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An investigation of funding models that influence the sustainability of selected non- profit organisations in Cape Town
Author(s)
Ayinkamiye, Esperance
Date Issued
2021
Type
Thesis
Publisher
Cape Peninsula University of Technology
Abstract
While the concept of funding models is well developed for profit making organisations, it is not
as well developed in the non-profit sector. The aim of this study was to explore different funding
models used by non-profit organisations and how these funding models influenced the financial
sustainability of organisations. The study objectives were to determine the funding models
applied in human rights-based organisations, to establish how chosen funding models
influence the financial sustainability and to identify the constraints and stimulators for
implementing viable funding models. Qualitative research methodology was employed,
conducted on five human rights non-profit organisations located in the City of Cape Town. Data
were collected through face-to-face interviews and documents (annual budgets, audited
financial statements and funders’ dashboards) obtained from the selected organisations. The
data were analysed using content analysis, which groups data into themes, similar data into
topics and developing the most descriptive analysis for each topic. Document analysis was
done using financial statement analysis tools, being ratio analysis and comparative financial
statement analysis.
The study found that the most used model was the big bettor, used by all five organisations.
The second most-used models were public provider, beneficiary builder and member
motivator, each used by two organisations. Regarding the relationship with funding models
adopted and financial sustainability, this study suggests that the more diverse sources of
funding an organisation has, the more financially self-sufficient and sustainable it will be. This
study found that the organisation that managed to diversify its sources of funds was financially
sustainable and this organisation mixed the five different funding models of the big bettor, the
public provider, beneficiary builder, member motivator and resource recycler.
The study identified four main constraints faced by non-profit organisations in their efforts to
develop funding models. These constraints are no dedicated person responsible for
fundraising, non-standardised reporting templates, restricted funds and high competition
among non-profit organisations for the same funders and a limited number of funders for South
African non-profit organisations. These constraints exist despite non-profit organisations being
favoured by policies that enable them to work freely and by the State using non-profit
organisations to provide a variety of services to a society, which stimulates non-profit
organisations as it provides a reliable source of income.
as well developed in the non-profit sector. The aim of this study was to explore different funding
models used by non-profit organisations and how these funding models influenced the financial
sustainability of organisations. The study objectives were to determine the funding models
applied in human rights-based organisations, to establish how chosen funding models
influence the financial sustainability and to identify the constraints and stimulators for
implementing viable funding models. Qualitative research methodology was employed,
conducted on five human rights non-profit organisations located in the City of Cape Town. Data
were collected through face-to-face interviews and documents (annual budgets, audited
financial statements and funders’ dashboards) obtained from the selected organisations. The
data were analysed using content analysis, which groups data into themes, similar data into
topics and developing the most descriptive analysis for each topic. Document analysis was
done using financial statement analysis tools, being ratio analysis and comparative financial
statement analysis.
The study found that the most used model was the big bettor, used by all five organisations.
The second most-used models were public provider, beneficiary builder and member
motivator, each used by two organisations. Regarding the relationship with funding models
adopted and financial sustainability, this study suggests that the more diverse sources of
funding an organisation has, the more financially self-sufficient and sustainable it will be. This
study found that the organisation that managed to diversify its sources of funds was financially
sustainable and this organisation mixed the five different funding models of the big bettor, the
public provider, beneficiary builder, member motivator and resource recycler.
The study identified four main constraints faced by non-profit organisations in their efforts to
develop funding models. These constraints are no dedicated person responsible for
fundraising, non-standardised reporting templates, restricted funds and high competition
among non-profit organisations for the same funders and a limited number of funders for South
African non-profit organisations. These constraints exist despite non-profit organisations being
favoured by policies that enable them to work freely and by the State using non-profit
organisations to provide a variety of services to a society, which stimulates non-profit
organisations as it provides a reliable source of income.
Additional information
Thesis (MTech (Business Administration))--Cape Peninsula University of Technology, 2021
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