Financial success is the cornerstone of an organization’s success. It is an important aspect in every organization, be it profit or non-profit organizations. Without having the financial resources, Non-governmental organizations (NGOs), such as the Plastic Soup Foundation could not run their projects and would consequently perish. For this reason, it is necessary to gain the trust of donors and to secure a way to get funding.How does PSF receive funds for their projectsThe plastic soup foundation is very limited in their attempts to gain funds. Like the majority of NGOs, they mainly collect resources used for their projects through donations. To do so, they use a few managerial strategies, such as online calls for donations. Furthermore, the organization is supported by a wide range of companies, mainly smaller Dutch businesses, for instance, Dopper and few larger international brands, such as G-Star Raw.
In exchange for financial resources, the company offers various support to the companies, for example by calculating their eco-impact and ways to reduce it. Lastly, the NGO runs different fundraising events, one being their Charity Dinner, in which they collected 57,550 euros in 2016 and other public events.Usage of financial resourcesAccording to the information that can be taken from their website, the way the PSF uses its resources can be said to be more or less effective. As you can take from the graph, most of the money goes into “Awareness and campaigns” which makes it look like they make very nice use of their resources. But this focus does not generally ensure that resources are used the most profitable and efficient way. Other departments such as Fundraising and especially “Management & Accounting” are crucial to ensure the sustainability of the organization, which is why not finding a balance in the breakdown of their resources could do more harm than good and reduce the organizations’ growth.The financial transparency of the Plastic Soup FoundationFor a non-profit organization like PSF, it is crucial to keep the trust of investors to ensure further funding. One way to keep the trust of those essential stakeholders is by continuously disclosing financial reports and -analyzes.
If this does not happen, private donors, as well as companies that patronize them, might lose their trust in how the organization uses their money, thus stopping their support. This is a major point of why the organization is so limited in their financial resources and to Dutch companies as donors. Even though they were transparent from 2011 to 2016, the Plastic Soup Foundation stopped publishing their yearly reports ever since. Apart from being mandatory for most non-profit organizations, it can also have the effect of people questioning whether the money would be used for the purpose they represent rather than for their own profit.
As stated above, this might lead to vital supporters deciding to stop their donations of any kind, which would be a huge throwback for the organization if not leading to the companies’ downfall.Conclusion and recommendationsAll in all, you could come to the conclusion that even though the Plastic Soup Foundation seems to be quite successful, especially in their finances there is a lot to improve. First, they should come up with events and strategies to reach out of their current Dutch environment and find new prospect donors.
To do so, it will be crucial for the organization to increase their transparency on resources to create a sense of security for their investments/donations. Lastly, a thorough analyzation on their distribution of resources and could perhaps be followed by a reallocation of those resources could increase the companies efficiency by a high percentage.