Public funding for international development cooperation projects has been significantly reduced worldwide in recent years, pushing many NGOs to reconsider their financial sustainability. Caritas Finland has taken on this timely challenge in collaboration with a group of students from Hanken School of Economics, Agnieszka Petelska, Eva Facila, Lukas Wahlgren and Nikita Vovk, resulting in a report that examines alternative funding sources as well as the opportunities and risks associated with them.
The report is based on a qualitative case study in which seven Finnish NGOs were interviewed. The interviews highlighted themes that reflect the organization’s experiences with different funding models. A key finding was that NGOs often collaborate with one another, for example through joint funding, which strengthens the sector’s overall ability to cope with financial challenges.
One particularly interesting result concerned interpersonal fundraising. Although previous literature has not considered it an efficient solution, in the Finnish context, this method proved surprisingly effective. In contrast, income from social enterprises private companies or commercial activities, selling products and services was not found to be particularly fruitful by the organizations interviewed.
Business cooperation diversifies financing
The report’s recommendations emphasize the importance of diversifying funding sources. One of the central suggestions is to increase cooperation with businesses. While such partnerships can involve risks, such as value conflicts, they are seen as potentially strengthening an organization’s financial resilience. Ethically sustainable collaboration can bring benefits to both parties without compromising the NGO’s identity.
Another important finding concerns dependence on a single donor. For many organizations, support from Finland’s Ministry for Foreign Affairs is a crucial source of income, but according to the report, this dependence increases vulnerability. To reduce the risk, the report recommends expanding fundraising campaigns and building sponsorship networks also in partner countries.
The report was developed in close cooperation with university students, providing valuable fresh perspectives for NGOs’ strategic planning. At the same time, it demonstrates how student collaboration can bring concrete benefits to NGOs seeking solutions in a rapidly changing environment.
The message of the report is clear: NGOs need to develop new funding models, while remaining cautious that risks or administrative complexity do not drain too many resources from core activities. Diversification, carefully considered partnerships, and the courage to try new approaches can strengthen NGOs’ ability to continue their work in advancing global solidarity.
Read the report
Alternative funding sources for NGOs_final report_oikea (1)
