last updated September 1, 2003
Some organizations generate revenue through fees for services. Organizations may support themselves in whole or in part through fee for service programs, or they may charge a fee to some clients in order to subsidize services (free or lower cost services) to others with fewer resources. The ability of NGOs in the CEE/FSU region to charge services has been mainly limited by their clients' inability to pay and the public's "general belief that NGO services should be free." From USAID, 2002 NGO Sustainability Index for Central and Eastern Europe and Eurasia 7 (2002).
Some NGOs support their work by creating a private, self-supporting business venture. Others supplement their existing revenue by offering T-shirts, newletters or books for sale. Although such projects can be important funding sources, there can also be obstacles to developing a for-profit business venture. USAID reports that "NGOs throughout the region have also remained hesitant to become engaged in income-generating activities for a variety of reasons." For example,
few NGOs have the business management skills necessary to assess the market to see what it will bear. Many NGOs also fear that charging for their services will blur the distinction between them and for-profit businesses. Additionally, the tax regime in many countries of the regime discourages NGOs from charging for their products and services by charging them the same taxes as for-profits.
From USAID, 2002 NGO Sustainability Index for Central and Eastern Europe and Eurasia 6 (2002).
Finally, the legal environment may place limitations on an organization's ability to earn revenue. There may be legal restrictions concerning revenue-earning activities by a NGO, or the law might require segregation of for- and non-profit activities (e.g., separate personnel, facilities, accounting). | 