How is an NGO funded and what are the implications of its humanitarian work?

Knowing how an NGO is funded is essential to understand precisely how it works today and its impact within emergency social settings.

In fact, a Non-Governmental Organization (NGO) is a nonprofit institution whose aim is social aid, defined according to the particular type of institution.

To find out how an NGO is funded, keep reading this article. As a result, you will know what an NGO is and what its social function is, and you will have all the information to make your donations with complete confidence.

1. What is an NGO and what are its characteristics?

To understand how an NGO is funded, it is necessary to know which elements define what an NGO is.

These organizations are entities whose purpose is the social good and which are made up of people who share a common vision, mission and goals.

Legally, in Argentina, an NGO must register as a "Civil Association" (Asociación Civil) or "Foundation" (Fundación). Both legal forms are regulated by the Civil and Commercial Code of the Nation.

From a historical perspective, the concept of "NGO" has its origins in the World Health Organization (WHO). Created in 1945, and although it is an intergovernmental entity, it has been a model for the formation of this type of entity around the world.

Before addressing how an NGO is funded, we will point out some of its distinguishing qualities:

• They are autonomous, since they do not depend on State management.
• They have no profit motive.
• They come in different types, depending on each of the legally established goals and the values that define them.
• If you wonder what an NGO is and what its purpose is, you should know that they have a social and humanitarian perspective. As Diego Bustamante, founder of Pata Pila and named by EY Argentina as the 2022 social entrepreneur of the year, states in an El Cronista article: "There is a big imbalance in access to basic rights compared with cities. The Indigenous communities of the north of the country live in a situation of structural poverty and opportunities are far away." This is an example of how an NGO seeks to guarantee people's rights and quality of life according to its area of action.
• To understand what an NGO consists of, they need financial contributions from the community to fulfill their social goals.

2. How are NGOs funded?

For this type of institution to function, it requires not only will and a common goal, but also sufficient financial means to achieve each of the planned projects.

If you want to know how an NGO is funded in Argentina, here we detail the most widely used ways of receiving funds within the work environments of anti-poverty NGOs in our country:

Public funding

First, some usually receive funds from public entities. To understand how an NGO is supported in Argentina, it is important to stress that a percentage of public spending is usually allocated to NGOs.

At the same time, they must be legally registered according to each jurisdiction within Argentine territory. This is for the granting of the corresponding legal status.

On the other hand, if you want to know more about how an NGO is funded, it should be noted that some decide not to take part in calls to receive this type of funds. In this way, they maintain their autonomy and are not associated with any ideology or political party.

Likewise, all enjoy tax exemptions from Gross Income Tax and Income Tax. This applies if the income received by the NGO is used as legally established.

Private contributions

Moving a bit further in this analysis of how NGOs manage to fund their activities and projects, we cannot fail to mention private funding. This can come from companies or from individuals.

In this section, we list the most common forms of funding from the private sector, for specific projects or for carrying out their daily work:

• Financial contributions from individuals (monthly or with no set frequency).
• Money from donations by legal entities, such as private institutions or companies.
• Crowdfunding campaigns as a strategy for receiving money collectively, run by individuals and business organizations.
• Volunteering: human capital is another of the most efficient resources available to fulfill their social mission. Generally, volunteering arrangements vary depending on the characteristics of each institution. To understand a little more about how an NGO is funded, for example, at Pata Pila, you can be a volunteer in the field, both in the province of Salta and in Mendoza. And at the same time, you can help remotely or in person at the office in the Autonomous City of Buenos Aires (CABA), if you are a web developer, graphic designer, lawyer or have marketing knowledge, among other disciplines.

In summary, understanding how an NGO is funded and what it does is essential to know its role in society and how it operates. NGOs need third-party funding to meet their social goals and change people's quality of life.

Remember that you can be part of La Comunidad of Pata Pila, through your monthly donation, and change the lives of many people who live in vulnerable communities.

Changing realities with your contribution is possible. That's why, make a difference today. Help us help and together we will see the results.