Benefits and risks of self-financing of NGOs: empirical evidence from the Czech Republic, Slovakia and Austria

Ekonomika a managemen 120 2014, XVII, 2 DOI: 10.15240/ ul/001/2014-2-009 In oduc ion The impulse o p ocessing he p esen ed pape was a scien i ic esea ch o John Hopkins Uni e si y in Bal imo e (USA) om which he esul s a e s udies which compa e he in e coun y non-p o i sec o , desc ibing he size and powe o di e se indica o s. The esea ch was ca ied ou in 1995, wen y- wo coun ies pa icipa ed, among hem he Czech Republic, Slo akia and Aus ia. These coun ies we e pa o he Aus o- Hunga ian Empi e be ween he yea s 1867–1918. E en du ing his pe iod he e was a non-p o i sec o , ep esen ed by cha i ies and a ious olun a y associa ions and sel -help g oups o ins i u ions p o iding social and heal h se ices o he poo . A e he collapse o he mona chy, he non-p o i sec o was de eloped in he successo coun ies o Aus ia and Czechoslo akia and la e on in coun ies o Czech Republic and Slo ak Republic a e hey spli in 1993. Di e en poli ical egimes ha e a ec ed he non-p o i sec o and i s o ma ion in hese coun ies [10], [13]. Acco ding o a ailable in o ma ion such as udy, based on p ima y esea ch and ocused on bene i s and isks o sel - inancing o NGOs in hese coun ies, has no ye been published. All so- a published s udies emain a a summa izing and desc ip i e le el. Scope o non-go e nmen o ganiza ions (NGOs) is so di e se ha i is impossible o ind asingle e m o de ine hese o ganiza ions. The e o e many au ho s (e.g. see Anheie and Salomon, 1997; Bú o a, 2011, F iã, Goulli, 2001, Haken, 2005, Hansmann, 1996; Hyánek, 2011; Ku íko á, 2004; Ma ãek, 2004; Ond u‰ek, 1998; Pes o , 2006; Pe ijo á, Woleko á, 2006; Rek ofiík, 2001, Rose-Acke man, 1996; Toeple , 2003, Weisb od, 1988 and o he s) in a numbe o publica ions p e e a b oade desc ip ion o he cha ac e is ics o non-p o i o ganiza ions. The s uc u al-ope a ional de ini ion by Anheie and Salamon [7] can be used. Acco ding o his de ini ion an NGO should mee i e cha ac e is ics: ins i u ionaliza ion, independence, non-dis ibu ion cons ain , sel -go e nmen , olun a y pa icipa ion. The concep s o non-p o i and non- go e nmen o ganiza ions ha e many names and likewise he e a e also a numbe o names o sel - inancing [2], [4], [6], [11]: gain ul occupa ion, economic ac i i y, en e p ise o NGOs, non-p o i business, income om NGO’s own ac i i ies, communi y business. NGOs ha e no ye eached such a le el o economic and manage ial p o essionalism o be able o exis solely on sou ces om sel - inancing ac i i ies (membe ship ees, sale o se ices and p oduc s, he use o in angible and angible asse s, and he use o in es men app ecia ion). I is no hei goal – i would be in con adic ion o se e al p inciples o hei inancing (mul i-sou cing, non-dis ibu ion cons ain ). In he pape we wan o p o e ha sel - inancing may be in compliance wi h he non- dis ibu ion cons ain o NGOs [17], e.g. i is asui able me hod o und aising o NGOs, wi h espec o he bene i s and isks ha sel - inancing en ails. We explo e whe he and o wha ex en he sel - inancing has an e ec on he non-dis ibu ion-cons ain o NGOs. BENEFITS AND RISKS OF SELF-FINANCING OF NGOS – EMPIRICAL EVIDENCE FROM THE CZECH REPUBLIC, SLOVAKIA AND AUSTRIA Gab iela Vaceko á, Má ia S id oÀo á EM_02_14_zlom 4.6.2014 8:54 S ánka 120 Business Adminis a ion and Managemen 1212, XVII, 2014 1. Resea ch Me hodology The pape p o ides a new insigh in o he s udied p oblem while gene a ing an empi ical basis o u he scien i ic s udy and esea ch wo k in his ield. The goal o he pape is o iden i y pa icula bene i s and isks o sel - inancing o NGOs based on ele an empi ical indings om he Czech Republic, Slo akia and Aus ia. P ima y da a was ob ained by he sociological me hod o a s uc u ed ques ionnai e. The da a gained in he Czech Republic in 2013 a e a pa o he indings o he Masa yk Uni e si y p ojec „CZ.1.07/2.3.00/30.0009 Employmen o Newly G adua ed Doc o s o Science o Scien i ic Excellence“. Fo Slo akia he da a a e he indings o p ima y esea ch conduc ed in 2012 wi hin he disse a ion "Sel - inancing and sus ainabili y s a egy o non-p o i o ganiza ion" ha was pa o he p ojec “VEGA 1/1001/09 2009–2010: The s a us o he non-p o i , non- go e nmen al sec o in building a amewo k o he p o ision o public se ices (Eu opean Pe spec i es)” sol ed by a eam o au ho s om he Facul y o Economics, Ma ej Bel Uni e si y in Banská Bys ica. Sou ce da a o Aus ia a e he indings o he p ojec "Di e en sou ces o unding o non-p o i o ganiza ions" [9] conduc ed in 2010 by he Resea ch Cen e NPO-Kompe enzzen um WU Wien. In o de o achie e compa able indings he same esea ch s eps in he coun ies we e chosen [1]: Selec ion o ele an NGOs in he da abase o on he In e ne . Es ablishing pe sonal con ac wi h selec ed NGOs a managemen le el. Sending an e-mail wi h a link o an online- ques ionnai e o con ac s ha ha e been iden i ied in he p e ious s ep. Sending a eminde a e wo weeks om he s a o ques ioning. Based on a selec ed sample o NGOs in he Czech Republic (CZ), Slo akia (SVK) and Aus ia (AT) we can ocus on he sel - inancing o NGOs in he con ex o i s bene i s and isks. Fo u he in o ma ion abou sel - inancing and sus aina- bili y s a egy also he bes p ac ices o selec ed Czech and Slo ak NGOs can be aken in o aconside a ion (see S id oÀo á, 2013 – [15]). Non-p o i o ganiza ions can be classi ied in e ms o he ounde o p op ie o o he go e n- men (non-p o i s a e) and non-go e nmen (non-p o i p i a e) o ganiza ions, i.e. NGOs. We ocus on NGOs ha a e ep esen ed in he Czech Republic as ollows: Ci ic associa ions (46% o esponden s); Founda ions (6% o esponden s); Founda ion unds (2% o esponden s); Public bene i o ganiza ions (21% o esponden s); Chu ch o eligious associa ions (25% o esponden s). Due o he ac ha in he Czech Republic we s a ed he su ey in 2013 and we ha e jus pas ed he phase o a p e- esea ch (including he pilo es ing) we ha e answe s om 67 esponden s (o he su eyed 250 NGOs). In Slo akia he ou main ypes o o ganiza ional-legal o m a e e y simila : Ci ic associa ions; Founda ions; Non-in es men unds; O ganiza ions p o iding public bene i se ices. O he 670 su eyed NGOs we ob ained da a om 182 esponden s, he sample s uc u e is shown in Table 1. I is a inal numbe o esponden s, Chi-squa e es p o ed he ep esen a i eness o ou sample a he signi icance le el alpha o 0.05 (p- alue o 0.129 > alpha): Tab. 1: Sample size in Slo akia Legal o m Absolu e numbe Rela i e numbe Ci ic associa ion 152 83.52% Founda ions 6 3.30% Non-in es men und 3 1.65% O ganiza ions p o iding public bene i se ices 17 9.34% O he s (Chu ch associa ions, Red C oss, e c.) 4 2.20% To al 182 100.00% Sou ce: own esea ch, 2012 EM_02_14_zlom 4.6.2014 8:54 S ánka 121 Ekonomika a managemen 122 2014, XVII, 2 In Aus ia (266 esponden s) he e a e he ollowing legal o ms o NGOs: "Ve ein" (associa ion), "S i ung" ( ounda ion), "gemeinnü zige Kapi algesellscha " (public bene i o ganiza ion), "Genossenscha " (coope a i e). Likewise, in he Czech Republic and Slo akia he s onges ep esen ed and he e o e he dominan legal o m is he associa ion [8]. The p esen ed esul s a e e y de ailed in Slo akia, in he case o he Czech Republic and Aus ia he esul s a e no so comple e and de ailed. I is due o a di e en scope o he su eys and di e en sample sizes in he selec ed coun ies. The su eys hemsel es we e conduc ed unde each coun y speci ic ci cums ances, so he NGOs samples a e no compa able in e ms o ime and size; i was no he aim o ou su ey. We do no wan o make any compliance es s among he coun ies; we analyse and in e p e ob ained p ima y da a in o de o acqui e an empi ical knowledge which allows us o o mula e se e al solu ions and ecommenda ions o heo y and p ac ice in he ield o sel - inancing o NGOs. We ha e da e om wo comple ed su eys (AT and SVK) and one p elimina y su ey in Czech Republic. The e o e we do no p o ide he analysis o he same dep hs in all h ee selec ed coun ies and do no y o in e p e he causali ies and esul s o s a is ical es , which would compa e he h ee di e en esea ch samples. I is no he scien i ic goal o he pape , and i would be i ele an o he su eyed opic. 2. Resul s and Discussion The ou pu o he pape is de ining bene i s and isks o sel - inancing o NGOs wi h ocus on an empi ical app oach. We poin ou he di e ence be ween sel - inancing and comme cial/ /business ac i i y o NGOs, and on he basis o ele an ou comes o p ima y (p e-) esea ch in CZ, SVK and AT we p o e ha sel - inancing is no only a business ac i i y in he common ma ke concep ion. We also wan o show ha sel - inancing may no be inconsis en wi h he non-dis ibu ion cons ain o NGOs. 2.1 Sou ces o Funding NGOs The main di ision o sou ces ollows he mic oeconomic di ision on equi y and bo owed capi al. The concep o equi y is p oblema ic in many NGOs as hey do no ha e any equi y in he business o economic meaning. Gene ally, he e is a lack o in es o s who would p o ide capi al in an icipa ion o ea nings. Classic ea u es o equi y a e o en unde aken by dono s, p o ide s o subsidies o membe s o he o ganiza ion. To ake in o accoun his aspec we use he e m "quasi-equi y"[9]. The "quasi-equi y" can be di ided in o ypical non-p o i incomes and s anda d comme cial incomes. Unde ypical non-p o i incomes [12] we unde s and incomes p ima ily ela ed o he main co e wo k and mission o an NGO; hese incomes may come om a a ie y o unde s. Comme cial incomes a e, on he con a y, incomes om ac i i ies non- ela ed o he mission o an NGO. In pa icula i is income om in es men ac i i y o yield o capi al (e.g. income om en ing i s asse s). Comme cial income also applies o es uc u ing o asse s and includes sale o asse s and he associa ed e ec s o inancing, such as he sale o buildings and eal es a e. O he comme cial income is a esidual ca ego y ha includes all he comme cial ac i i ies ca ied ou by NGOs ha a e no ela ed o hei mission and a he same ime canno be assigned o any o he o he comme cial income ca ego ies. The bo owed capi al can be di ided in o common bank loans and o he subsidized bo owed capi al, i.e. loans ha a e p o ided by go e nmen au ho i ies and designed speci ically o NGOs. Go e nmen suppo s NGOs and hus p o ides his capi al also by assump ion o gua an ees o emission o deb s and axes. The ollowing able ep esen s he main sou ces used in NGO unding, he ou come is om p ima y esea ch in he Slo ak Republic (182 esponden s) and in Aus ia (266 esponden s) and om p e- esea ch in he Czech epublic (67 esponden s). EM_02_14_zlom 4.6.2014 8:54 S ánka 122 Business Adminis a ion and Managemen 1232, XVII, 2014 Fig. 1: Quasi-equi y Sou ce: own p ocessing based on [9] Tab. 2: Sou ces o unding o NGOs in Slo akia and Aus ia Type o unding Sou ce o unding CZ SVK AT S a e, s a e subsidies, municipal budge s 67% 42% 91% S a e/public con ac s * 4% n/a Indi idual dono s/companies 66% 60% 56% G an s (p i a e ounda ions) 48% 45% 34% Assigna ions o 2% o ax income n/a 92% n/a Membe ships ees 24% 62% 51% Sale o own p oduc s and se ices 69% 58% 63% Sponso ship 1% n/a 53% Fo eign sou ces, including EU g an and subsidies 22% 13% 41% Quasi-equi y: Asse s en al 28% 15% 19% comme cial In es men app ecia ion 3% 8% 21% income Clea ing o ese es 0% 0% 22% Bo owed Bank loans * 0% 22% capi al P e- inancing ag eemen s 0% 0% 6% O he O he sou ces 1% 8% n/a Sou ce: SVK – own esea ch, 2012; CZ – own esea ch, 2013; AT – [9] * Due o he ac in CZ i was a p e- esea ch we do no ha e comple ed da a o Czech Republic. Quasi-equi y: non-p o i income EM_02_14_zlom 4.6.2014 8:54 S ánka 123 Ekonomika a managemen 124 2014, XVII, 2 In he Czech Republic public unding is widely-sp ead, closely ollowed by unding om indi idual dono s and companies. Howe e , o he highes signi icance is unding om he sale o hei own p oduc s and se ices. As o he sou ces, one esponden s a ed a collec ion ( und- aising campaign) which could be appoin ed o a special way o aising unds om indi iduals and companies o speci ic pu pose. In Slo akia o he sou ces o unding we e no u he speci ied, he e o e we canno assign his poin o non-p o i o comme cial income. The s uc u e o unding is domina ed by p i a e and indi idual sou ces; also o signi icance is sel - inancing and public unding. Fo eign sou ces a e ep esen ed by o eign ounda ions ha suppo Slo ak NGOs and as such hey can be assigned o non-p o i income. None o he esponden s s a ed bank loans o o eign capi al which suppo s he ac ha in Slo akia loans o NGOs ha e ye no been es ablished as a common sou ce. The unding sou ces in he Aus ian NGOs co espond o he p esumed model, i.e. public inance is clea ly he mos used sou ce. O he equen ly used sou ces a e ees o se ices and p oduc s, dona ions om indi iduals, sponso ship and membe ship ees. In all h ee coun ies non-p o i income as apa o quasi equi y p e ails. Fo he pu pose o achie ing he goal o he pape he quasi- equi y is essen ial o us. As he able shows, he non-p o i income can be gene a ed om sel - inancing ac i i ies ha a e no necessa ily o a comme cial cha ac e , e.g. sale o own p oduc s and se ices ha a e in compliance wi h co e wo k. We will y o poin ou he di e ences esul ing om he b eakdown o incomes o non-p o i and comme cial, especially in he con ex o main aining he non- dis ibu ion cons ain p inciple o NGOs in he implemen a ion o sel - inancing ac i i ies. 2.2 Sel -Financing o NGOs As al eady men ioned, sel - inancing o NGOs is no a clea ly de ined e m. In a b oade meaning i is de ined as any di e si ica ion o he unding sou ces o NGOs. F om he na owe poin o iew sel - inancing can be unde s ood as abusiness o any o he economic ac i i ies o he NGOs ha gene a e hei own income, i.e. sel - inancing as a me hod o ob aining in e nal sou ces [3]. Sel - inancing ac i i ies b ing inancial income and po en ial p o i bu he p inciple o non-dis ibu ion cons ain s ill applies and compa ed o any comme cial company i is gi en in ad ance how NGOs use his p o i . P o i able ac i i ies o NGOs (e.g. e enue om sale o en o asse s, e enue om ad e ising) a e subjec o income ax. When axing his ype o income i is necessa y o ake in o conside a ion se e al condi ions ha di e om coun y o coun y. Usually he main ac i i y, he so-called co e wo k o he NGO, is ei he no subjec o axa ion a all (SVK), o , up o a gi en amoun o p o i om he co e wo k i is exemp om ax and abo e his amoun he p o i is subjec o axa ion (CZ). In Aus ia he law is e en mo e complica ed and he condi ions o ax exemp ion a y om egion o egion. Gene ally we can say ha ax exemp ion is aso o compensa ion o non-dis ibu ion cons ain . Weisb od [17] poin ed ou ha when NGOs canno decide abou he use o hei p o i , hey ha e ax exemp ion ins ead. I he ac i i y is no a co e wo k ac i i y o i complies wi h he de ini ion o business as s a ed by EU egula ion, hen we a e alking abou ano he o m o sel - inancing called acomme cial ac i i y. To dis inc : he e m sel - inancing ac i i ies is conside ed o be hose ha a e associa ed wi h he en y o NGOs on he ma ke and ha equi e hinking o he business sec o , bu hese a e no business/economic ac i i ies in he ue sense o he wo d [12]. 2.3 Iden i ica ion o Bene i s and Risks o Sel -Financing o NGOs Based on Empi ical Findings I is s a egically ad an ageous o NGOs o ocus on sel - inancing ac i i ies in acco dance wi h he co e wo k o NGOs and hei missions. The e o e, we can say ha om he na owe poin o iew, sel - inancing is aising unds om sou ces which we de ined in he "quasi- equi y" as non-p o i income. The bene i s and isks o sel - inancing in his concep can be desc ibed as ollows (Table 3): EM_02_14_zlom 4.6.2014 8:54 S ánka 124 Business Adminis a ion and Managemen 1252, XVII, 2014 Tab. 3: Bene i s and isks o sel - inancing Bene i s Risks Inc ease o income (sel - inancing as a an addi ional Di e gence o o ganiza ional sou ces sou ce o unding) Inc ease in di e si ica ion o unding (inc ease o NGO’s Risk o ocusing on business and no on he mission sus ainabili y) o NGO Inc ease in lexibili y (income aised by sel - inancing Rein es men o p o i in o p o i able ac i i y, no in o co e is no limi ed by dono s’ condi ions) wo k Imp o emen o s a egic and long- e m planning Risk o loss o deb Imp o emen o inancial managemen and discipline Loss o damage o NGO’s epu a ion Posi i e imp ession on dono s (NGO is able o co- inance Changes in mo i a ions o employees and in demands on ap ojec wi h i s own unds) s a Empowe men o boa d o ad iso s by using hei business Compe i i e en i onmen o he comme cial sec o and manage ial skills o sel - inancing (wi h sel - inancing NGO en e s he comme cial ma ke ) B oadening a po olio o p oduc s and/o se ices and hus Dis ibu ion o p oduc s and se ices (SNO ha e limi ed b oadening he clien base capaci y o se icing he ma ke ) Inc ease o NGO’s sel -con idence in case o success ul P oblem wi h se icing la ge a ge g oup use o sel - inancing ac i i ies (in case o g ow h) Sou ce: own elabo a ion, 2013 The goal o he pape is o iden i y pa icula bene i s and isks o sel - inancing o NGOs based on ele an empi ical indings om he Czech Republic, Slo akia and Aus ia. The Table 3 ep esen s a heo e ical app oach o he opic wi hou a need o s a is ical e i ica ion. The s a is ical e i ica ions o p ima y da a a e included in he pa o he pape , which is de o ed o he empi ical app oach. We conclude ha despi e he compa able size o he coun ies, as well as hei sha ed pas in he Aus o-Hunga ian mona chy, he in luence o economic and non-economic ac o s leads o di e en de elopmen o NGOs and hei unding, including he sel - inancing. 2.3.1. The Case o he Czech Republic The da a mapping he sel - inancing ac i i ies in he condi ions o he Czech Republic we e ob ained in some p e- esea ch conduc ed du ing he sp ing o 2013. I gene ally shows ha sel - inancing is no only a end o ecen yea s. The mos esponden s (75–90% in he dependence o he age o he o ganiza ion) chose some o ms o sel - inancing in he ea ly yea s o hei exis ence. In gene al we can conclude ha 79% o NGOs ha ook pa in ou p e- esea ch aise unds h ough sel - inancing. We asked he esponden s o iden i y he p oblems ( isks) connec ed o he sel - inancing o NGOs. They named e.g. business isk; isk o con lic wi h he o ganiza ion's mission; he isk o o ganiza ional and p o essional unp epa edness o he NGO o sel - inancing and he isk o excessi e dependence on only one inancial sou ce. Fu he mo e, we we e in e es ed in he iews o esponden s on he issue o sel - inancing as a comme cial ac i i y. In gene al, mos o he NGOs (ca 75%) exp essed hei opinion in he sense ha i is no an ac i i y dis ac ing om he main mission – his con i ms ou assump ion exp essed in he pa de o ed o he de ini ion o “quasi-equi y” (i.e. non-p o i incomes s. comme cial incomes). To con i m he impo ance and bene i s o sel - inancing o NGOs we p o ed he endency o esponden s o use sel - inancing in he u u e (98% o esponden s answe ed in aposi i e way). The esul s o he p e- esea ch con i med ha e en i he o al olume o o he inancial sou ces is in he majo i y o NGOs g ea e – especially public and p i a e sou ces – he sel - inancing ac i i ies a e o he majo i y o NGOs an absolu ely essen ial pa o und aising. EM_02_14_zlom 4.6.2014 8:54 S ánka 125 Ekonomika a managemen 126 2014, XVII, 2 2.3.2. The Case o Slo akia The esul s we e ob ained in he esea ch abou he unding o NGOs in SVK [14]. The sel - inancing is used by 87.4% o NGOs in Slo akia. I we look a he dis ibu ion o sou ces wi hin one o ganiza ion hen he leas used sou ces a e s a e/public con ac s (only 2.20%). This sugges s ha in SVK sui able condi ions o p o ide public se ices by NGOs a e s ill missing. They ha e o sea ch o o he sou ces and he e o e p i a e unding ep esen ed by g an s is a a highe a e, as well as membe - ship ees. On he o he hand, sel - inancing wi hin one o ganiza ion is ep esen ed by 25.4% [14] which is highe han he es ima ion epo ed in "ideal" di e si ica ion o unding sou ces [16]. Al hough he le el o his ype o inancing is a qua e o he o al sou ces o an NGO, he alue o 25.4% is s ill lowe han he Eu opean a e age o 36.9% [5]. Fo he Slo ak case we b ing he e idence ha e en young NGOs use sel - inancing ( able 4): Tab. 4: Use o sel - inancing by he age o NGOs in Slo akia Leng h o exis ence up o 5–10 10–20 mo e han 5 yea s yea s yea s 20 yea s Leng h o use he sel - inancing we do no use sel - inancing 7 2 12 2 1 yea 13 2 1 1 2–5 yea s 32 11 9 1 mo e han 5 yea s - 26 37 26 Sou ce: own esea ch, 2012 As able 4 shows also o ganiza ions less han 5 yea s old use sel - inancing. Fo example, 13 o ganiza ions younge han 5 yea s use he sel - inancing o one yea and 32 such o ganiza ions apply sel - inancing ac i i ies o 2–5 yea s. We can he e o e conclude ha also young o ganiza ions ecognize he need o di e si y sou ces and hey y o apply sel - inancing in o de o gain inancial s abili y. Due o he e alua ion o he impac o sel - inancing on he non-dis ibu ion cons ain o NGOs we explo ed whe he esponden s consi- de ed sel - inancing ac i i ies o comme cial de lec a en ion om he mission and co e wo k o he o ganiza ion. 68% o NGOs epo ed no, sel - inancing is no such an ac i i y. Mo e han 21% o hem said no, bu had some objec ions o sel - inancing (e.g. NGOs should no de elop business ac i i ies) o he espon- den s we e no able o decide because hey said i depends on o he ac o s e.g. he legal o m o an NGO. Less han 11% o o ganiza- ions belie e ha sel - inancing is a comme cial ac i i y ha dis ac s om he mission and co e wo k o NGOs. We conclude ha NGOs mus be able o dis inguish be ween wha is acomme cial ac i i y and wha is an ac i i y ha equi es a business way o hinking and ocus on sel - inancing in compliance wi h he mission and co e wo k. 2.3.3. The Case o Aus ia Aus ian NGOs ha e e y s ong s a e suppo and he use o public unding is e y signi ican . The mos used sou ce o unding in Aus ian NGOs is public sou ces, used by 91% o esponden s pa icipa ing in he esea ch [9]. This in ol es long- e m con ac ual ela ion- ships which g ea ly in luence he acquisi ion o new sou ces o unding. The ques ion how much e o NGOs ha e o pu in o keep hese sou ces whils ob aining new inancial sou ces and ul illing hei missions comes o he o e. The need o ul il he mission and keep he non- dis ibu ion cons ain mus be a p io i y when doing any ac i i y b inging money in o unning NGOs. Apa ial aspec o his issue also includes a ixed pu pose o sou ces and he accoun abili y o he sou ce p o ide . Compa ed wi h o he sou ces o unding i can be s a ed ha he highes e o mus be made by NGOs when applying o EU unds, s a e unds and con ibu- ions and dona ions om companies and indi iduals. This explains he esea ch esul s which showed a clea desi e o NGOs o gain EM_02_14_zlom 4.6.2014 8:54 S ánka 126 Business Adminis a ion and Managemen 1272, XVII, 2014 ala ge pa o he unds h ough hei own ac i i ies [9]. I also con i ms he impo ance o sel - inancing as i can o e he highes le el o independence and eedom in he decision- making p ocess. We can suppo he impo ance and bene i s o sel - inancing wi h he indings o he pa o he Aus ian esea ch on unding o NGOs ha is ocused on he eedom o use o inancial sou ces. This shows ha he highes pu pose- ixed sou ces p o ide he lowes eedom o decide abou he use o hese sou ces in ul illing he mission [9]. The highes in luence o sou ce p o ide was obse ed in con ac ual suppo om he s a e and he EU ( he sou ce p o ide s ic ly con ols he use o p o ided money). The lowes in luence and con ol was in he case o income om inancial in es men s and en ing asse s which a e sel - inancing ac i i ies. We can conclude ha sel - inancing has a posi i e e ec on achie ing gene ally bene icial pu poses o which NGOs we e ounded and can be in compliance wi h non-dis ibu ion cons ain . 2.4 Discussion The expe ience o NGOs in all h ee coun ies clea ly indica es he need o use o ms o sel - inancing in he in e es o hei s abili y, al hough in no case his shall be he only way o sole sou ce o income. When aising unds by he shown o ms o sel - inancing, NGOs mus eckon wi h ce ain isks. These a e mo e nume ous, la ge and mo e challenging han hose o which p o i able companies a e exposed (see Table 3). Fo each o m o sel - inancing he e is a ule ha he mo e he o ganiza ion di e ges om i s mission, he g ea e isk i akes in he case o unsuccess ul ealiza ion o a business plan. The en y o NGOs on he s anda d ma ke (wi h p o i able businesses) b ings some p oblems ha a e shown oge he wi h he calcu- la ion o s a is ical a iables e lec ing hei impo - ance in Tab. 5 below (scalabili y assessmen : 1 = e y se ious p oblem, 2 = se ious p oblem, 3 = mino p oblem, 4 = sligh p oblem, 5 = I canno judge), and symbols a) o e) e e ing o p oblems. The desc ip ion o he p oblems is in he ex below he able: Tab. 5: P oblems connec ed wi h unding he NGOs by sel - inancing Indica o / P oblem a) b) c) d) e) Mean 1.81 2.11 2.34 2.44 0.21 Median 2.00 2.00 2.00 2.00 0.00 S anda d de ia ion 1.143 1.229 1.187 1.168 0.577 Minimum 0 0 0 0 0 Maximum 4 4 4 4 3 Sou ce: [16] a) " ulne abili y” o he NGOs, i he o ganiza ion elies on one-sided unding depending on he success o i s ma ke ac i i ies o o he o ms o sel - inancing (a e age impo ance 1.81 ±1.143), b) he po en ial isk ha he o ganiza ion " o ge s" i s mission and ha making a p o i becomes a p io i y (a e age impo ance 2.11 ±1.229), c) s ong compe i ion om he p i a e sec o (a e age impo ance 2.34 ±1.187), d) he o ganiza ion may o e es ima e hei abili y and capaci y o implemen and de elop sel - inancing ac i i ies (a e age impo ance 2.44 ±1.168), e) among o he issues he esponden s named limi ed legal op ions o sel - inancing; high isk o abusing he sel - inancing possibili ies; legisla i e ba ie s ha do no allow any (o e y ew) business ac i i ies o ce ain ypes o non-p o i o ganiza ions (e.g. ounda ions), unclea explana ion o he ules on he unding o NGOs, lack o capi al and knowledge, lack o "a cul u e o suppo o he hi d sec o " in he o m o pu chasing i s p oduc s and se ices." [16]. We es ed hese p oblems (especially he p oblem in poin b) dis ac ing om he mission), which occu ed in 2009 in he Slo ak EM_02_14_zlom 4.6.2014 8:54 S ánka 127 Ekonomika a managemen 128 2014, XVII, 2 NGOs, on he case o he Czech NGOs in 2013 and he Slo ak NGOs in 2012. Al hough we canno p o ide he same s a is ical calcula ion as in Tab. 5 due o a change in esponse scale (in 2009 a scale 1–5 was used, in la e su ey esponden s answe ed yes/no/o he op ion), we can conclude ha while he p oblem o he po en ial isk ha he o ganiza ion " o ge s" i s mission and ha making a p o i akes i s place was conside ed se ious (impo ance 2.11) in esea ch in 2009 i has now has los impo ance. The as majo i y o esponden s now hink ha sel - inancing does no dis ac om he co e wo k and mission ul illmen : in Slo akia i was 86% o esponden s ha hinks sel - inancing does no dis ac om he mission and co e wo k, only 11% o NGOs hinks i does, 3% o esponden s (4 NGOs) s a ed ha i depends on o he ac o s, e.g. alegal ype o a NGO using he sel - inancing. In he Czech Republic he p e- esea ch showed simila esul s. 81% o esponden s claimed ha sel - inancing does no dis ac om he mission and co e wo k; on he con a y, he mission and co e wo k o NPOs we e suppo ed by sel - inancing. Only 13% o NGOs hough ha sel - inancing was a pu e comme cial ac i i y and 6% o esponden s could no decide. These esul s we e gained in ap e- esea ch; hey will be p o ed in an upcoming p ima y esea ch ha will be conduc ed in 2014. Despi e he p oblems associa ed wi h sel - inancing, his me hod o unding is cu en ly iewed as one o he possible ways o he inancial s abili y and independence o NGOs. Conce ning independence, i is unde s ood no only om he poin o iew o i s inancial aspec s. I is also independence om he en i onmen whe e he NGO is and when he o ganiza ion needs o decide he di ec ion o i s ac i i ies. This independence is di ec ly connec ed wi h inancial independence [13]. Conclusion By explo ing he sel - inancing ac i i ies o NGOs in h ee di e en coun ies we ied o b ing some empi ical e idence showing ha he comme cial ac i i ies o non-p o i o ganiza ions mus be unde s ood in a b oade con ex han a"business" and ha he comme cializa ion o non-go e nmen o ganiza ions can be in compliance wi h he non-dis ibu ion cons ain . The e o e he goal o he pape was o iden i y pa icula bene i s and isks o sel - inancing o NGOs based on ele an empi ical indings om he Czech Republic, Slo akia and Aus ia. We ul illed his goal by p esen ing he pa ial esul s o p ima y esea ch and u he mo e we managed o con i m ha sel - inancing is asui able me hod used o aising unds and also one o he possible ways o gain inancial s abili y, independence and, in he end, also he long- e m sus ainabili y o NGOs. In he submi ed pape we ha e shown ha sel - inancing o NGOs can be connec ed o hei co e wo k and does no ha e o be in con lic wi h he non-dis ibu ion cons ain . The ul illmen o he mission o NGOs suppo ed by comme cial ac i i ies in acco dance wi h es ablished co e wo k can be conside ed as an app op ia e way which should be unde aken by NGOs in o de o achie e hei inancial independence and s abili y. We can conclude ha he bene i s o sel - inancing p e ail o e i s isks. The scope o ou su ey, which we in oduced in he p esen ed pape , could be asui able basis and a s a ing poin o u he scien i ic ac i i ies in he ield o he comme cializa ion o NGOs. The empi ical indings will be s eng hened by a heo e ical app oach o he explo ed issue in ou o hcoming esea ch. This wo k was suppo ed by he p ojec „Employmen o Newly G adua ed Doc o s o Science o Scien i ic Excellence“ (CZ.1.07/2.3.00/30.0009) co- inanced om Eu opean Social Fund and he s a e budge o he Czech Republic. Re e ences [1] BENâO, J., VACEKOVÁ, G. Theo e ical- me hodological p oblems o he scien i ic esea ch. Ac a Mo a ia. Scien i ic jou nal o economics, managemen and in o ma ics. 2012, Vol. 3, No. 5, pp. 31-40. ISSN 1803-7607. [2] HYÁNEK, V. Czech social economy and social en e p ises: Cu en de elopmen s and challenges. Ci il Szemle. 2012, Vol. 9, Iss. 4, pp. 5-23. ISSN 1786-3341. [3] KUVÍKOVÁ, H., SVIDRO≈OVÁ, M. K an i a í ny as a akcep ácia súk omn˘ch nezisko ˘ch o ganizácií Slo enskej epublike. In Bílá mís a eo ie a ãe né dí y e o em e efiejném EM_02_14_zlom 4.6.2014 8:54 S ánka 128