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What Are the Different Types of NGO Funding?

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  • Written By: H. Terry
  • Edited By: Jenn Walker
  • Last Modified Date: 16 August 2014
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There are many different local and international sources of non-governmental organization (NGO) funding. On the local level, funding can come from governments, local businesses, and community foundations. On the international level, NGO funding sources include that from the official development assistance agencies of countries, UN agencies, and multilateral development banks; worldwide sources also include international foundations, multinational corporations, international religious organizations, and larger international NGOs.

Official development agencies are common in the governments of economically developed countries and serve to provide financial aid for developing economies. They might do this on a large scale basis by giving directly to a country's government, but also on a smaller scale by supporting NGOs and grassroots projects. This kind of NGO funding is often accessible by visiting an embassy in the country where the organization is operating and submitting an application. There are also various agencies within the United Nations system that offer funding in a similar way.

Multilateral Development Banks are called multilateral because many different governments fund their operations. The primary business of these banks is to provide loans to countries, but they can also provide grants to NGOs. Some of these banks have a global focus while others are aimed at developing particular regions.

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International foundations are set up with the specific aim of making grants to NGOs and other charitable organizations. These foundations are typically established through endowments, either on the part of a wealthy individual or a large organization. Many such foundations only offer funding for a specified aspect of development or for a particular region.

Global corporations are increasingly interested in supporting community and international development projects. This is largely because of an increased demand on the part of consumers for socially responsible business practices. Larger international NGOs also sometimes provide support for smaller ones acting on a more local level but with a related focus. Finally, on the international level, there are religious groups that contribute to NGO funding, though many of these do so with the stipulation that the organization is related to the same faith.

On the local level, there are government programs that might be appealed to for NGO funding. Local businesses might also be interested in having their names associated with development and community projects. There may also be local foundations already established that share some of the specific goals of the NGO and could collaborate by sharing funding as well as other kinds of resources.

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ddljohn
Post 3

That's very smart for businesses to fund NGOs. I knew that some large corporations have their own NGOs, but it didn't occur to me that small businesses would want to be associated with local NGOs too.

It's actually a great way to promote their services and products, especially if a certain percentage of the profit automatically goes to an NGO. I personally prefer brands that do this. I feel like it's a great way to help and you are still getting the product you want. It's a great business strategy and NGOs win too.

What I'm curious about is, do the businesses find the NGOs they want to work with or do the NGOs go to the businesses?

What does an NGO have to do to get funding and support from a business?

burcidi
Post 2

I interned with an NGO for a short time last year. Most of the funding actually came from sponsors and donations. It was an NGO that had a strong religious affiliation and it actually benefited from the religious belief and requirement to give alms. So people often donated money to the NGO instead of fulfilling that religious requirement some other way.

The NGO also served people who belonged to that faith. Some people see a problem with this, but it happens all the time.

I think that the NGO is just a way for people to help others that they wouldn't be able to otherwise.

SteamLouis
Post 1

I think that development agencies prefer to give funds to an NGO rather than the government of a country. The reason is because corruption is a big problem, especially in developing nations and nations in conflict. There is little or no transparency when it comes to how development money is being spent by the government. What's the point of giving funds to help the people if it doesn't reach the people?

NGOs are different though because NGOs are made up of social workers and locals that are sincerely concerned about welfare and helping people. I'm sure that there are a few exceptions, but almost all NGOs will make sure that the money goes where it needs to go.

That's why funding from development agencies to NGOs are increasing in my view.

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