Creating an association is relatively simple; the biggest challenge is keeping it going and covering its expenses. Many nonprofit making associations try to operate using their own resources. Unfortunately, that's not always enough.
Very often, an association needs to draw on other sources of financing to ensure its sustainability. It's therefore worth being familiar with these sources and understanding them.
These sources can be split into three main categories:
- Financing from members and third parties;
- Financing from public subsidies;
- Financing from the activities of the associations themselves.
1. Financing from members and third parties
A contribution is financial input which an association may request from all or some of its members with the aim of covering the costs of running the association.
A donation may be defined as a benefit (financial, material, etc.) that the association receives without having done anything to obtain it. Nothing is given in return for a donation, but the donor may benefit from tax exemption, provided that at least €40 is donated in that calendar year and the association has been approved by the Service Public Fédéral des Finances (Federal Public Service for Finance).
Sponsorship is the granting of financial support to an organisation or event in return for special visibility for the sponsor's name or logo. The sponsor always intends to gain something, for example, an increase in awareness or a strengthening of its internal or external brand image. The general idea behind this approach is that the more the company is known and appreciated by the public, the more sympathy it will receive from potential customers...
Patronage is when an organisation or activity is supported without the name of the company or patron being visibly associated with it. In short, the patron receives no direct or measurable reward in terms of publicity or image. Patrons therefore have somewhat philanthropic intentions, arising from selfless, personal callings (idealism, support of a cause).
Crowdfunding is where individuals or ASBLs present their projects, most often online, and several people can invest an amount of their choice in the projects they consider useful. This can be done with or without something in return.
Calls for project bids from foundations
Calls for projects (for specific audiences, geographical areas or fields of action) offer real opportunities for associations. There are many foundations recognised as being of public utility, corporate foundations and endowment funds, which are involved in a number of causes. Some fund projects directly, others operate indirectly. Their fields of intervention vary according to their sensitivity or the orientations they adopt.
A public contract may concern works to be carried out, services to be rendered or supplies to be delivered on behalf of the federal State, the federated entities and all levels of power in the Kingdom, as well as parastatals. They are awarded following a call for tenders (or "public procurement procedure"). For Belgium, the e-Procurement portal contains announcements of public contracts.
These are certainly not avenues to be ignored, despite being more local. The members of service clubs pool their skills and commitment to help the community, and primarily those who need it the most, such as people living in poverty, disabled people, and people with illnesses. Cultural enrichment and the protection of young people are regularly part of their programmes.
2. Financing from public subsidies
Subsidies or grants
This is financial assistance granted by a public authority (an authority of the state, community, region, province or commune) to a legal entity, with the aim of promoting the public-interest activity to which this entity is dedicated.
Communes, the French Community Commission (COCOF), the Wallonia-Brussels Federation, the federal State, and the European Union may provide contributions to support associations.
3. Financing from the activities of the associations themselves
Since the entry into force of the new Code of Companies and Associations (CSA) on 1 May 2019, non-for-profit organisations may carry out commercial activities without restriction, whereas in the past this had to remain incidental. However, profits must be allocated to the association's social purpose and may not be redistributed to members, administrators or employees.
Any non-for profit organisation can organise support events such as shows or dinners. This type of event allows associations to raise funds but also to publicise their activities and attract new members.
As explained above, an association can also carry out purely profit-making activities on an unlimited basis, such as selling goods or services. The association can therefore generate a turnover and thus cover its costs, in whole or in part. It should be noted that if the association carries out profit-making activities, it will be subject to corporation tax.