Public Finance Discussion

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Evaluate types of Revenue

Public-private partners, Non-profits, Bond issuance, Grants
Certain non-profit institutions such as schools can raise money with bonds, and the loan amounts are tax-free. Bonds can be recalled at any time, and if one bets the interest rate wrong, a rising rate in the future will make your paper less attractive.

Grants are being cut by state and local governments, but private sources such as the Rockefeller Foundation have no shortage of cash. One issue here is that, quite often, the organization receiving the grant must subscribe to the ideological position of such private foundations as Ford or Heritage. Grants are often specialized. This means that when a society values a certain good, grants targeting that good are easily available. Green sources of energy, for example, have ample cash to grant. Any local government doing research into feasible green energy resources is eligible. This is the case in both private and public sectors. In terms of private sector grants, the best bet is applying in a field that is a high priority for the profit-making sector.

Infrastructural developments, and alternative energy are major areas that are being lavishly funded. Corporations are getting federal grants to perform research on new sources of oil and natural gas. Local governments can cash in on this if they are clearly and materially involved. Teaming up with public and private sources of capital can not only provide funding, but bring in needed new tax revenue to the government.

Public-Private Partnerships (PPP) are a collaborative effort among government, private and non-profit sources of funding. This offers a great amount of flexibility and can cope with government budget cuts. The problem with PPPs is that, since government is involved, any organization will be forced to conform to a myriad of regulations. Local governments receiving federal money must conform to federal, not local, regulations and guidelines. Grants by non-profits are also plentiful, with America's 1.5 million tax exempt organizations being worth about $1.7 trillion as of 2011.

Usually, the most successful public entities have a tendency to concentrate on one source of funding. Once it's reputation for fiscal responsibility is solid with an institution or foundation, getting additional monies does not pose a ...