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How Does Khan Academy Make Money? Khan Academy Business Model In A Nutshell

Khan Academy is an EdTech non-profit organization whose mission is “to provide a free, world-class education to anyone, anywhere,” It runs thanks to the sponsors of various donors that keep the platform developing content at scale for its millions of students across the world. 

Origin Story

Khan Academy is an American non-profit educational organization founded by Salman Khan in 2006.

Khan Academy mission is “to provide a free, world-class education to anyone, anywhere.” In a 2011 TED Talk Khan explained its mission and how Khan Academy got started. 

Previous to the formation of the organization, Khan was an analyst for an Hedge Fund in Boston and in his spare time also a mathematics tutor for several family members (small cousins) in New Orleans. Due to increased demand for his tutoring service, he began to upload YouTube video tutorials using the drawing application SmoothDraw.

Khan realized that his video tutoring uploaded on YouTube actually were more effective and more interesting to his own cousins, and from there the idea to scale this up, to make it become one of the most popular e-learning platforms on earth. 

A few years later, Khan was able to quit his job and devote more time to creating online educational content. The Khan Academy now offers a range of video content in the form of short lessons and also provides supplementary exercises and materials for educators.

Khan Academy revenue generation

The Khan Academy was funded directly by Salman Khan himself for the first four years of operation.

During the fourth year, the academy attracted its first major donation – a $100,000 grant from philanthropist Ann Doerr. This donation made the Khan Academy appear more legitimate, and Khan was able to combine this with his background in finance to pitch other wealthy philanthropists. 

In the next 12 months, Khan would secure almost $4 million in donations.

As noted in the previous section, Khan Academy is a non-profit organization. It is mostly funded by donations from individuals and organizations.

Some of the more notable donors include:

  • Bill and Melinda Gates Foundation.
  • Google.
  • Bank of America.
  • Comcast.
  • AT&T.
  • Valhalla Charitable Foundation.
  • Hyatt Hotels Corporation.
  • The Walt Disney Company.
  • The Smith Family Foundation.
  • General Motors.
  • Musk Foundation.

In addition to accepting donations from philanthropists, the Khan Academy also accepts charitable donations on its website.

Other ventures

In 2016, Khan Academy partnered with the Bank of America to produce educational videos for aspiring professionals. This partnership aims to help the next generation learn personal budgeting skills and prepare for college. 

The partnership is a mutually beneficial arrangement for both the Bank of America and Khan Academy. The former will get its brand in front of millions of young Americans. The Khan Academy also stands to benefit from the continued support of the Bank of America. Although it cannot accept a commission for sending new business to the banking institution, it can and does accept remuneration in the form of charitable donations.

Content strategy

Khan Academy also uses prolific content creation to drive revenue. It does not collect money from YouTube advertisements, but the videos are nevertheless watched by millions of people daily.

As of the time of writing, the Khan Academy has 6.48 million subscribers on YouTube. While exact figures are unknown, even a 5% donation rate in viewers would likely represent a significant sum of money for the organization.

Key takeaways:

  • Khan Academy is an American non-profit organization with a focus on short, free, classroom-style lessons.
  • Khan Academy relies on strong relationships with philanthropic donors. Some of the more notable include the Bill and Melinda Gates Foundation, Bank of America, General Motors, Google, and the Musk Foundation.
  • Although the Khan Academy cannot generate revenue from YouTube advertisements, it nonetheless enjoys a substantial following on the platform. Through prolific content creation, the organization increases awareness of its mission and receives more donations as a result.

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"