Sustainability economics involves ecological economics where social, environmental, and financial arenas are inextricably intertwined. There is no 'magic bullet' appraoch to financial sustainability. It is important to adopt a holistic approach, recognizing the relative importance of all categories of NGO income: government funding, private philnathropy, and self-generated. Strategically defining revenue sources is especially important for SCOs. To legitimate themselves, organizations must show that they have others to corroborate their social raison d’etre beyond their own survival.
In some cases, NPO's can be better likened to government organizations (GOs) than for-profit enterprises; both NPOs and GOs define the value they produce in terms of the mission of their organization rather than its financial performance. Additionally, they secure revenues from people who are (voluntarily or involuntarily) paying for external benefits for others, rather than consumers operating for their own personal gain and benefit.
In the world of nonprofits, the mission defines the value and purpose of that organization, therefore it becomes an important metric for evaluating the success and profitability of its programs. Though mission statements tend to be broad, abstract ideas, in some ways they are more concrete and specific than the goals embraced by a for-profit firm when specifying the scope of goods and services produced. The overshadowing accountability expectations of mission can help NPOs stay focused and aligned while for-profits have the oft misguided "white rabbit" of profits leading them farther down any number of tangental paths.
In some cases, NPO's can be better likened to government organizations (GOs) than for-profit enterprises; both NPOs and GOs define the value they produce in terms of the mission of their organization rather than its financial performance. Additionally, they secure revenues from people who are (voluntarily or involuntarily) paying for external benefits for others, rather than consumers operating for their own personal gain and benefit.
In the world of nonprofits, the mission defines the value and purpose of that organization, therefore it becomes an important metric for evaluating the success and profitability of its programs. Though mission statements tend to be broad, abstract ideas, in some ways they are more concrete and specific than the goals embraced by a for-profit firm when specifying the scope of goods and services produced. The overshadowing accountability expectations of mission can help NPOs stay focused and aligned while for-profits have the oft misguided "white rabbit" of profits leading them farther down any number of tangental paths.
Profit
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Financial Sustainability in Nonprofit Organizations can be achieved through:
- diversified revenue
- periodic program evaluation
- FIG (Filling an Important Gap)
- distinctive product positioning
- effective marketing
- define mission in quantifiable terms