Introduction
Voluntary organizations depend entirely on funding for their existences. These funds come from different sources such as state which is the major funder for most of them. Funding is one of the important areas in which the voluntary sector organizations cannot ignore while running these organizations.
It entails looking into an organizations’ short and long term survival as well as the challenges they face in delivering their services. It plays a big role in voluntary organizations especially in management, capacity building and infrastructure.
In other words, Voluntary organizations depend on funders for sustainability. Funders help in running core functions in these organizations that help achieve their goals and objectives.
Funding patterns for voluntary organizations are complex and are changing with times. The organizations thus find ways of surviving through this situation. The funding patterns fall under three broad categories. Portfolio funding is that which involve more than one funder who carries equal importance to the organization.
Single predominant funder involves one major funder while major or minor funder involves two institutions with an equal importance to the voluntary organization. Due to complexity of funding patterns, the voluntary organizations do not depend on one funder. In order to survive they engage a multiple funders so as cope with the dynamic situation (Gettler, 2007).
Impact on Capacity
Capacity building starts with the development of the voluntary organization itself. Stable funding ensures that the organization is well established in terms of capacity. Funding impact positively on the voluntary organizations because it enables them to acquire the capacity to do projects and give services they intend to offer to the society.
In order to receive regular funding the voluntary organizations should maintain good communication between themselves and the funders.
This improves the relations hence making the process easier when requesting for funds. Volatile funding leads to decrease in organizational capacity for voluntary sector. This therefore leads to inability of the voluntary organization to perform its duties hence do not achieve the overall goal.
Impact on Management
Funding in a voluntary sector organizations impact on the way a given organization is managed. In other words, it determines the way they are structurally governed and the way they make decisions as well as the activities they are involved in.
Funding therefore is an important factor as far as management is concerned. This is because it impacts on the way voluntary organizations perform their duties in order to achieve their overall goals.
Management of voluntary sector should work in a formal system that allows accountability. Management should be independent with no government influence. This is possible only if the voluntary organization is stable in terms of the resources.
If this is not the case government funding can sometimes bring about management challenges in which the funders may want to use the organizations to fulfill its own aspirations. Moreover the management may be forced to make decisions in favor of the funder. Poor management of the voluntary sector organization may result to its collapse in the long run.
Impact on Infrastructure
Voluntary sector requires infrastructure to effectively do their work. Stable funding ensures that there are resources required to support voluntary work and other community service. Volatile funding translates to inadequate infrastructures in a voluntary organization.
This in return affects the way activities are carried out. Due to unpredictable patterns of the funding process and the problems experienced as a result of depending on the external funding, most of the voluntary organizations fund their infrastructures internally. This ensures that their activities are not affected by irregular patterns of funding.
Funding Issues and Their Impact
It is important to note that dealing with diverse funding is one of the challenges faced by the voluntary sector. It takes more time and energy since it entails dealing with different institutions with different policies and hence different demands. Voluntary sector faces numerous issues today than it did years back.
This is due to influence of commercialization hence the process is costly. In addition, the voluntary sector is faced with challenge of increased demand for services and thus funds are never enough. With the stiff competition over the scarce funds, the voluntary organizations are impacted differently depending on the type of the voluntary sector organizations.
The well established ones are able to compete favorably hence less negative impacts. On the other hand, the less established voluntary organizations lack the capacity to compete for funds hence experience negative impacts in their management, capacity building and infrastructure (Muffels, 2001).
Conclusion
New funding practices that are complex and changing posses a great challenge to the voluntary sector organizations. This therefore calls for self sufficiency for these organizations. Self sufficiency can be achieved through earning income from other activities apart from depending on others for funds.
Self sufficiency will ensure that the voluntary organizations are not impacted negatively when failed by external funders. It thus means that they can stand on their own supporting its capacity to perform the duties they are supposed to perform. In addition, the issues affecting management and infrastructure can be addressed internally hence sustainability of the voluntary sector organizations.