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Organizational sustainability

An organization is financially sustainable when it is able at all times:

  • To pay its bills,
  • To secure the income that is needed to work towards its organizational goals from reliable and diverse sources,
  • To keep income and expenses in balance.

 

Factors determing financial sustainability

The NGO literature points out in this context the importance of

  • Conducting regularly strategic, risk and financial planning
  • Adequate financial systems
  • Income diversification
  • High-quality programs
  • Good stakeholder relationships
  • Unrestricted funding
  • Financial reserves
  • Managing overhead costs
     

 

Guide to further reading (available online)

C.McNamara, How financial sustainability is so misunderstood, at, http://managementhelp.org/blogs/nonprofit-capacity-building/2010/05/27/how-financial-sustainability-is-so-misunderstood/

Mango, Financial Sustainability, at: http://www.mango.org.uk/Guide/FinancialSustainability

Mango, The secrets of financial sustainability, at: http://www.mango.org.uk/Guide/TT4FinSust

USAID, Four Pillars of Financial Sustainability, at: http://pdf.usaid.gov/pdf_docs/PNADF342.pdf

CIVICUS, Developing a Financial Strategy, at: http://www.civicus.org/new/media/Developing%20a%20Financing%20Strategy.pdf