Financial sustainability is not the result of better fundraising, but of deliberate choices about revenue generation, cost discipline and organisational design.
In conversations about financial sustainability for mission-driven organisations - NGOs, nonprofits, social enterprises - I keep seeing the same pattern: financial sustainability is treated as a fundraising problem, when it is in fact a design problem.
Uncertainty is the new normal
The funding landscape for mission-driven organisations is changing rapidly. Official development assistance is under pressure. Major donors have reduced or restructured funding and many NGOs and social enterprises are already feeling the consequences. And for many organisations, the funding gaps have become an existential crisis.
- In 2025, Accountability Lab, Humentum and Global Voices published a series of reports about how aid cuts were affecting NGOs. By October, 20% of respondents said they had one month of financial resources left. Between May and October, the number of organisations reporting being at risk of closure increased from 28% to 38%. Most respondents said more than half of their budgets had been impacted and by October, most also reported huge cuts in their budget projections for 2026 compared to 2025.
- At the launch of the African NGO Fundraising Hub - a platform bringing together practitioners and funders to rethink how NGOs approach fundraising, curated by David Barnard and Hexa Media Africa - Ntefeleng Nene from The Bridgespan Group shared that many NGOs have scaled back or closed down. Many other organisations are now focusing on short term survival and difficult decisions are being made about what programmes to cut.
In this environment, financial sustainability cannot just be a paragraph in a fundraising proposal. It must shape how the organisation is built and how it operates.
The good news is that mission-driven organisations can build financial sustainability and reduce donor dependency. But it requires a solid strategy that includes a diverse range of income sources.
Financial sustainability is the result of deliberate financial design
In practice, this comes down to three things:
- building reliable income streams
- maintaining cost discipline
- and designing for resilience from the start.
Many organisations are structurally designed around donor funding, which makes financial sustainability difficult to achieve without rethinking underlying incentives and revenue logic.
Over the years, I have been grappling with financial sustainability questions while building and leading two organisations in Liberia: a women & youth entrepreneurship programme run by my NGO, Mineke Foundation, and Damiefa School, a low-fee private school that was founded by my parents. In both cases, increased financial sustainability was not the result of better fundraising. It emerged from clear choices about revenue generation, cost discipline and growth.
Case example: Damiefa School, Liberia
Damiefa School was founded in 1982 by my parents. It had to close after falling into disrepair due to damages sustained during the Liberian civil war. The school continues my parents’ vision to offer affordable, quality education from nursery through high school (Grade 9). In Liberia, 70% of the population is estimated to live on less than US $3 a day. Over 90% of our students come from these low-income families.
In 2020, Mineke Foundation received funding from a private foundation to renovate the school and to cover operations. We completed renovations at the end of 2023.
We reopened the school in November 2021 with just 17 students. In the first years after reopening, we focused on rebuilding the school's reputation for quality education and building relationships, including with the Ministry of Education-Liberia and Liberia Reads!.
Earned income in the first two school years was modest. As enrolment grew and systems strengthened, our cost coverage improved:
- More than 50% in school year 2023/2024
- Approximately 65% in school year 2024/2025 despite significant cost increases due to higher-than-expected student growth. We also launched scholarships for children from the poorest families, supported by individual donations.
- Projected 80% in school year 2025/2026 as student growth and professionalisation continue
- Break-even is expected in the 2026/2027 school year. Mind you, this is minimum viable operations only, nothing fancy!
Fundraising alone is no longer enough
When I started Mineke Foundation, I was very clear that I wanted to build an organisation that could survive without grants and donations. I also wanted to build an organisation characterised by knowledge exchanges between team members in Liberia and international expert volunteers. But it took me a while to figure out how to do this.
The first few years, we carried out projects in collaboration with a local NGO in Liberia. Eventually, not satisfied with the results, we decided to register as an accredited local NGO.
Our early years were fully funded by donations. Funding came from private foundations, businesses and individuals. This allowed us to test various approaches and address questions like, What kind of income generation model makes sense given the daily realities of the people we work with?. Some approaches failed, some worked okay for a while, and some seemed promising but collapsed when a crisis hit. (We got knocked down a few times, like during the Ebola crisis and the COVID pandemic.)
We learned a lot from all of them and today, we are on course to become financially self-sustaining. That doesn’t mean that fundraising will no longer be necessary. It remains a key part of our work.
For example, for our school, even after we reach break-even, we will continue raising funds for investments that strengthen future income (or help reduce costs) and for scholarships for the poorest children in our community.
Case example: Women’s Club (entrepreneurship programme)
Mineke Foundation also runs a women and youth entrepreneurship programme in Liberia. Currently, we have about 300 members, 92% of whom are women between the ages of 19 and 71. Most are petty traders and many are semi-literate.
We’d been working with women for several years – focusing on vocational & business training – until COVID forced a shutdown and killed what we’d built. While we had also tested various income generating strategies, our work remained dependent on donations.
In 2022, we redesigned the programme together with the women and piloted it in 2023. The first two years were fully funded by donations and focused on refining our model.
However, income generation mechanisms again formed part of the programme design right from the start. We started testing our income generating strategies in 2025:
- In 2025, our income generation was equal to about 10% of operational expenses.
- In 2026, despite a more than 50% increase in projected costs due to member growth, earned income is expected to equal about 20% of operational expenses.
We’re not yet sure that we will reach 100% cost coverage, mainly because we work with women who run businesses just to survive. Grants and donations therefore remain an important part of our model, just like at the school.
However, our goal is to reach a level of financial sustainability that will allow the core programme to always continue regardless of funding. Then, once we reach that level of self-reliance, fundraising can help us have even more impact, so that we can go above and beyond what we can do by ourselves.
What financial sustainability actually requires
So, how can NGOs, non-profits and other mission-driven organisations build financial sustainability? The key mindset shift is this: yes, fundraising remains necessary, but it is no longer sufficient to only do fundraising. Not only because the funding landscape has changed, but also because grant funding was never intended to continue indefinitely.
In discussions during the launch of the African NGO Fundraising Hub, Michael Kiragu pointed out that many non-profits are structured to get funds from the EU, US and major donors. With funding dropping, they don’t know what to do, because they’ve never built a model that incorporates multiple income sources. Whether sponsoring, earned income or paid services.
The key difference in our work – and the mindset shift that I work on with organisations – is that we see fundraising not as a way to keep the organisation alive in the long term, but first and foremost, as a stepping stone to self-reliance.
This also has implications for funders and ecosystem actors. Supporting financial sustainability requires moving beyond short-term project funding towards enabling organisations to test, refine and build viable income models over time.
Just so we’re clear, this is not to underestimate or underplay the importance of grants and donations! It is of key importance to us, most especially in the years where we’re experimenting with and developing other income streams. But eventually, grants and donations should become one of several income sources. Aka, diversification is necessary. And there, for me, lies the key to building an organisation that is financially sustainable.
What changes when organisations generate their own income
When an organisation starts generating a meaningful part of its own income, interesting things start happening:
- Donors see lower risk. An organisation that can cover part of its operating costs demonstrates financial discipline and “customer” demand. Lower risk for donors often means more interest in your projects.
- The organisation's negotiating power increases. Simply put: the organisation is less likely to accept unfavourable conditions out of desperation.
- Planning horizons lengthen. Once an organisation has a solid financial foundation, leadership can focus on programme quality rather than on the survival of the organisation.
- The conversation with funders changes from how they can cover operating deficits, to how they can best support increased impact. We are starting to see this at Mineke Foundation, as funders have started approaching us to ask if they can give us money so that we can grow the programme further.
In other words, alternative income does not replace donor funding but it changes the relationship that organisations have with them. And, in my opinion, it leads to a more equal relationship.
Because the question changes from, “How do we secure the next grant from you so we can survive for one more year?” to, “How do we develop our partnership so that we can continue delivering impact even as participant numbers increase?”.
And isn’t that a much more interesting conversation to have?