financial sustainability 2015 npw -...

C Masters Development Services

NPO

FINANCIAL SUSTAINABILITY

in 2015

Cathy Masters B.Com (Hons) CA(SA)

NPO

FINANCIAL SUSTAINABILITY

in 2015

Cathy Masters B.Com (Hons) CA(SA)

Acknowledgments and

copyright

The material contained in this presentation does not necessarily represent the opinion of CMDS or the presenters. The notes do not constitute advice on the topics covered. While reasonable care has been taken to ensure the accuracy of these notes, CMDS expressly disclaims all and any liability to any person, whether or not a participant, relating to anything done or omitted to be done or to the consequences thereof in reliance upon these notes.

© COPYRIGHTCopyright of this material rests with C Masters Development Services CC and the documentation or any part thereof may not be reproduced either electronically, photocopied, scanned, typed, handwritten or in any other means whatsoever without the written permission of C Masters Development Services CC.

We acknowledge MANGO UK and Marcus Coetzee for certain material and ideas used in this presentation.

The material contained in this presentation does not necessarily represent the opinion of CMDS or the presenters. The notes do not constitute advice on the topics covered. While reasonable care has been taken to ensure the accuracy of these notes, CMDS expressly disclaims all and any liability to any person, whether or not a participant, relating to anything done or omitted to be done or to the consequences thereof in reliance upon these notes.

© COPYRIGHTCopyright of this material rests with C Masters Development Services CC and the documentation or any part thereof may not be reproduced either electronically, photocopied, scanned, typed, handwritten or in any other means whatsoever without the written permission of C Masters Development Services CC.

We acknowledge MANGO UK and Marcus Coetzee for certain material and ideas used in this presentation.

What is an NPO?Page 2

Non Profit Organisation - traditionally….

• “Values led” towards social/development / public benefit objectives,

outcomes, and impact.

• Funds and resources may only be used only in pursuit of these

objectives, outcomes and impact.

• Historically (largely) dependent on donor funds to cover the costs.

• Funds/income is often restricted and must be fully spent only in

pursuit of specific objectives, outcomes and impact.

• No profit? No savings?

• No distribution or sharing of funds amongst members.

• Voluntary independent governing body overseas affairs of the

organisation.

Non Profit Organisation - traditionally….

• “Values led” towards social/development / public benefit objectives,

outcomes, and impact.

• Funds and resources may only be used only in pursuit of these

objectives, outcomes and impact.

• Historically (largely) dependent on donor funds to cover the costs.

• Funds/income is often restricted and must be fully spent only in

pursuit of specific objectives, outcomes and impact.

• No profit? No savings?

• No distribution or sharing of funds amongst members.

• Voluntary independent governing body overseas affairs of the

organisation.

Strategic financial

management

The organisation’s governing body carries overall

responsibility for the organisation, including for

financial implications of the

• direction of the organisation;

• ability/capacity to achieve its objectives;

• risks facing the organisation;

• decisions made and actions taken.

The organisation’s governing body carries overall

responsibility for the organisation, including for

financial implications of the

• direction of the organisation;

• ability/capacity to achieve its objectives;

• risks facing the organisation;

• decisions made and actions taken.

Strategic financial

managementPage 4

Two key areas:

• Financing to meet the objectives

• Reducing the impact of threats to the

organisations resources

NOW & in the FUTURE!!!

Two key areas:

• Financing to meet the objectives

• Reducing the impact of threats to the

organisations resources

NOW & in the FUTURE!!!

What is sustainability?Page 5

“Development that meets the needs of the present

without compromising the ability of future

generations to meet their own needs.”

Brundtland Report (1987)

“Development that meets the needs of the present

without compromising the ability of future

generations to meet their own needs.”

Brundtland Report (1987)

SustainabilityPage 5

“Sustainability is the ability of an organisation to

secure and manage sufficient resources to enable

it to fulfil its mission effectively and consistently

over time without excessive dependence on any

single funding source.”

Lisa Cannon - LIFE BEYOND AID

“Sustainability is the ability of an organisation to

secure and manage sufficient resources to enable

it to fulfil its mission effectively and consistently

over time without excessive dependence on any

single funding source.”

Lisa Cannon - LIFE BEYOND AID

Need for financial

sustainabilityPage 6

• To survive in the face of competition for scarce &

restricted resources

• To cope with income and cash flow fluctuations

• To reduce donor dependency & so reduce risk

• To support growth & innovation – responding to change

• To build a wider local base of support – strength &

credibility

• To finance institutional & operational costs - not just

programme/project costs

• To explore new avenues for income generation/funding

• To survive in the face of competition for scarce &

restricted resources

• To cope with income and cash flow fluctuations

• To reduce donor dependency & so reduce risk

• To support growth & innovation – responding to change

• To build a wider local base of support – strength &

credibility

• To finance institutional & operational costs - not just

programme/project costs

• To explore new avenues for income generation/funding

New Environment?

New opportunities?

• Global financial crisis, increasing uncertainty, funding cuts & job losses

• “Earned” self-generated income - shift away from “donor dependence”

• Social enterprise/entrepreneurship – the latest buzz!

• Collaborations/partnerships are key - other NPO’s, government, business,

academia.

• Individual giving – wide support - power in numbers!

• Other opportunities: SME funding, SETA’s, B-BBEE scorecards etc.

• In SA - government & civil society uneasy relationship – Amendments to

NPO Act, SARS alert, National Development Plan, DSD grants, tenders &

contracts – a different way of working!

• Global financial crisis, increasing uncertainty, funding cuts & job losses

• “Earned” self-generated income - shift away from “donor dependence”

• Social enterprise/entrepreneurship – the latest buzz!

• Collaborations/partnerships are key - other NPO’s, government, business,

academia.

• Individual giving – wide support - power in numbers!

• Other opportunities: SME funding, SETA’s, B-BBEE scorecards etc.

• In SA - government & civil society uneasy relationship – Amendments to

NPO Act, SARS alert, National Development Plan, DSD grants, tenders &

contracts – a different way of working!

Donor Dependencypage 12

Dependence on one particular donor

One donor income x 100 = % Dependency

Total donor income

Income continuum

100% donor Now 100% self financingdependent

Donor income x 100 = % Dependency Future

Total income

Organisational

sustainabilityPage 27 - 28

Strategies for financial

sustainability Page 7

3 main strategies for financial sustainability:

1. Diversify income sources

2. Build reserves - save

3. Practice financial discipline!

3 main strategies for financial sustainability:

1. Diversify income sources

2. Build reserves - save

3. Practice financial discipline!

Income sources

90%

International donor

10%Other

sources of

funding

Diversifying income

sources

International donor15%

Core/funding international

donor30%

Foundations & trusts20%

Corporates10% Community

Chest5%

Individuals5%

Government Grants15%

Diversify Income

SourcesPage 7

Strategy #1. Diversify Income Sources

• Identify the range of potential available resources

(financial and non-financial)




Types of incomePage 7 - 8

Unrestricted income

Income that is not earmarked for any specific purpose – it is

flexible and available to either spend on needs, fill gaps,

invest or save.

Restricted income

Income with conditions attached either for spending or for

specific performance – less flexibility, more obligations.

Funds may need to be returned if not spent or performance

not achieved.

Unrestricted income

Income that is not earmarked for any specific purpose – it is

flexible and available to either spend on needs, fill gaps,

invest or save.

Restricted income

Income with conditions attached either for spending or for

specific performance – less flexibility, more obligations.

Funds may need to be returned if not spent or performance

not achieved.

Diversify Income

SourcesPage 7




• Increase unrestricted income

• Expand funding mix

• Reduce “donor” dependence

• Increase self generated and/or “trade” income




• Increase unrestricted income

• Expand funding mix

• Reduce “donor” dependence

• Increase self generated and/or “trade” income

Fundraising plansPage 9

Fundraising plans:

Funding strategy and programme strategy are linked

– Role of the board

– Who leads the charge?

– Emerging opportunities

– Networking

– Investment of time and resources

– Targets

– Time: 12 – 18 months lead times

Fundraising plans:

Funding strategy and programme strategy are linked

– Role of the board

– Who leads the charge?

– Emerging opportunities

– Networking

– Investment of time and resources

– Targets

– Time: 12 – 18 months lead times

CollaborationsPage 10

Collaborations/partnerships/in kind donations:

Clear shared goals and expected outcomes

– Costing and financial implications

– Ethos and processes

– Managing a volunteer/intern programmes

– Sharing infrastructure

– In kind donations of goods/services

Collaborations/partnerships/in kind donations:

Clear shared goals and expected outcomes

– Costing and financial implications

– Ethos and processes

– Managing a volunteer/intern programmes

– Sharing infrastructure

– In kind donations of goods/services

Individual givingPage 11

Individual giving:

– Legitimacy (ownership of the issues/concerns)

– Power of numbers

– Payroll and matched giving

– IT and social media, giving platforms (Pay Pal, Given Gain)etc.

– High net worth individuals/ private SA foundations

– Bequests

– Database – information gathering (POPI!!)

– Relationship building and retention

– Setting an example!

Individual giving:

– Legitimacy (ownership of the issues/concerns)

– Power of numbers

– Payroll and matched giving

– IT and social media, giving platforms (Pay Pal, Given Gain)etc.

– High net worth individuals/ private SA foundations

– Bequests

– Database – information gathering (POPI!!)

– Relationship building and retention

– Setting an example!

Self-generated income Page 12

Self-generated income could be generated/earned:

• passively from investments that yield a return – interest

and dividends or

• actively from “trading” – charging fees, selling items and

outcomes, utilising own resources

This income is often unrestricted!

Self-generated income could be generated/earned:

• passively from investments that yield a return – interest

and dividends or

• actively from “trading” – charging fees, selling items and

outcomes, utilising own resources

This income is often unrestricted!

Self – generated incomePage 13 - 16

Self generated income – more ideas

• Charge fees for services

Existing customers?

New customers?

• Hold fundraising events

• Maximise investment income (interest & dividends)

• Maximise return from existing assets

• Start a business

• Partner with business

Self generated income – more ideas

• Charge fees for services

Existing customers?

New customers?

• Hold fundraising events

• Maximise investment income (interest & dividends)

• Maximise return from existing assets

• Start a business

• Partner with business

Self – generated incomePage 16

“Earned” or self-generated income/ reduced donor

dependence

– Tenders/contracts for services with

“donors”/government/business/other NPO’s

– More time, effort, skills and risks

– Full costing of services and fair pricing - viability

– Productivity critical

– Ensure all income earned is actually received and

accounted for and not all spent – saving!

– Keeping your eye on the ball (not losing sight of

organisational objectives)

“Earned” or self-generated income/ reduced donor

dependence

– Tenders/contracts for services with

“donors”/government/business/other NPO’s

– More time, effort, skills and risks

– Full costing of services and fair pricing - viability

– Productivity critical

– Ensure all income earned is actually received and

accounted for and not all spent – saving!

– Keeping your eye on the ball (not losing sight of

organisational objectives)

SA Business?

SA Corporations

• Donation, sponsorship, or contract of service?

• Marketing or CSI?

• Section 18A receipts or invoices?

BBBEE opportunities

Skills Development, Preferential Procurement, Enterprise

Development (all merging)

– Social Economic Development (SED) - giving

aspect

– Exempted Micro Enterprise (EME) – new rules

SA Corporations

• Donation, sponsorship, or contract of service?

• Marketing or CSI?

• Section 18A receipts or invoices?

BBBEE opportunities

Skills Development, Preferential Procurement, Enterprise

Development (all merging)

– Social Economic Development (SED) - giving

aspect

– Exempted Micro Enterprise (EME) – new rules

Other opportunities?

Other opportunities

SETA’s – training commitments – what can you offer?

Funds for SME’s for enterprise/business (not directly for NPO)

• Department of Trade and Industry (DTI) – various grants and

schemes!!

• Loan or equity funding: repayment and/or ROI

• SISWE/FABCOS, business partners

• RED DOOR FUNDS – Nedbank, Khula, Anglo …

• Small Business Development Fund

• UMSOBOMVU YOUTH FUND – Franchise fund, Micro

Finance, Youth Cooperative,

Other opportunities

SETA’s – training commitments – what can you offer?

Funds for SME’s for enterprise/business (not directly for NPO)

• Department of Trade and Industry (DTI) – various grants and

schemes!!

• Loan or equity funding: repayment and/or ROI

• SISWE/FABCOS, business partners

• RED DOOR FUNDS – Nedbank, Khula, Anglo …

• Small Business Development Fund

• UMSOBOMVU YOUTH FUND – Franchise fund, Micro

Finance, Youth Cooperative,

Build ReservesPage 16

Strategy #2. Build Reserves (Savings)

• Reserves are built by not spending all the income

received.

• Income must be higher than the expenditure - ie the

organisation must retain and save a “profit” or

“surplus”.

• It is only unrestricted income that can be saved to build

reserves.

Strategy #2. Build Reserves (Savings)

• Reserves are built by not spending all the income

received.

• Income must be higher than the expenditure - ie the

organisation must retain and save a “profit” or

“surplus”.

• It is only unrestricted income that can be saved to build

reserves.

Building reservesPage 16

Reserves are built up when income is higher than the

expenditure over time and are depleted as expenditure is

higher than income.

Reserves are built up when income is higher than the

expenditure over time and are depleted as expenditure is

higher than income.

ReservesPage 17

What are reserves?

The balance of unspent resources held which can be used to

fund future expenditure of the organisation or which are

invested for the use of the organisation or for income

generation.

Reserves may be restricted (by others) or designated (by the

organisation) for specific purposes.

What are reserves?

The balance of unspent resources held which can be used to

fund future expenditure of the organisation or which are

invested for the use of the organisation or for income

generation.

Reserves may be restricted (by others) or designated (by the

organisation) for specific purposes.

ReservesPage 17

Accumulated funds?

General reserves (or funds)/”savings” accumulated from

surpluses, arising when income is higher than the expenditure

over the years, which are assumed not to be specifically set

aside for particular or restricted purposes, but are invested or

held for use or to generate income for meeting the objectives

of the organisation.

Accumulated funds?

General reserves (or funds)/”savings” accumulated from

surpluses, arising when income is higher than the expenditure

over the years, which are assumed not to be specifically set

aside for particular or restricted purposes, but are invested or

held for use or to generate income for meeting the objectives

of the organisation.

ReservesPage 18

Why are reserves/savings necessary?

• Protection against temporary shortfalls or delays in income

and cash flow fluctuations

• Financing of unexpected or strategic expenditure

• Investment for the future to generate income to reduce

dependency of donor funding

Why are reserves/savings necessary?

• Protection against temporary shortfalls or delays in income

and cash flow fluctuations

• Financing of unexpected or strategic expenditure

• Investment for the future to generate income to reduce

dependency of donor funding

Building reserves?

Income and Expenditure Statement

IncomeInternational donors 500 000Local corporation 50 000

Total income 550 000

ExpenditurePersonnel costs 150 000Operating costs 100 000Programme costs 300 000

Total expenditure 550 000

Surplus/deficit 0






Surplus/deficit 0

Building reserves

Balance sheet (Statement of Financial Position)

AssetsProperty, Plant & Equipment 20 000Receivables 5 000Bank account 48 000

Total assets 73 000

Reserves & liabilitiesAccumulated funds 70 000

Prior years 70 000Current year 0

Payables 3 000

Total reserves & liabilities 73 000

Decrease expenditure






Surplus/deficit 10 000







Increase income


IncomeInternational donors 500 000Local corporation 50 000Interest & other income 10 000






IncomeInternational donors 500 000Local corporation 50 000Interest & other income 10 000





Building reserves

Balance sheet (Statement of Financial Position)

AssetsProperty, Plant & Equipment 20 000Receivables 5 000Bank account 58 000

Total assets 83 000

Reserves & liabilitiesAccumulated funds & reserves 80 000

Prior years 70 000Current year 10 000

Payables 3 000

Total reserves & liabilities 83 000

Survival RatioPage 17

How long could the organisation continue if income dried up and the level of activity and expenditure remained the same?

Total general funds* x 12 = No. of months

Total annual expenditure

Ideal is 3 – 6 months

*Unrestricted reserves

Building reserves

Community Women’s AssociationIncomeInternational funder 800 000Corporate donor 150 000Government department 600 000Total 1 550 000

ExpenditureSupport 330 000Gender Violence 400 000HIV/AIDS 275 000Women’s Rights 325 000Total 1 330 000Surplus 220 000

Community Women’s AssociationIncomeInternational funder 800 000Corporate donor 150 000Government department 600 000Total 1 550 000

ExpenditureSupport 330 000Gender Violence 400 000HIV/AIDS 275 000Women’s Rights 325 000Total 1 330 000Surplus 220 000

Charges/recovery

Community Women’s Association

Support Gender HIV RightsIncome 185 000 500 000 400 000 465 000 Expenditure (330 000) (400 000) (275 000) (325 000)Surplus/(Deficit) (145 000) 100 000 125 000 140 000

Total Income: 1 550 000Total Expenditure: (1 330 000)Total surplus R 220 000

Restricted surpluses: 100 000 125 000140 000

R365 000

Unrestricted (deficit) (R145 000)

Charges/recovery


Support Gender HIV RightsIncome 185 000 500 000 400 000 465 000 Expenditure (330 000) (400 000) (275 000) (325 000)Charges/recovery 57 000 (16 000) (23 000) (18 000)Surplus/(Deficit) (88 000) 84 000 102 000 122 000

Total Income: 1 550 000Total Expenditure: (1 330 000)Total surplus R 220 000

Restricted surpluses: 84 000102 000122 000

R308 000

Unrestricted deficit (R88 000)

Fees/recovery


Support Gender HIV RightsIncome 185 000 500 000 400 000 465 000Expenditure (273 000)(416 000)(298 000)(343 000)Fees /recovery 120 000 (40 000) (40 000) (40 000)Surplus/Deficit 32 000 44 000 62 000 82 000

Total Income: 1 550 000Total Expenditure: (1 330 000)Total surplus 220 000

Restricted surpluses: 44 000 62 00082 000

R188 000

Unrestricted surplus R32 000!

Charges and fees

Gender ViolenceIncome 500 000 Expenditure 416 000

Personnel costs 200 000Research 50 000Awareness workshop 150 000Charges: Rental 5 000

Telephone usage 3 000Vehicle usage 8 000

Surplus 84 000Fees (shared costs) 40 000Restricted surplus carried forward 44 000

Gender ViolenceIncome 500 000 Expenditure 416 000

Personnel costs 200 000Research 50 000Awareness workshop 150 000Charges: Rental 5 000

Telephone usage 3 000Vehicle usage 8 000

Surplus 84 000Fees (shared costs) 40 000Restricted surplus carried forward 44 000

Building reservesPage 19 – 22

Reserves are built when income is higher than the

expenditure by:

• Set aside unspent unrestricted income

• Minimise expenditure to generate unrestricted income

• “Charging” programmes/projects

• “Setting aside” funds for specific purposes

• Specific appeal - enlisting funder support

The key is NOT SPENDING all of the income or charges in order to

build reserves!

Reserves are built when income is higher than the

expenditure by:

• Set aside unspent unrestricted income

• Minimise expenditure to generate unrestricted income

• “Charging” programmes/projects

• “Setting aside” funds for specific purposes

• Specific appeal - enlisting funder support

The key is NOT SPENDING all of the income or charges in order to

build reserves!

Charges/feesPage 20 -21

Charges/fees to the projects

Requires transparency and communication

• Make charges for the use of resources, ie staff,

space, vehicles, photocopier, phone etc.

• Internal management “fee” (support services as a

separate unit which aims to make a surplus)

Charges/fees to the projects

Requires transparency and communication

• Make charges for the use of resources, ie staff,

space, vehicles, photocopier, phone etc.

• Internal management “fee” (support services as a

separate unit which aims to make a surplus)

Designated FundsPage 21

“Setting aside” funds for specific purposes

• Sustainability fund – held in investments in shares

and/or cash

• Capital fund – held in property, equipment etc.

• Retrenchment fund - held in cash

• Asset replacement fund – held in cash

“Setting aside” funds for specific purposes

• Sustainability fund – held in investments in shares

and/or cash

• Capital fund – held in property, equipment etc.

• Retrenchment fund - held in cash

• Asset replacement fund – held in cash

AppealPage 21

Specifically appeal for sustainability funds

Enlist the support of funders by requesting:

• specific once-off contributions

• funding to support the organisation’s own income

generating activities

• that any under-spending/savings can be kept

Specifically appeal for sustainability funds

Enlist the support of funders by requesting:

• specific once-off contributions

• funding to support the organisation’s own income

generating activities

• that any under-spending/savings can be kept

Reserves PolicyPage 22 - 23

Establish and document a clear reserves policy:

• The type and purpose of each reserve – general and

designated

• A clear plan of how to build each reserve, ie set aside %

of unrestricted income (defined for the organisation)

• The target amount or coverage (sustainability ratio) with

target periods

• The anticipated circumstances, authorisation and

procedures required to spend or reallocate the reserve

once established

Establish and document a clear reserves policy:

• The type and purpose of each reserve – general and

designated

• A clear plan of how to build each reserve, ie set aside %

of unrestricted income (defined for the organisation)

• The target amount or coverage (sustainability ratio) with

target periods

• The anticipated circumstances, authorisation and

procedures required to spend or reallocate the reserve

once established

Financial DisciplinePage 24

Strategy #3. Practice Financial Discipline

• Financial discipline is required to build reserves and

protect reserves.

• It takes discipline to build/save reserves – to set aside

money when there are so many current demands/needs.

• Reserves take a long time to build but can be used up

very quickly without strategic and careful planning,

financial discipline and controls!

Strategy #3. Practice Financial Discipline

• Financial discipline is required to build reserves and

protect reserves.

• It takes discipline to build/save reserves – to set aside

money when there are so many current demands/needs.

• Reserves take a long time to build but can be used up

very quickly without strategic and careful planning,

financial discipline and controls!

Financial disciplinePage 24

Effective Financial Management:

• Financial planning

• Financial recordkeeping

• Financial monitoring

• Financial controls

Effective Financial Management:

• Financial planning

• Financial recordkeeping

• Financial monitoring

• Financial controls

Financial DisciplinePage 25

Financial planning:

• Annual budgets

• Plan based on committed or realistic expectation of income &

committed expenditure

• Plan to save a % of income and/or unrestricted income

• Cash flow forecasts

• Match committed/regular payments to committed or regular

income month by month

• Manage cash flow & maximise interest earned

• Longer term planning

• Consider investing for income-generation or capital growth, the

amount of the general funds that exceeds at least 3 months of

current running costs

Financial planning:

• Annual budgets

• Plan based on committed or realistic expectation of income &

committed expenditure

• Plan to save a % of income and/or unrestricted income

• Cash flow forecasts

• Match committed/regular payments to committed or regular

income month by month

• Manage cash flow & maximise interest earned

• Longer term planning

• Consider investing for income-generation or capital growth, the

amount of the general funds that exceeds at least 3 months of

current running costs


Recordkeeping and monitoring:

• Bank or transfer (unspent) unrestricted income into a

separate interest bearing “savings” bank account (call,

money market, deposit accounts)

• Record, track, and monitor restricted and unrestricted

income, expenditure and balances separately – Analysis

of Funds

Recordkeeping and monitoring:

• Bank or transfer (unspent) unrestricted income into a

separate interest bearing “savings” bank account (call,

money market, deposit accounts)

• Record, track, and monitor restricted and unrestricted

income, expenditure and balances separately – Analysis

of Funds


Financial controls:

• Avoid spending from “savings” account or transferring to the main

operating account for spending

• Build this “savings” account balance to at least 3 months of running

costs

• Implement strict pre-authorisation procedures that ensures reserves

and savings are not spent or are only spent after careful

consideration

• Monitor borrowing from savings and reinstate/repay asap

Financial controls:

• Avoid spending from “savings” account or transferring to the main

operating account for spending

• Build this “savings” account balance to at least 3 months of running

costs

• Implement strict pre-authorisation procedures that ensures reserves

and savings are not spent or are only spent after careful

consideration

• Monitor borrowing from savings and reinstate/repay asap

Financial discipline

When to spend reserves?

General funds – (Savings)

• Temporary delays and small shortfalls – replace and maintain at +/- 3

months running costs

Designated funds

• Only as designated to replace assets, retrenchments or

• Approve reallocation if no longer needed or priorities change

Sustainability/Endowment funds

• Invest for income generation and/or capital growth

• Income earned either reinvested or to general funds

• Strategic spending for future benefit or operations for a limited period

• Unexpected unavoidable emergency demand, scale down or closure

When to spend reserves?

General funds – (Savings)

• Temporary delays and small shortfalls – replace and maintain at +/- 3

months running costs

Designated funds

• Only as designated to replace assets, retrenchments or

• Approve reallocation if no longer needed or priorities change

Sustainability/Endowment funds

• Invest for income generation and/or capital growth

• Income earned either reinvested or to general funds

• Strategic spending for future benefit or operations for a limited period

• Unexpected unavoidable emergency demand, scale down or closure

Sustainability PlanPage 26

• Brainstorm ways of securing resources – particularly

unrestricted income

• Gather all ideas for increasing efficiency and

effectiveness

• Address all the factors that impact on sustainability

• Identify measures of sustainability

• Set and document specific goals and actions for the

future

• Brainstorm ways of securing resources – particularly

unrestricted income

• Gather all ideas for increasing efficiency and

effectiveness

• Address all the factors that impact on sustainability

• Identify measures of sustainability

• Set and document specific goals and actions for the

future

Characteristics:

Sustainable NPO’sPage 6

• Diversified income sources – including a diversified

funding base – funding mix, no. of different sources.

• Increasing percentage of unrestricted income or self

generated income

• Significant unrestricted reserves – survival ratio of more than

3 months increasing

• Strong stakeholder relationships and collaborations

• Strong financial discipline - cash flow management, liquidity

Discussion: Do what extent does your NPO exhibit these

characteristics?

• Diversified income sources – including a diversified

funding base – funding mix, no. of different sources.

• Increasing percentage of unrestricted income or self

generated income

• Significant unrestricted reserves – survival ratio of more than

3 months increasing

• Strong stakeholder relationships and collaborations

• Strong financial discipline - cash flow management, liquidity

Discussion: Do what extent does your NPO exhibit these

characteristics?

Resource flow cycle for

sustainability

Ability to show impact

Resources in

financial sustainability 2015 npw -...

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