Financial Sustainability of NGDO platforms

On the 10th September 2007, in Brussels, members of CONCORD including the new member states (NMS) platforms attended the training that aimed to discuss issues such as: why and how to elaborate a financial strategy for a NGDO platform; pros and cons of different membership fee systems; financial reporting, limiting expenditure, diversifying funding etc. The main speakers were Jake Bharier from the CONCORD board, Andreas Vogt from the CONCORD secretariat and John Cammack, consultant, who brought important input on financial management for the NGDO platforms.

One of the most important aspects that was discussed was the existence of the reserves, which is not necessarily specified in all legislations. The financial strategy, as well as the existence of the reserves is not written down for most of the platforms, or in some cases, it may be found split up in different strategic papers. One of the ways to resolve this is to introduce one phrase in your strategic papers such as: “The platform aims to hold its reserves at a level of 35%, or just over 4 months worth, of its expenditure budget. This target should be achieved over the next 3 years, by 31 March 2010. The board will then review this percentage annually, at the time when the budget is being set.” This will insure your financial strategy and will give you time to think it through.

Returning to the reserves issue, it was concluded that they may depend on:

• Level of membership fees
• Portfolio of donors
• Governmental future income
• Formalization of government/NGOs partnership

Moreover, most of the platforms identified a risk to having most of the financing from the government: the diminishing for the platform’s independence. Focusing on the financial independence based on the level of membership fees, it was said that in most cases the membership fee could or should be raised.

Find more information on financial management at: http://www.johncammack.net/

Information provided by Claudia Iatan, Romanian Platform for Development Cooperation FOND
Photos provided by Andris Gobins, Latvian Platform for Development Co-operation LAPAS