5 ways non-profit organizations can achieve financial sustainability

The Kingdom of Saudi Arabia is well aware of the impact of non-profit organizations in achieving social development. Keen to support and empower this sector, the Kingdom has been launching initiatives and resources that help with aspects related to the establishment and sustainability of non-profit organizations. The financial sustainability of non-profit organizations ensures their continuity, as without it they would not be able to carry on their day-to-day operational costs and in turn support their activities.

What is meant by financial sustainability?

It’s a financial status that enables a non-profit organization to continue to achieve its mission in the long-term and to provide quality services to its beneficiaries, while also maintaining a healthy financial reserve regardless of internal and external conditions. 

Financial support for the non-profit sector traditionally comes from government sources, institutions, and entrepreneurs, but despite the generosity of these key players, the complete dependence on them puts non-profit organizations in a critical situation. Achieving financial sustainability allows the organization to have the resources and ability to expand when the opportunity presents itself and to deal with unexpected risks while managing its daily operations. 

The Kingdom’s efforts in developing non-profit organizations:

In 2016, Saudi Arabia launched Vision 2030, which highlighted the development of the non-profit sector within the dimensions of the National Transformation Program (promoting community development and the development of the non-profit sector) and its strategic objectives. This resulted in several developmental and legislative initiatives focused on the non-profit sector, with the aim to create an optimal and enabling environment to ensure that the non-profit sector will be effective, diversified, and sustainable. Other major goals for the sector is to increase its efficiency and ability to face future challenges and enable it to achieve a deeper social impact. As a result, the National Center for the Development of the Non-Profit Sector was established to activate and expand the developmental role of the non-profit sector. The center works to integrate governmental efforts in providing licensing services to non-profit organizations, and to keep track of the financial, administrative, and technical performance of the sector.

How can non-profit organizations reach financial sustainability?

Despite the existence of bodies such as the National Center for the Development of the Non-Profit Sector, achieving financial sustainability is not easy, but there are several methods through which non-profit organizations can reach financial sustainability. These include diversifying sources of income, developing a strategic financial plan, maintaining good relationships with donors, practicing sound financial management, as well as setting up a reserve fund for times of need.

Here we share some ways that can help you achieve financial sustainability for your non-profit organization:

• Tell the world your story: Talk about why your organization started and the stories behind the cause you support. Sharing your experience, passion, and belief in the organization and its mission will motivate those around you to believe in it as well, and also help in attracting individual and institutional supporters.  
• Balance your sources of income: Balance your dependence on grants by creating ways to earn income, such as providing consulting services, researching the areas in which the organization operates, or providing memberships.
• Use social media platforms effectively: These platforms give you direct access to communicate with various stakeholders that you may need to reach. Whether they’re donors, volunteers, beneficiaries, or the general public, make sure to activate the organization's social media accounts and produce engaging content. 
• Connect with institutions in the governmental, private, and non-profit sectors and discuss how your institutions can cooperate in the interests of all parties. One of these entities may have a co-working space you can use or can provide marketing services for your activities, and in return your organization may be able to help the company meet its social responsibility.  
• Take care of your employees: It’s important to remember employees are not volunteers, and no matter how passionate they are about seeing the organization succeed, they do have a limited supply of energy and need ample support. Try to avoid burnout in your team, since hiring and training new employees is costly in all sectors.

Achieving financial sustainability in non-profit organizations is not easy, but it’s not a cause for despair, since there are several steps that you can take in order to achieve long lasting impact. There are many supportive programs such as the Misk Foundation Incubator for Youth Non-Profit Organizations, which aims to launch non-profit youth initiatives and help them grow and expand through extensive training in several areas, including planning for financial sustainability.