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Restructuring to Ensure Continued Growth of Self-financing Activities

By the Nonprofit Enterprise and Self-sustainability Team (NESsT). This publication is part of the NESsT Case Studies Series.

Bioterra, the Association of Organic Farmers of Romania, is a pioneering membership organization whose mission is to promote organic agricultural and livestock production among Romanian farmers and encourage consumers to choose organic products. The focus of Bioterra's programs is education: education of farmers in organic methods and education of consumers about the health and environmental benefits of eating organic foods. Since its founding in 1997, Bioterra has grown steadily and made significant progress toward its goals, including playing a major role in the establishment of organic standards and monitoring methods in Romania.

Self-financing activities have long been a part of Bioterra's funding mix. Early on, the leadership of the organization realized that dependence on mostly foreign foundations for support was insufficient, since this would not sustain its operational costs nor its program development goals, and it began to diversify its activities to include those that would generate income for the organization. The most significant of these activities is consulting to farmers who are using organic methods as well as those who would like to begin to farm organically. Consulting services are provided by Bioterra staff as well as outside consultants hired by the
organization and the income that is generated represents about 20% of the organizational budget. Another 8% of the overall budget comes from the sale of publications, including a magazine, books and brochures about organic farming and livestock-raising, as well as related legal issues. Finally, the organization also receives income in the form of membership dues, which represent about 5% of
overall income. Although Bioterra’s membership is growing somewhat slowly (about 20 new members are added each year), they represent a core group that is committed to Bioterra and has a stake in its future sustainability.

Bioterra is now at a turning point in its development. With a staff of just four employees, the organization has thus far been able to manage the growth of its programs, including self-financing activities. But if the organization is to capitalize on the potential to add new products and services in the online commerce and agritourism areas, it will need to form a separate, commercial entity managed by business professionals with sales, marketing, operations and financial management experience. Such a proposition brings with it multiple challenges for Bioterra, including the need to ensure that the for-profit entity and its managers maintain a strong commitment to the mission of the organization.

To read the full article please follow this link to the NESsT publication.