(New York Times) One way that nonprofits handle a difficult economy is by embarking on a “hybrid model” for funding, in which a for-profit company works with a nonprofit to propel further funding and, ideally, more effective philanthropy. Allen Bromberger, a lawyer specializing in nonprofit financing, said of the hybrid model: “It is virtually impossible to grow a social enterprise in any significant way relying wholly on donated money, earned revenue and debt financing, which are the only sources of financing available to nonprofits. These hybrid structures allow social enterprises to tap conventional investors interested in making profits while continuing to pursue their social missions.” But the hybrid model has its downsides. Conflicting missions from the two companies certainly create problems, and commercial units can be bought out by larger companies, leaving the nonprofit to wobble solo. In some cases, though, it works well. Freelancers Union, a nonprofit insurance company, is owned by the for-profit Freelancers Insurance Company, and both are connected to Working Today. Board members from both non-profit and for-profit sides meet and discuss the most efficient and necessary way to distribute money. Chief executive Sara Horowitz calls the arrangement “complicated but necessary,” citing that “the structure ensures that there is no way that Freelancer’s Union could be sold for the benefit of any individuals or that the nonprofit could be abused for the benefit of the company.” Though its a risky endeavor, hybrid modeling is an interesting option in a troubled economy.
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