Finnish government explores opportunities to support fundraising

With public funding likely to decrease in the coming years, the Finnish Government has been exploring how to support the nonprofit sector’s fundraising, with the options presented in a new report.

The research saw a governmental working group along with not-for-profit organisations (NPOs) look into alternative funding methods such as tax deductions for donations and gift matching schemes, as well as state grants. In January the Ministry of Finance published a report on the findings with a focus on the latter and has now requested feedback from stakeholders.

VaLa, Finland’s fundraising association, says fundraising in the country has now professionalised and NPOs need support to implement sustainable and successful fundraising. It states that broadening the funding base and having more long-term financial sources will help.

VaLa’s secretary general Pia Tornikoski comments:

“Traditionally, many Finnish NPOs have received state funding for their operational costs in two forms: general and project grants. Different ministries direct funds consisting of hundreds of millions of euros to organisations. The ongoing work of the ministries is also aimed to harmonise the whole state funding system. The potential direct support for the fundraising operations of NPOs would be the same for organisations of all sectors, from international aid to sport clubs. NPOs would also have freedom to choose what kind of fundraising methods they would like to invest in.”

The report presents different options along with an estimation of the impact each could have:

1. A general grant would cover the fundraising deficit as a loss guarantee. The goal is to encourage organisations to raise funds without fear of loss. However, the working group acknowledges that this option is problematic because it would finance unprofitable activities. This option of a loss guarantee has also been questioned by NPOs, as it would require very precise limitations and definitions.
2. Fundraising costs would be covered up to a certain maximum amount. Under this option, the organisation would be able to use the part of its general grant for fundraising costs. NPOs could therefore decide whether to invest in fundraising or not. This method is largely viewed positively by NPOs, as it would support the organisation’s own decision-making and autonomy regarding how the general grant is used and where it is directed.
3. The government would develop a special project grant for starting or developing fundraising.
   The project grant could be useful for those organisations that do not receive general grants or those that want to invest in fundraising activities. It would also give regional and local NPOs an opportunity to apply for funding solely for fundraising. This option is viewed positively by NPOs especially in the case where the special grant would not be excluded from other funding.

The stakeholder feedback will be taken into consideration before any further action is taken.

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