Case Study 28.1 — RYCC Builds a Stool

A composite, illustrative case developing RYCC's funding strategy. RYCC and Denise Okafor are composites; the nonprofit funding dynamics are real. Adapt to your organization.

Where RYCC stands

The Riverside Youth Coding Collective — Denise Okafor's free after-school coding program — has won its \$50,000 Hartwell foundation grant and expanded to three sites and 90 students (Chapters 18, 22). It's a real success. But Denise, thinking like a strategic nonprofit leader rather than just a grant winner, asks the harder question: is RYCC financially healthy, or just temporarily funded? This case follows her building a diversified funding stool — the difference between a fragile organization and a durable one.

The fragility of grant dependence

Denise recognizes the danger (Section 28.2): if RYCC depends on the Hartwell grant alone, a single non-renewal — Hartwell's board changing priorities, a bad economic year shrinking its endowment, a competitive cycle going against RYCC — would be existential. A grant-dependent RYCC stands on one leg and falls if that leg weakens. She's seen comparable organizations collapse when a major grant didn't renew. She resolves to build a stool, not a pole.

Building the legs

Denise deliberately develops the other legs of the stool (Section 28.2):

  • Individual donors. She cultivates parents, neighbors, and local supporters who give small gifts. Together these provide unrestricted dollars — flexible money that funds RYCC's core (Section 28.3) and that no funder can revoke. She treats donor development as seriously as grant-writing (Section 28.1's best practice), knowing it's the largest, most stable, most mission-protecting source.
  • Earned revenue. She develops a modest earned-revenue stream — paid coding workshops for the broader community, or a sliding-scale option for families who can pay — that subsidizes the free program and provides reliable, often unrestricted income (Chapter 14).
  • An event. A small annual fundraiser raises money while building community and deepening donor relationships.
  • Multiple grants. She pursues other grants beyond Hartwell, so no single funder is load-bearing — using grants for what they're good for (program scale, credibility, capacity) while relying on donors and earned revenue for the flexible core (Section 28.6).

Investing in capacity — and fighting the overhead myth

Denise faces the small-shop reality (Section 28.4): she's been writing grants at midnight after full days running the program — unsustainable. She makes the case to her board for investing in development capacity (a part-time development contractor, better systems), confronting the board members who insist every dollar should "go to the programs." Using the overhead-myth history (Section 28.3), she argues that an organization too starved to fundraise can't sustain its programs — that investing in the capacity to raise money is investing in the mission. The board, persuaded, agrees to resource development. Denise also engages the board in fundraising (give/get, connections, credibility) — multiplying RYCC's reach.

The result: stability and freedom

With a diversified stool, RYCC is transformed. If Hartwell doesn't renew one year, RYCC is wounded but not killed — the donors, earned revenue, event, and other grants carry weight. And the diversification brings freedom: with unrestricted donor and earned-revenue dollars, RYCC can pursue its actual mission rather than bending to whatever happens to be fundable (Section 28.2's mission-integrity insight). Denise can now pursue grants strategically and ambitiously — declining ill-fitting ones, taking smart risks — precisely because RYCC's survival no longer hangs on each grant. RYCC has become a funded organization, not just a funded project.

What this case teaches

  1. Grant dependence is fragility. A single non-renewal can be existential for a one-legged organization; a stool stands when one leg weakens.
  2. Build all the legs. Individual donors (the largest, most stable, unrestricted source), earned revenue, events, and multiple grants together create stability.
  3. Invest in development capacity. Escaping the starvation cycle — resourcing fundraising — is what makes the mission sustainable; the overhead-myth history is the argument.
  4. Diversification brings freedom. Unrestricted income protects mission integrity and frees the organization to pursue its purpose and pursue grants from security rather than panic.

🔄 Retrieve: Without rereading, name (a) the legs Denise built beyond the Hartwell grant, and (b) the argument she used to persuade the board to invest in development capacity. (Answers above.)