Charities urged to diversify funding

Lisa Wells.
Lisa Wells.
Charity organisations need to diversify their funding sources in order to ride out the economic storm, fundraiser Lisa Wells says.

Mrs Wells is communications and fundraising director for Presbyterian Support Otago (PSO).

She has been looking at how PSO and other not-for-profit organisations (NPOs) can best survive uncertain and potentially difficult times.

PSO is Otago's fifth largest employer.

Combined, the country's seven Presbyterian Support regions make up the largest non-governmental social service agency in New Zealand.

One of the key challenges facing the country's NPOs was their over-dependence on trusts and foundations for revenue, Mrs Wells said.

"Organisations that do not have a secure financial base but are reliant on achieving their total operating income anew each year will be vulnerable,'' she said.

Compared with other countries, New Zealand NPOs receive "a very large proportion'' (58 per cent) of their philanthropic revenue from trusts and foundations.

"The over-representation of trusts . . . means we are overexposed to risk where their allocations are no longer increasing each year.''

Gaming trusts have said their distributions will be down by more than 15 per cent this year.

Harder hit have been the community trusts, which distribute funds from interest received from investments.

The result could be that some NPO "programmes and activities will have to be curtailed''.

In past recessions, many organisations with small funding bases had retrenched and became more reliant on volunteers - this at a time when demand for their services often increased markedly.

"We anticipate funding sources which are highly contested may not be available to us this year and the proportion of funds we receive from individuals and trusts, for example, may be quite different from in the past,'' she said.

Demand for PSO food parcels was about double what it was last year.

Organisations with a "diversified funding profile'' were best placed to "weather the storm'', Mrs Wells said.

"There will never be a better time to emphasise the importance of donor stewardship - looking after the relationships that the organisation has developed with its donors.''


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