Sustainability, a long-term perspective in which organisations or programmes aim for independent operations, has become a buzzword in the NGO sector. The concept of sustainability has long preoccupied donors and development practitioners, but there is a lack of clarity in its meaning. Sustainability is the ability of organisations to continue their institutions and programmes beyond the termination of external assistance and remain reactive to changes. Sustainability has two key dimensions: institutional and financial. Institutional sustainability is the capacity of viable and stable organisations to continue programme interventions on their own, whereas financial sustainability refers to the capacity of generating required revenues locally or ensuring that the external source of fund is available to continue the programmes.
Financial sustainability is the state of having financial continuity and security where the organisations or programmes do not collapse if the external funding is withdrawn. Many international development agencies desire that their community-based programmes should evolve into self-reliant local entities that are able to continue the programme activities. With increasing international donor fatigue but the potential availability of resources locally, many development professionals are talking about local institutions becoming independent and financially sustainable. However community-based health care institutions remain weak because they lack reliable and long-term funding mechanisms. They become vulnerable to outside influence and project-based funding that inhibits the ability of the local institutions to respond to their beneficiaries. It needs a long-term strategic vision for them to become financially self-sufficient. From the financial sustainability point of view, it is good to have diversity of funding or income sources to avoid dependency on a single donor or income source.
Here are some tips for the secrets of financial sustainability given by the organisation called Mango (see link below), which include:
- A diversified funding base
- Availability of unrestricted funds
- Availability of financial reserves
- Strong stakeholder relationships
- Assessing and managing risks
It is a huge challenge for community-based health programmes to become financially viable on their own without external support, especially in the context of the resource-poor countries. Many community-based health care programmes do not have a strategy for cost recovery through local income as they are heavily dependent on the external grants. Community-based health programmes should therefore develop fundraising mechanisms that include both internal and external sources of funding. Most community-based health programmes are struggling to develop a sound funding base due to a lack of a fundraising strategy.
David Moore, the Programme Director of International Centre for Not-for-Profit Law has written an article on Laws and other Mechanisms for Promoting NGO Financial Sustainability in the NGO sector (see link below). He claimed that NGOs are predominantly dependent on international donor funding. However these NGOs are challenged by the tendency of withdrawal or reduction of levels of support by the international donors, thereby increasing the urgency of long-term sustainability. He has outlined the mechanisms that promote the financial sustainability of the NGOs. Some of them include:
- Government or public sector support
- Private charity
- Self-generated income
- Community contribution
- Volunteerism
References and Links:
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