Financial sustainability for non-profits 1

Financial Sustainability is for everyone and all types of organisations and businesses and people too. I introduced this theme in my previous blog in this series.

Recently I have been researching financial sustainability of organisations and I have found an intriguing variation in approaches to both how NFP/NGOs* view their situations and how they  consider their futures.

From my work with NFPs in many countries it has become obvious to me that new approaches are required to meet this challenge of financial sustainability. The old models are not bringing the results necessary to enable sufficient delivery of services now, let alone meet the increasing demands of the oppression of the people by the various political-economic systems.

Firstly it is clear that there is concern across the non-profit sector around the world for financial sustainability.

There are 2 reasons

  1. decline in traditional donor funding sources, either by the donors themselves or the means of collecting from these donors
  2. there is a greater demand for funding by the non-profit sector because there are more NFPs generally and there are larger needs

There are 3 main approaches being used to address the quest for financial sustainability by NFPs

  1. old models are recycled or ‘reinvented’
  1. fundraising, more or with new systems and methods
  2. selling traditional products, especially from traditional cultures and developing countries, such as handicrafts, handmade clothing
  1. monetising the exisiting services, often into client bases that are already in need of support rather than paying fees
  2. setting up adjunct activities to subsidise or fund the non-profit operations, such as cafes often attempting low prices to attract customers

There is another scenario which is quite popular, especially here in Australia. Mergers of non-profits is often seen as a way forward to financial sustainability. However, if there are not other tactics developed then the “new super-non-profit” may only be deferring or delaying the onset of financial uncertainty.

Some new approaches are really needed, and new creativity applied, to the challenge of financial sustainability for the medium to long term.

In the upcoming articles I will address this with specific examples and ideas

*NFP/NGO abbreviated to non-profits

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