why would they keep paying? Monday separates public funding from service delivery. Wednesday uses funding models and a real 990 to test an explanation of where the money comes from. Module 4 · builds LO3 (three sectors), LO5 (revenue literacy) · thread: data/evidence.
Readings
| Reading | Focus & purpose |
|---|---|
| Core (Mon) · Nicole Marwell & Maoz Brown, “Toward a Governance Framework for Government–Nonprofit Relations”, ch. 9 of The Nonprofit Sector: A Research Handbook (Stanford, 2020). Read pp. 231–243 (the framework); skim the rest. 13 pp. | Who pays, who decides, and who answers to whom. Read pp. 233–234 closely for governance and its four concerns: fairness, effectiveness, accountability, and legitimacy. Use them to explain a choice in Monday’s meal case; pp. 242–243 bring the decisions down to frontline staff. |
| Core (Wed) · Foster, Kim & Christiansen, “Ten Nonprofit Funding Models”, SSIR (2009). 7 pp. | A funding model connects a source, a decision maker, and a motivation (pp. 34–35). Use the table on p. 37 as a reference and the questions under each model to identify what you still need to know for the Rail B funding lab. |
| Current (Mon) · Urban Institute, “How Government Funding Disruptions Affected Nonprofits in Early 2025” (read the summary on the landing page) The Conversation, “1 in 3 US Nonprofits That Serve Communities Lost Government Funding in Early 2025”. 4 pp. total. | What the 2025 funding disruptions did to real organizations, and how widely they landed. |
Session 1 · Mon Oct 5: Who should provide the service?
A school needs meals for its afterschool program. Public reimbursement is available, but who should serve the meals: district staff, a business contracted by the district, or a nonprofit sponsor? The school and arrangements are hypothetical; the USDA afterschool meals program is real. We keep the need and funding source fixed while comparing who can make decisions and whom they answer to.
Discuss with your team and write your own answers on sheet 1:
- Who pays and provides? Choose an arrangement and trace the money to the people serving the meal.
- Who decides? Separate a program requirement from a choice you propose leaving to the provider.
- Who answers? Give families a route to someone who can respond, and propose one safeguard for their voice.
Compare with a nearby team. Justify a choice using fairness, effectiveness, accountability, or legitimacy. We hear your answers before showing our worked nonprofit arrangement, with its proposed safeguards labeled as ours. The same case lets us examine a frontline decision, compare a route for family concerns from where you grew up, and ask what happens when reimbursement is delayed.
On sheet 2, put the same three questions to your startup, then name what changes first if its main funding stops. Mark unverified funder conditions as assumptions. A neighbour checks the distinction between funder and provider, conditions and choices, and whether the people you serve can reach someone with authority to respond. Bring your team’s B1 concept brief. Both sheets are Monday’s in-class work. Keep them as worksheets for developing your report and startup plan.
Session 2 · Wed Oct 7: Who will pay, and what evidence would test that?
We begin with the American Red Cross’s “What happens to donated blood?” (2019, 3:20). The video follows blood from donor to patient. Its hospital billing guide and Form 990 supply evidence about payment. Use Foster, Kim, and Christiansen’s three questions: who supplies support, who decides, and why?
Discuss for eight minutes and record the case answers on sheet 1, one per team:
- Follow the blood: who gives it, who processes it, and who receives it?
- Follow the money: who pays the Red Cross, who decides to buy, and why? Use the ten-model card to name a candidate model, cite evidence, and identify what remains unknown.
We compare your answers with our reading of the blood service, then turn to Ruby Yang’s The Blood of Yingzhou District (2006). The documentary follows children in Anhui, China, who lost parents to AIDS. Its distributor’s account describes families selling blood for income and becoming infected through unsafe collection practices.
Use the brief case summary for a six-minute discussion:
- Payment and incentives: Red Cross donors give blood; here, families sold it. How could paying the supplier change people’s reasons for participating?
- Responsibility: Who should pay for safe collection and care after harm? Propose a role for government, a nonprofit, or a business, and one safeguard for the people supplying blood.
- Funding care: Suppose your nonprofit serves children who cannot pay. Name a funding source, who decides, why they would support it, and a candidate model. What evidence would test your proposal?
On the back of sheet 1, label your notes “Yingzhou” and record your funding proposal and safeguard. Treat the proposal as hypothetical. A funding model explains a payment relationship; it does not establish that the service is safe or accountable. The filmmaker’s page has more about the film.
We then compare with Canadian Blood Services, whose main funding comes from provincial and territorial governments. The comparison asks how the same service can have a different payer.
Before the sort, we read the relevant Form 990 revenue lines together. On sheet 2, you each use six Bloomington organizations’ revenue mixes to name candidate funding models and the lines you would inspect next. Where two models remain possible, name both. A neighbour checks your reasoning. A revenue line can narrow the candidates; the payer’s identity and motivation may need another source.
We then open Hoosier Hills Food Bank’s filing to test one question: what is inside its contributions and grants? Record its actual PDF page numbers and one figure with its line. We also locate expenses and compensation for lab week. Return to sheet 1’s startup section for ten minutes: name your proposed payer, decision maker, motivation, closest model, an unanswered question from the article, and what would change if support stopped. On the back, identify a comparable organization or source to check.
Keep Wednesday’s worksheets for lab week and your later submissions. Sheet 1 starts your team’s funding explanation for B2; sheet 2 holds candidate comparison organizations and the filing locations for lab week. Keep sheet 3, the ten-model card, as a reference for B2 and your final plan. Share a copy of the team worksheet with every teammate. Bring your startup concept.
What’s due / prep
- Nothing new is due this week. If you submitted evidence of a confirmed visit to A2 by Sun Oct 4, complete the visit and upload the rest of A2 afterward, with no late penalty and no late pass (A2 booking exception). The visit has to happen before A4 is due on Sun Nov 15. This week’s sessions set up the money concepts that lab week and the final report build on.
Looking ahead
- Lab week is next week: our signature set-piece. Monday’s session builds the A3 990 comparison (15 pts, due Sun Oct 18): your own org’s filing (it is public, so pull it now even if your visit is still ahead), read against a comparison org’s from a different subsector. Bring yours with the PDF open, plus a candidate or two for the second org, and skim the 990 Lab how-to first. Wednesday’s studio starts the B2 Funding lab (10 pts, due Sun Oct 25).