Non-Profit
One interesting funding group I stumbled upon for healthcare innovation in California is the California Healthcare Foundation (CHCF). This foundation was created from the Blue Cross transformation to a for-profit business. The government directed Blue Cross to use their left over funding for its original purpose.
CHCF funds innovation in products, billing, integration of information, policy awareness, and law. Other private foundations include The Commonwealth foundation, for educational and institutional research.
Diverse Revenue Streams in Non-Profit
An interesting note was in Stanford’s Social Innovation Review. Curtis Chang argues that positioning a non-profit service or product as a product for all in-home elderly, instead of only low-income elderly, will allow possibilities from higher money sources, because it will appeal to all financing sectors. In addition to the “true” philanthropist, this type of branding will turn the heads of the more self interested entities.
A Hybrid with For-Profit
Though R&D has historically been either an expensive part of doing for-profit business, or considered a main objective of non-profit, a non-profit and for profit combination can also be an option. Issie Lapowski of Inc. magazine outlines some aspects of a hybrid model, and looks at current socially responsible entrepreneurship business configurations. A non-profit subsidiary can inform the for-profit with R&D in an exclusive contract situation, as long as conflict-of-interest boundaries set forth by the IRS are not violated, and an experienced business lawyer works out contractual and operational details. This type of relationship has been enjoyed by companies like IDEO and Mozilla, as well as many others. These companies created differentiated, and overall beneficial tax shelters, but the combination is not to be taken on lightly. This synergism can be tricky.