Using a Diverse Business Model to Fund Impact

Using a Diverse Business Model to Fund Impact

Neonatal Rescue has two parts to its business model, including a for-profit and a non-profit, that will make the company viable for years.

By: Rob Brown and Sara Hoen

Illustration by Rob Brown. Taken from a slide from a presentation used to explain Neonatal Rescue’s business model.

At Neonatal Rescue, we recognize the need to make a long-lasting impact on the infant mortality rates around the globe. We have created a Social Venture Model that allows us to make a sustainable impact through a mixture of funding. This will make the company viable for many years.

A Social Venture Business model includes two different entities, the nonprofit that allows grants and donations and the for-profit that is fueled by investment. 

We’ve found that using a 501(c)3 nonprofit is a great way to interface with grant makers and donors who are interested in helping the cause of reducing infant mortality.

While Neonatal Rescue LLC, the for-profit side, allows us to work with impact investment groups and individuals, dedicated to our cause, and provide equity-type capital investments. 

All funds from charitable donations go directly to delivering NeoLife ventilators to hospitals and clinics, and training health professionals around the world. General donations are pooled together to complete the program as needed. 

A few tools we have recently been utilizing include; “Donor Advised Funds,” or “DAFs” and “Project Related Investments” or “PRIs.”

Photo by Rebecca Olds. Rob Brown and Cody Going presented Neonatal Rescue’s Business model to the Impact Investors Forum at BYU with Janelle Gardiner, Sara Hoen, Ashley Avery, and Rebecca Olds (photographer) in the crowd. May 20, 2022.

DAFs allow individuals to transfer money to a tax-free account that they can use later to donate or invest. They can “advise” that the funds be used in a more specific area that aligns with their passion. They are directly involved in choosing where their funds are used in Neonatal Rescue’s programs, whether that be directly on the ventilator or in the training aspect, etc.

A second tool we are using is called Program-Related Investments or “PRI”. According to the IRS, a Program-Related Investment has a primary purpose to accomplish one or more of a foundation’s philanthropic goals. Investors can use a PRI to work directly with Neonatal Rescue with a return on investment while also being tax-deductible. It is the best of both worlds. We have found these work well to sponsor specific country programs. 

We believe that our Social Venture Model allows us to make a sustainable impact.  Having a mixed funding structure will help us for many years to come.