We continue our tour of international fundraising practices with a visit to Portugal. This article is written by Paula Oliveira, an insights, strategy and engagement professional, focused on system change initiatives. Paula works globally but has been living in Portugal for 5 years. There, she sits at the board of the Lisbon Project, a charity that protects the lives of migrants and refugees; and is also part of the supervisory board of the Circular Economy Portugal, a charity working towards a society without waste.
Portugal is usually known for its beautiful geography, delicious cuisine, attractive lifestyle, more affordable cost of living and holidays compared to its European counterparts, and a very welcoming place. However, Portugal faces several basic social challenges, such as in public health and education, rising property prices, poverty, ageing population, among others. Several local charities focus on addressing these national challenges, as well as global issues like climate change. Across all areas, they find the funding landscape limited, both in terms of opportunities and the amount of funding available. And despite raising awareness of environmental challenges, some charities in this sector face extra hurdles to fund their activities due to more immediate social pressures.
Types of funding
Public grants are the most common funding source in Portugal, estimated to make up 40% of the total. However, the application process can be technically difficult for many organisations, which seek support from grant writers – a process that can be expensive. Another challenge is that funds can be retrospective or delayed, requiring charities to have good cash flow upfront to cover expenses and to be clear on which expenses will be covered. It is advisable to be very clear on grant terms and evaluate if your charity has the means to handle the grant — not only financially, but also in terms of reporting requirements of how funds are being managed and updates on outcomes. One must also consider if being supported by public funds could compromise the independence of their work and advocacy activities.
Foundations are also important donors and, as in other countries, they have very specific focus areas. The largest foundations in Portugal include Fundação Calouste Gulbenkian, Aga Khan Foundation (Aga Khan Development Network – AKDN), Fundação EDP, Fundação Ageas, Fundação Champalimaud, and Santa Casa da Misericórdia, one of the oldest and largest charitable organisations in Portugal.
Corporate partnerships and donations are perceived as more limited compared to other European countries. Employee volunteering and in-kind donation tend to be the most common types of contributions, but pro-bono collaborations are on the rise. In any case, charities need to make a strong case to inspire a shift towards monetary or strategic partnership agreements.
Having the correct legal and fiscal status is fundamental to provide both corporate and individual donors with tax benefits that incentivise giving. Providing the option for donors to fund specific projects helps with fundraising efforts but can also be a challenge for charities as they require ‘non-restricted funding’ to support their general expenses. They also need funding for longer-term projects to have a more sustainable impact on the communities or causes they serve, a challenge in the Portuguese context given the limited number of foundations and corporate investments in charitable giving compared to the number of charities and their needs.
Individual giving is estimated to make up 30% of total giving, but it has been impacted in recent years due to declining disposable income derived from rising inflation and stagnant wages. According to the official European Union website, Portugal’s GDP per capita ranks below the European Union average (€27,900 vs. €35,500). It is common for local associations to charge a membership fee, but most generally the Portuguese prefer to donate items such as food, clothing, or electronics instead of providing regular financial contributions, or donate through their tax returns once a year. This reality is slowly changing, likely due to the rising number of foreigners and digital nomads who often earn their money elsewhere and want to ‘give back’ to their host country, and to the use of digital platforms and social media which are enabling charities to reach a wider audience.
Diversification with focus
For charities intending to raise money in Portugal, it is important to have a diversified fundraising strategy (including the provision of paid services if appropriate) and a good network—both locally and abroad—to avoid being solely dependent on local funding.
But the right diversification mix for each organisation must be defined through a strategic lens. Clarity and knowledge about funding programs and foundations’ focus areas are key to not waste time and invest in opportunities that align with the charity’s mission, intended outcomes, and capability to manage grant processes. This includes transparency and accountability in managing funds, which are key to build trust with all types of donors and encourage more consistent contributions. Finally, having dedicated personnel or partnerships to search and write proposals is advisable, but never forget the power of engaging the whole community invested in the cause to be part of the mobilisation efforts.
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