It's definition—as in the one used in business and in this context— is a "methodical and institutionalized approach to building a reliable revenue base that will support an organization's core programs and services." (https://www.bridgespan.org/insights/funding-models).
It sounds like you understand what a funding model is, but are just objecting to the language, but I'm not sure why when that's what the term is widely understood to mean?