Financial mix in locally based organisations

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Financial mix in locally based organisations
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Introduction

• Nonprofit Organisations (e.g. Social Services,
  socio-culturial organisations, community based
  organisations...) in Germany have experienced
  many changes due to a stronger orientation
  towards a market-logic also in the third sector
• Consequences
• Increasing gap between organisations following
  the economic rule (mainly social services,
  care-taking organisations...) and those who are
  still publicly funded (civil services, community
  based initiatives...)
• Increasing organisational differentiation within
  the organisation to meet the new challenges.

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Organisational Pre-Conditions

• General decision towards activities on profit
  marketObstacles
• Conflicts between ideal objectives and market
  orientation within nonprofit organisation
• Implementation of business-oriented working
  attitude
• Goals justify working-conditions
• Implementation of standards (e.g. quality
  management) only starting
• Changes in Organisational structure
• Either integration of variety of structures and
  objectives
• Or Outsourcing of service and economic-based
  sectors

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Consequences 1

• Organisations completely funded by service
  contracts (social / care-taking services,
  beginning childcare...)
• Organisational Structure
• Geographical independence
• Sectorial concentration
• Concentration on core objectives ? reduction of
  social objectives
• Increased pressure on working conditions

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Consequences 2

• Organisations with multi-oriented objectives
  measures
• Organisational structure
• Integration of additional projects through public
  / philantropic finance (e.g. community based
  services, advocacy, social consulting,
  intercultural work)
• Continuous negotiation to prioritise objectives
• Organisations (mainly) rooted within local
  community

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Non-market financing strategies

• NPOs attempt to raise mix of funds through
• Income (donations, membership dues)
• Public / private funding (mainly through
  projects)
• Sponsoring
• Tendencies
• Institutional funding decreases towards
  accumulation of project oriented funding
• Labour cost often subsidized through labour
  programmes and / or voluntary work
• Under-paid and overworked staff are a calculated
  loss

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Framing Conditions

• Further liberalisation of service market for
  private organisations (standards not
  withstanding)
• Public subsidies should support fundraising
  activities rather than punish them
• Liberalisation of funding-strategies for
  Nonprofits
• Revision of nonprofit law in Germany
• Improvement of subsidies and investment
  strategies for Nonprofits
• Building support-structures (financial and
  non-financial) for nonprofit organisations
• Building of supporting funds (e.g. co-financing
  fund)