Financial Sustainability

Subsection Objective: To assess the organization’s finance strategy and its ability to secure a diversified revenue base, to generate reserves and
to sustain its operations without donor funds.

Resources: organization’s budget, annual financial statements, strategic plan, finance strategy (business plan)

Financial Sustainability 
1 2
The organization has The organization has
• Full dependence on one external • Almost full dependence on external
donor donor funds (more than one donor)
• No unrestricted funds • Limited unrestricted funds
• Not enough liquidity to pay all • Not enough liquidity to pay all
outstanding financial obligations outstanding financial obligations
• No documented finance strategy • A finance strategy that is not fully
documented
3 4
The organization has
• A somewhat diversified funding base,
but is too reliant on restricted
income
• Limited reserves to operate without
donor grants
• Enough liquidity to pay all outstanding
financial obligations
• A documented finance strategy that is
not fully in line with the strategic plan
and is not reviewed regularly
The organization has
• A diversified funding base with strong
stakeholder relationships
• Income-generating activities and/or
unrestricted sources of income
• Enough liquidity to pay all outstanding
financial obligations
• Enough reserves to run for a few
months without any donor funding
• A written policy for building/maintaining
reserves
• A documented finance strategy in line
with the strategic plan and reviewed
regularly

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