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SLOVAKIA
Profits for Non-Profits: Developing Financial Stability in NGOs

Over the past decade, NGOs have been a significant force in the democratization and revitalization of Central and Eastern Europe, spearheading grassroots community development initiatives, educating the public about their rights under new leadership, and serving as a constructive outlet for citizen activism.

However, countless NGOs do not survive due to a lack of financial support. The international funding community awards grants for specific projects, but donors are unlikely to cover the core operational and administrative costs of an organization. And because NGOs are often prevented by law from organizing their own profitable ventures, many do not have sufficient resources to continue beyond the term of a particular project grant.
The Non-Profit Enterprise and Self-Sustainability Team (NESsT), an NGO based in Santiago, Chile, set out to address this issue by exploring models for the financial sustainability of NGOs in Central and Eastern Europe. NESsT enlisted Partners-Slovakia to conduct an extensive research project on the financial independence of NGOs in Slovakia and to recommend solutions to the challenge of long-term sustainability.

Partners-Slovakia prepared five case studies showcasing different NGO financial models. In Slovakia, NGOs cited competition for scarce resources as a primary reason that worthy organizations failed. They also noted the withdrawal of many international donors from the region and the lack of clear laws safeguarding the tax-exempt status of NGOs as reasons for their financial woes. In response, Partners-Slovakia, along with other NESsT researchers, came up with several ways for NGOs to generate income to reinvest into mission-related activities. Among these are charging fees for consultative services, producing and selling products such as newsletters and books, and developing a membership base which would pay dues in exchange for discounted services or products. The case studies are outlined in a book compiled by NESsT, Profits for Nonprofits: an Assessment of the Challenges in NGO Self-Financing, which has been disseminated worldwide.

To follow up, Partners-Slovakia designed an initiative called "Effective Functioning and Organizational Development of the Third Sector." This formed the basis of the next phase of the NESsT project, in which Partners-Slovakia designed and implemented intensive trainings and consultations for NGOs on diversifying their financial resources. The Center has trained numerous NGOs to organize income-generating activities, delivered several lectures on NGO business planning, and published a handbook on developing on-line fundraising, enhancing relations with the market sector and strengthening overall financial sustainability.

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