A funding case for foundations
Fund the foundation, not one program.
Most philanthropy funds a single program: one organization, one group of people, one year. FARO funds what sits underneath all of them. Unlike a program grant, the good it does grows the more aid flows through it.
The problem
Every year nonprofits move billions of dollars of financial aid to people in crisis. The last mile runs on infrastructure built to profit from it. Percentage-priced disbursement vendors commonly take two to six percent of the aid distributed, alongside fees that are rarely shown in full, and money that can seldom be tied back to the good it was meant to do.
Funders pay for this invisibly, layered on top of every grant they make.
Why FARO is different
Every model that moves aid answers to someone. A for-profit platform answers to investors, so a share of what passes through has to become return. FARO answers to no investors.
The founders came out of this industry and set out to build its opposite: a nonprofit that charges what the cards cost and nothing else, delivering aid for about ten dollars a person, once. More of every dollar reaches the person it was meant for, with dignity and with a record that can be audited.
What that looks like in practice
On a $225,000 program reaching 50 people, a three percent vendor takes $6,750. We charge $500.
The leverage
FARO's cost is flat while a percentage fee is not, so the gap widens with every dollar moved. Roughly $300,000 a year runs FARO. That cost is fixed. The impact is not.
| Aid moved through FARO | People reached | Nonprofits | Kept with families | Return on the $300k |
|---|---|---|---|---|
| $20M | ~6,700 | ~50 | ~$0.93M | ~3× |
| $50M | ~16,700 | ~125 | ~$2.3M | ~8× |
| $100M | ~33,000 | ~250 | ~$4.7M | ~16× |
Assumptions: a five percent all-in vendor benchmark, toward the upper end of the two-to-six percent band above; about $3,000 of aid per person per year; about $400,000 as an average program size; and about $10 per person as FARO's delivery cost. These are projections for illustration, to be trued up against FARO's operating plan. The program figures in the section above are records, not projections.
The ask
Underwrite FARO's operations: $300,000 for the year.At $50M of aid moved, that keeps around $2.3M with families rather than vendors, across roughly 125 nonprofits reaching about 16,700 people, and it returns more every year we grow.
Fund FARO, and the organizations it serves pay only what the cards cost.
What we will report back
Aid moved, people reached, organizations served, and what each program cost to deliver, every quarter, with the batch references behind each figure. If a number cannot be traced to a record, we will not publish it.
Our organization facts, status and logos are on the press page. Our published guidance for nonprofits running these programs is in the resource library, free and open.
Richard Johnston Executive Director and Co-Founder, Financial Aid & Resilience Organization Inc.