Question

The main source of revenue for not for profit organisation is

• A. Sale of goods
• B. Sale of periodicals
• C. Subscription from members
• D. Sale of assets

Answer 1

The Correct Option is C

Revenue Sources for Not-for-Profit Organizations 

Not-for-profit organizations rely on various sources of revenue to fund their operations and activities. Understanding these revenue sources is crucial for assessing the financial sustainability of these organizations.

Primary Revenue Source

For many not-for-profit organizations, the primary source of revenue is typically subscriptions from members. This is particularly true for membership-based organizations that provide services or benefits to their members.

Other Revenue Sources

In addition to member subscriptions, not-for-profit organizations may also receive revenue from:

• Donations and grants
• Fundraising events
• Program fees
• Investment income

Why Member Subscriptions are Important

Member subscriptions provide a stable and predictable source of income, allowing the organization to plan its activities and budget effectively. They also demonstrate ongoing support from the organization's core constituents.

Conclusion

Therefore, for not for profit organizations, the primary source of revenue typically comes from subscription from members. Hence, the correct answer is Option 3.

Answer 2

Primary Revenue Source for Not-for-Profit Organizations 

The primary revenue source for many not-for-profit organizations, particularly membership-based organizations, is member subscriptions. These organizations rely on the financial support of their members to fund their operations and activities, rather than generating revenue through commercial sales or profits.

Explanation

Member subscriptions are recurring payments made by individuals or organizations to become members of the not-for-profit organization. These subscriptions provide a stable and predictable source of income, allowing the organization to plan its activities and budget effectively.

Other Potential Revenue Sources

While member subscriptions are often the primary source, not-for-profit organizations may also receive revenue from:

• Donations and Grants: Contributions from individuals, foundations, and government agencies.
• Fundraising Events: Activities organized to raise money, such as galas, auctions, and charity runs.
• Program Fees: Charges for specific services or programs offered by the organization.
• Investment Income: Earnings from investments made by the organization.
• Commercial Activities: Some not-for-profits may engage in limited commercial activities related to their mission (e.g., selling merchandise)

Emphasis on Member Support

Even when other revenue sources are available, member subscriptions are often critical because they demonstrate ongoing commitment and support from the organization's core constituents. They also provide a degree of financial stability that can be difficult to achieve through other funding mechanisms.