Income sustainability Although donated support from the private and public sector continues to dominate the income sources for NFPs in absolute terms, the expectation is that alternative forms of income will grow in importance. Becoming financially self-sustainable is the ultimate goal for an NFP. Although this remains elusive for many, the survey points to a gradual improvement in this area.
Encouragingly, this reduction in government reliance and stagnation in fundraising is in part due to the implementation of self-funding mechanisms. There was a 13% increase in the number of NFPs expecting investment income to be one of their top three sources of income by 2025 and a 7% increase in the number of organisations expecting commercial activities to be one of the top three sources of income by 2025.
When asked about NFPs expectations regarding changes in their funding sources between today and 2025 the responses highlight an 8% reduction in the number of NFPs expecting government funding to be their primary income source. This said, government funding will continue to dominate as an important funding source for some time, with little reduction in the number of organisations rating government funding as one of their top three current funding sources.
Although these alternative funding sources are coming off a low base, it shows increased confidence in the ability to develop long term financial sustainability.
The number of NFPs expecting to rely on donations and fundraising as one of their top three income sources remains relatively unchanged between 2022 and 2025. As we emerge out of the pandemic, this result was somewhat surprising, as many would have expected fundraising to see a substantial jump, as event capacity and social interaction increase following the restrictions of COVID-19. Some articles providing sector commentary suggest a ‘gradual shift by NFPs to focus on winning more major donors and reducing the effort to chase smaller donors.’
NFPs expected change in funding sources between 2022-2025 2022
2025
8%
Reduction in NFPs expecting government to be their primary income source by 2025
13%
The overall importance of donations and fundraising are expected to remain consistent up to 2025
Increase in the number of NFPs expecting investment income to be in their top three funding sources in 2025
6
7%
Increase in NFPs expecting commercial activities will be one of their top three income sources by 2025
