Alternative financing: Models of sustainable development for non-profit organisations


Alternative financing: Models of sustainable development for non-profit organisations

31 January 2020

This collection of case studies is an attempt by experts of the Eurasian Harm Reduction Association (EHRA) to introduce and systematise various models of alternative financing that have been implemented successfully in the current environment.

In recent years, many non-profit organisations (NPO’s) in the countries of Central and Eastern Europe and Central Asia (CEECA) have witnessed significant changes in the structure of their revenues; the volume of grant financing provided by charitable foundations has been gradually decreasing. Such a development has forced NPO’s to search for alternative sources of funding for their programmes and projects. At present, NPO’s are moving towards significantly more complex financing models, such as crowdfunding, involvement of businesses in charitable projects, and the establishment of social enterprises, amongst others. These activities are reaching a new level and becoming more mature and professional; they are now taking into consideration the interests and particularities of all stakeholders involved in the process.

This publication offers a description of various alternative financing mechanisms which NPO’s can use in their search for available financial resources, specifically the forms that such mechanisms could take; how the work should be built from the very beginning; what the motives of participating partners in such initiatives could be; and identification of the secrets of success and the possible risks, amongst other issues. This collection is prefaced with an analytical article offering a typology of alternative financing models for NPO’s. Furthermore, specific case studies are provided as illustrations of such models; the examples provided include both large and small scale projects.

Different outcomes are presented through the examples given of NPO’s utilising alternative financing mechanisms. Certain organisations are successful in their implementation of one or other of the listed approaches, whilst others may have not had such an experience but still continue to be active in this sphere while learning from their mistakes; others may just be starting their journeys and are only considering additional opportunities.

This collection is intended to provide help for both experienced and beginner NPO’s and could be of use to the leaders of such organisations, fundraisers and other specialists working with NPO’s. It may also be of interest to specialists of state bodies, business structures and also to everyone who is interested in building long term relations with NPO’s and who are willing to enhance their competencies in the fields of strategic partnership and fundraising.

A number of semi-structured online interviews with representatives of NPO’s working with vulnerable groups and implementing various alternative financing practices were conducted to collect the data introduced in this publication. Most respondents were leaders of such organisations.

In total, 20 NPO representatives from 15 countries of Western, Eastern and Southern Europe took part in the survey, including Ukraine, Georgia, the Russian Federation, Moldova, Poland, Romania, Bulgaria, Slovenia, Serbia, Armenia, Croatia, the Netherlands, Switzerland, England, and Scotland.

It is hoped that many public organisations will be able to use the experiences presented here to obtain alternative financing for the implementation of their own projects.