Financial planning

 

Research is our primary goal. In particular, we want to support fellowships for PhD and/or post-doctoral researchers.

There are two important financial expectations in this research plan: (A) researchers need to know that a committment we make to support them is stable, and (B) donors need to know that their gifts are used optimally and for the intended purpose.

 

Summary of fund management

Before getting into hard numbers, let’s go over our plan for managing funds.

Revenues consist of (1) organic donations via PayPal Giving Fund, Patreon, Ko-Fi, and Benevity; (2) sales via CafePress; (3) commercial co-ventures; and (4) direct donations by the cofounders. Expenses are (1) fellowship payments; (2) compliance costs; (3) marketing e.g. content creation; and (4) general operations.

Again, we are committed to making sure that publicly received donations are used principally for research. In order to accomplish this, the founders are donating their own funds to cover overhead costs (Around $10,000 in FY 2018, look for our report to come soon). Excess founder donations go towards our endowment.

We divide Assets into (1) Funds for mission; (2) Invested endowment; and (3) General funds. Both Funds for mission and the General funds will contain some mix of cash and accounts-receivable. The invested endowment includes diversified securities and/or interest-bearing assets. Near-term expenses in the form of fellowship payments will be paid by funds we have reserved for our mission, to avoid unnecessary endowment liquidation. On the other hand, near-term expenses for overhead will continue to be paid from cash contributed by our founders.

Our organization will prefer to increase the size of its invested endowment each year – over a sufficient time frame, this will grow to support research all by itself! Therefore, cash safely in excess of short-term expenses will be used to grow the endowment.

 

Now for some numbers

There are a few ways that our finances might develop as we grow: (1) We get a few hundred donors who make recurring, small donations via Ko-Fi and/or Patreon, sufficient for around $4,000 per month; (2) We get a large gift or business deal with immediate payout, but non-renewable; or (3) We get donations below the threshold of meeting expenses expected for a fellowship project.

In case (1), we can start a fellowship project almost immediately, because the revenue is fairly stable. We would still need to maintain a small cash reserve to compensate for small changes, but with less focus on the endowment. Publicly obtained revenues of about $48,000 annually would be sufficient for us to act under this plan. To put that another way – just 1,000 people donating $4 per month would do the job! Or, just 100 people donating $40+ per month (And we already have a few of those staunch supporters!)

In case (2), our action will depend on the size of the gift received. However, if a gift is sufficient to cover at least two years of an overall 4-year fellowship, e.g. $100k, we can probably start work immediately. On the other hand, if the gift is worth less than 1 year of a fellowship, we might instead put it into our endowment.

For case (3), we would put funds into our endowment, to further grow our resources through appreciation and interest. Suppose that we’re only able to earn $15,000 per year to start, with revenue growth of 20% per year. This would be slower than we like – but even here, we’ll still be able to act over a longer time frame. Given 13 years of contributions and reinvested interest, we would accumulate an endowment around $1.1 million realistically earning ~$54,000 interest/appreciation per year.

Also notable for case (3) – we won’t be sitting on our hands, waiting for our endowment to grow. We’ll still be an important actor in advancing morphological freedom research, especially through impactful-but-inexpensive programs like sharing knowledge and ideas, building bridges and allinaces between interested parties, advocating for research in academia and medicine, and matching allied private companies to pools of interested talent.

Our organization is in this for the long haul. Regardless of which funding situations arise, we are prepared to use funds wisely for our mission.