Stability Funds

Several development initiatives and projects build stability funds as a strategy to become more self-sustainable.

Funding sources in the development field are often limited, which is why support is not always easy to get or to keep. Besides, sometimes the money that has actually been secured gets delayed, or budgets are cut back and are no longer sufficient. This is why several development initiatives plan strategies to manage their resources in such a way that they can create and secure some savings.

Having savings is a preventive measure that helps self-sustainability because it makes many development projects less vulnerable to the instability that could otherwise affect the pace of their work and the well-being of staff or beneficiaries. In addition, when an initiative already has the minimum of resources it needs to operate, it can better negotiate financial support with donors without making too many concessions for fear of not getting more funds. Savings also help ensure that all aspects or areas of an initiative’s work are covered and not just the ones that yield the most profit or attract the most resources, which is key to building more comprehensive solutions that are relevant –on a consistent basis– to more people.

Some initiatives have a fund that is only tapped to cover expenses that didn’t get funded that particular year, or to get on with their work while they secure or find other sources of support ––and they always try to put the money back in the fund eventually. Others put together a fund large enough to work with just the interests it generates. Still others have money set aside as a precautionary measure in case an emergency or eventuality intensifies their work (initiatives that work with disaster relief, for instance, need to build up funds to be able to act quickly when they have to).